Intrinsic value of Patriot Transportation Holding - PATI

Previous Close

$19.90

  Intrinsic Value

$18.24

stock screener

  Rating & Target

hold

-8%

Previous close

$19.90

 
Intrinsic value

$18.24

 
Up/down potential

-8%

 
Rating

hold

We calculate the intrinsic value of PATI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.10
  2.39
  2.65
  2.89
  3.10
  3.29
  3.46
  3.61
  3.75
  3.88
  3.99
  4.09
  4.18
  4.26
  4.34
  4.40
  4.46
  4.52
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
Revenue, $m
  115
  117
  120
  124
  128
  132
  136
  141
  147
  152
  158
  165
  172
  179
  187
  195
  204
  213
  223
  233
  244
  255
  267
  280
  293
  307
  322
  338
  354
  371
Variable operating expenses, $m
  36
  37
  38
  39
  40
  41
  43
  44
  46
  48
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  75
  79
  83
  87
  91
  95
  100
  104
  109
  115
Fixed operating expenses, $m
  78
  79
  81
  83
  85
  87
  89
  90
  92
  94
  97
  99
  101
  103
  105
  108
  110
  112
  115
  117
  120
  123
  125
  128
  131
  134
  137
  140
  143
  146
Total operating expenses, $m
  114
  116
  119
  122
  125
  128
  132
  134
  138
  142
  146
  150
  154
  158
  163
  168
  173
  178
  184
  189
  195
  202
  208
  215
  222
  229
  237
  244
  252
  261
Operating income, $m
  1
  1
  2
  2
  3
  4
  5
  7
  8
  10
  13
  15
  18
  21
  24
  27
  31
  35
  39
  44
  48
  54
  59
  65
  72
  79
  86
  94
  102
  111
EBITDA, $m
  10
  11
  11
  12
  13
  15
  16
  18
  20
  23
  25
  28
  31
  35
  38
  42
  47
  51
  56
  62
  68
  74
  80
  87
  95
  103
  111
  120
  130
  140
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
Earnings before tax, $m
  1
  1
  2
  2
  3
  4
  5
  7
  8
  10
  13
  15
  17
  20
  23
  26
  30
  34
  38
  42
  47
  52
  58
  64
  70
  77
  84
  91
  100
  108
Tax expense, $m
  0
  0
  0
  1
  1
  1
  1
  2
  2
  3
  3
  4
  5
  5
  6
  7
  8
  9
  10
  11
  13
  14
  16
  17
  19
  21
  23
  25
  27
  29
Net income, $m
  1
  1
  1
  2
  2
  3
  4
  5
  6
  7
  9
  11
  13
  15
  17
  19
  22
  25
  28
  31
  34
  38
  42
  47
  51
  56
  61
  67
  73
  79

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  68
  70
  72
  74
  76
  79
  81
  84
  87
  91
  94
  98
  102
  107
  111
  116
  121
  127
  133
  139
  145
  152
  159
  167
  175
  183
  192
  201
  211
  221
Adjusted assets (=assets-cash), $m
  68
  70
  72
  74
  76
  79
  81
  84
  87
  91
  94
  98
  102
  107
  111
  116
  121
  127
  133
  139
  145
  152
  159
  167
  175
  183
  192
  201
  211
  221
Revenue / Adjusted assets
  1.691
  1.671
  1.667
  1.676
  1.684
  1.671
  1.679
  1.679
  1.690
  1.670
  1.681
  1.684
  1.686
  1.673
  1.685
  1.681
  1.686
  1.677
  1.677
  1.676
  1.683
  1.678
  1.679
  1.677
  1.674
  1.678
  1.677
  1.682
  1.678
  1.679
Average production assets, $m
  45
  46
  47
  49
  50
  52
  53
  55
  57
  60
  62
  65
  67
  70
  73
  76
  80
  84
  87
  91
  96
  100
  105
  110
  115
  121
  126
  132
  139
  146
Working capital, $m
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
Total debt, $m
  0
  1
  2
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  13
  14
  16
  17
  19
  21
  23
  25
  27
  30
  32
  35
  37
  40
  43
  46
  49
Total liabilities, $m
  22
  22
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  42
  44
  46
  49
  51
  53
  56
  59
  61
  64
  67
  71
Total equity, $m
  46
  47
  49
  50
  52
  53
  55
  57
  59
  62
  64
  67
  70
  73
  76
  79
  83
  86
  90
  94
  99
  103
  108
  113
  119
  124
  130
  137
  143
  150
Total liabilities and equity, $m
  68
  69
  72
  74
  76
  78
  81
  84
  87
  91
  94
  98
  103
  107
  112
  116
  122
  127
  132
  138
  145
  152
  159
  166
  175
  183
  191
  201
  210
  221
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.040
  0.060
  0.070
  0.080
  0.100
  0.110
  0.120
  0.140
  0.150
  0.160
  0.180
  0.190
  0.200
  0.210
  0.220
  0.230
  0.240
  0.250
  0.260
  0.270
  0.280
  0.290
  0.300
  0.310
  0.310
  0.320
  0.330
Adjusted equity ratio
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680
  0.680

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  1
  1
  2
  2
  3
  4
  5
  6
  7
  9
  11
  13
  15
  17
  19
  22
  25
  28
  31
  34
  38
  42
  47
  51
  56
  61
  67
  73
  79
Depreciation, amort., depletion, $m
  9
  10
  10
  10
  10
  11
  11
  12
  12
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
Funds from operations, $m
  10
  10
  11
  12
  13
  14
  15
  16
  18
  20
  22
  24
  26
  29
  32
  35
  38
  41
  45
  49
  54
  58
  63
  68
  74
  80
  86
  93
  100
  108
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  10
  10
  11
  12
  13
  14
  15
  16
  18
  20
  21
  24
  26
  29
  31
  34
  38
  41
  45
  49
  53
  58
  63
  68
  74
  80
  86
  93
  100
  108
Maintenance CAPEX, $m
  -9
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
Cash from investing activities, $m
  -10
  -10
  -10
  -10
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -20
  -21
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -35
Free cash flow, $m
  0
  0
  1
  1
  1
  2
  3
  4
  5
  6
  7
  9
  10
  12
  14
  17
  19
  22
  24
  28
  31
  34
  38
  42
  47
  51
  56
  62
  67
  73
Issuance/(repayment) of debt, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Total cash flow (excl. dividends), $m
  1
  1
  1
  1
  2
  3
  4
  5
  6
  7
  8
  10
  12
  14
  16
  18
  21
  23
  26
  29
  33
  37
  41
  45
  49
  54
  59
  65
  70
  76
Retained Cash Flow (-), $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
Prev. year cash balance distribution, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1
  0
  0
  0
  0
  1
  2
  3
  3
  5
  6
  7
  9
  11
  13
  15
  17
  20
  22
  25
  29
  32
  36
  40
  44
  48
  53
  58
  64
  69
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1
  0
  0
  0
  0
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  4
  4
  4
  3
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  1
Current shareholders' claim on cash, %
  99.5
  99.1
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9

Patriot Transportation Holding, Inc. operates as a regional tank truck. The Company conducts its business through its subsidiary, Florida Rock & Tank Lines, Inc. Its business consists of hauling petroleum related products, and dry bulk commodities and liquid chemicals. The Company operates terminals in Florida, Georgia, Alabama, South Carolina, North Carolina and Tennessee. As of September 30, 2016, the Company operated a fleet of 468 tractors and 561 tank trailers from its 21 terminals and nine satellite locations. The Company offers hauling liquid petroleum products, such as gas and diesel fuel, from large scale fuel storage facilities to its customers' retail outlets, such as convenience stores, truck stops and fuel depots. Its dry bulk commodities include cement, lime and various industrial powder products. It also provides delivery service in the liquid chemical and dry bulk business primarily from distribution facilities or manufacturing facilities to the end user.

FINANCIAL RATIOS  of  Patriot Transportation Holding (PATI)

Valuation Ratios
P/E Ratio 32.8
Price to Sales 0.6
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 6
Price to Free Cash Flow 13.1
Growth Rates
Sales Growth Rate -6.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -9.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 3%
Ret/ On Assets - 3 Yr. Avg. 5.8%
Return On Total Capital 4.4%
Ret/ On T. Cap. - 3 Yr. Avg. 8.9%
Return On Equity 4.4%
Return On Equity - 3 Yr. Avg. 9.3%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 86.6%
Gross Margin - 3 Yr. Avg. 85.9%
EBITDA Margin 10.7%
EBITDA Margin - 3 Yr. Avg. 12.6%
Operating Margin 1.8%
Oper. Margin - 3 Yr. Avg. 4.7%
Pre-Tax Margin 1.8%
Pre-Tax Margin - 3 Yr. Avg. 4.5%
Net Profit Margin 1.8%
Net Profit Margin - 3 Yr. Avg. 3.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 24.4%
Payout Ratio 0%

PATI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PATI stock intrinsic value calculation we used $112.165 million for the last fiscal year's total revenue generated by Patriot Transportation Holding. The default revenue input number comes from 0001 income statement of Patriot Transportation Holding. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PATI stock valuation model: a) initial revenue growth rate of 2.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PATI is calculated based on our internal credit rating of Patriot Transportation Holding, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Patriot Transportation Holding.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PATI stock the variable cost ratio is equal to 31.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $76 million in the base year in the intrinsic value calculation for PATI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Patriot Transportation Holding.

Corporate tax rate of 27% is the nominal tax rate for Patriot Transportation Holding. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PATI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PATI are equal to 39.2%.

Life of production assets of 4.5 years is the average useful life of capital assets used in Patriot Transportation Holding operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PATI is equal to 2.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $46.583 million for Patriot Transportation Holding - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 3.328 million for Patriot Transportation Holding is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Patriot Transportation Holding at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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USAK USA Truck 22.09 206.59  str.buy
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COMPANY NEWS

▶ Patriot Transportation: Fiscal 3Q Earnings Snapshot   [Jul-26-18 02:07PM  Associated Press]
▶ Patriot Transportation: Fiscal 2Q Earnings Snapshot   [Apr-25-18 02:37PM  Associated Press]
▶ Patriot Transportation posts 1Q profit   [Jan-31-18 01:19PM  Associated Press]
▶ Patriot Transportation posts 4Q profit   [Nov-29-17 01:47PM  Associated Press]
▶ Patriot Transportation posts 3Q profit   [Jul-26-17 11:52PM  Associated Press]
▶ Patriot Transportation Is a Forgotten Spinoff   [Jul-18-17 02:00PM  GuruFocus.com]
▶ Patriot Transportation posts 2Q profit   [Apr-27-17 05:01AM  Associated Press]
▶ Patriot Transportation posts 1Q profit   [Jan-25-17 01:57PM  Associated Press]
▶ First quarter revenue plummets for Patriot Transportation   [Jan-27-16 02:45PM  at bizjournals.com]

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