Intrinsic value of Stanley Black&Decker - SWK

Previous Close

$139.65

  Intrinsic Value

$302.99

stock screener

  Rating & Target

str. buy

+117%

Previous close

$139.65

 
Intrinsic value

$302.99

 
Up/down potential

+117%

 
Rating

str. buy

We calculate the intrinsic value of SWK 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 2017), $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 21.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
  5.36
  5.32
Revenue, $m
  14,251
  15,836
  17,500
  19,242
  21,063
  22,962
  24,940
  26,998
  29,138
  31,363
  33,674
  36,077
  38,573
  41,169
  43,868
  46,675
  49,597
  52,639
  55,809
  59,112
  62,556
  66,149
  69,900
  73,816
  77,907
  82,183
  86,653
  91,328
  96,220
  101,339
Variable operating expenses, $m
  9,817
  10,772
  11,774
  12,824
  13,922
  15,066
  16,258
  17,498
  18,788
  20,129
  20,293
  21,741
  23,246
  24,810
  26,436
  28,128
  29,889
  31,722
  33,632
  35,623
  37,698
  39,864
  42,124
  44,484
  46,949
  49,526
  52,220
  55,037
  57,985
  61,070
Fixed operating expenses, $m
  1,926
  1,969
  2,012
  2,056
  2,102
  2,148
  2,195
  2,243
  2,293
  2,343
  2,395
  2,447
  2,501
  2,556
  2,613
  2,670
  2,729
  2,789
  2,850
  2,913
  2,977
  3,043
  3,109
  3,178
  3,248
  3,319
  3,392
  3,467
  3,543
  3,621
Total operating expenses, $m
  11,743
  12,741
  13,786
  14,880
  16,024
  17,214
  18,453
  19,741
  21,081
  22,472
  22,688
  24,188
  25,747
  27,366
  29,049
  30,798
  32,618
  34,511
  36,482
  38,536
  40,675
  42,907
  45,233
  47,662
  50,197
  52,845
  55,612
  58,504
  61,528
  64,691
Operating income, $m
  2,508
  3,095
  3,713
  4,361
  5,040
  5,748
  6,487
  7,256
  8,057
  8,891
  10,986
  11,888
  12,826
  13,803
  14,819
  15,877
  16,979
  18,128
  19,326
  20,576
  21,881
  23,243
  24,666
  26,154
  27,710
  29,338
  31,041
  32,824
  34,692
  36,648
EBITDA, $m
  5,105
  5,844
  6,622
  7,437
  8,290
  9,181
  10,109
  11,076
  12,083
  13,130
  14,219
  15,352
  16,530
  17,755
  19,030
  20,358
  21,741
  23,182
  24,684
  26,251
  27,886
  29,593
  31,377
  33,241
  35,189
  37,227
  39,360
  41,592
  43,929
  46,376
Interest expense (income), $m
  177
  222
  296
  374
  455
  541
  630
  723
  820
  921
  1,026
  1,135
  1,249
  1,367
  1,489
  1,616
  1,749
  1,887
  2,030
  2,179
  2,335
  2,497
  2,666
  2,842
  3,026
  3,218
  3,419
  3,628
  3,848
  4,077
  4,317
Earnings before tax, $m
  2,286
  2,799
  3,340
  3,906
  4,499
  5,118
  5,763
  6,436
  7,136
  7,865
  9,851
  10,639
  11,460
  12,314
  13,203
  14,128
  15,093
  16,098
  17,147
  18,242
  19,384
  20,577
  21,825
  23,128
  24,492
  25,919
  27,412
  28,976
  30,614
  32,331
Tax expense, $m
  617
  756
  902
  1,055
  1,215
  1,382
  1,556
  1,738
  1,927
  2,123
  2,660
  2,873
  3,094
  3,325
  3,565
  3,815
  4,075
  4,347
  4,630
  4,925
  5,234
  5,556
  5,893
  6,245
  6,613
  6,998
  7,401
  7,824
  8,266
  8,729
Net income, $m
  1,669
  2,044
  2,438
  2,851
  3,284
  3,736
  4,207
  4,698
  5,209
  5,741
  7,191
  7,767
  8,366
  8,989
  9,638
  10,314
  11,018
  11,752
  12,517
  13,316
  14,150
  15,022
  15,932
  16,884
  17,879
  18,921
  20,011
  21,153
  22,349
  23,601

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
  21,334
  23,706
  26,197
  28,806
  31,531
  34,374
  37,335
  40,416
  43,620
  46,950
  50,411
  54,007
  57,745
  61,630
  65,670
  69,873
  74,247
  78,802
  83,546
  88,491
  93,647
  99,026
  104,640
  110,503
  116,628
  123,028
  129,720
  136,719
  144,042
  151,705
Adjusted assets (=assets-cash), $m
  21,334
  23,706
  26,197
  28,806
  31,531
  34,374
  37,335
  40,416
  43,620
  46,950
  50,411
  54,007
  57,745
  61,630
  65,670
  69,873
  74,247
  78,802
  83,546
  88,491
  93,647
  99,026
  104,640
  110,503
  116,628
  123,028
  129,720
  136,719
  144,042
  151,705
Revenue / Adjusted assets
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
Average production assets, $m
  13,681
  15,202
  16,800
  18,473
  20,221
  22,043
  23,942
  25,918
  27,973
  30,108
  32,327
  34,634
  37,030
  39,522
  42,113
  44,808
  47,613
  50,534
  53,576
  56,747
  60,054
  63,503
  67,104
  70,863
  74,791
  78,896
  83,187
  87,675
  92,371
  97,285
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
Total debt, $m
  5,103
  6,443
  7,850
  9,324
  10,864
  12,470
  14,143
  15,884
  17,694
  19,576
  21,531
  23,563
  25,675
  27,870
  30,152
  32,527
  34,998
  37,572
  40,252
  43,046
  45,959
  48,998
  52,171
  55,483
  58,943
  62,560
  66,341
  70,295
  74,432
  78,762
Total liabilities, $m
  12,054
  13,394
  14,802
  16,275
  17,815
  19,421
  21,094
  22,835
  24,645
  26,527
  28,482
  30,514
  32,626
  34,821
  37,104
  39,478
  41,950
  44,523
  47,203
  49,997
  52,910
  55,950
  59,122
  62,434
  65,895
  69,511
  73,292
  77,246
  81,384
  85,713
Total equity, $m
  9,280
  10,312
  11,396
  12,531
  13,716
  14,953
  16,241
  17,581
  18,975
  20,423
  21,929
  23,493
  25,119
  26,809
  28,567
  30,395
  32,298
  34,279
  36,342
  38,493
  40,736
  43,076
  45,519
  48,069
  50,733
  53,517
  56,428
  59,473
  62,658
  65,992
Total liabilities and equity, $m
  21,334
  23,706
  26,198
  28,806
  31,531
  34,374
  37,335
  40,416
  43,620
  46,950
  50,411
  54,007
  57,745
  61,630
  65,671
  69,873
  74,248
  78,802
  83,545
  88,490
  93,646
  99,026
  104,641
  110,503
  116,628
  123,028
  129,720
  136,719
  144,042
  151,705
Debt-to-equity ratio
  0.550
  0.620
  0.690
  0.740
  0.790
  0.830
  0.870
  0.900
  0.930
  0.960
  0.980
  1.000
  1.020
  1.040
  1.060
  1.070
  1.080
  1.100
  1.110
  1.120
  1.130
  1.140
  1.150
  1.150
  1.160
  1.170
  1.180
  1.180
  1.190
  1.190
Adjusted equity ratio
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,669
  2,044
  2,438
  2,851
  3,284
  3,736
  4,207
  4,698
  5,209
  5,741
  7,191
  7,767
  8,366
  8,989
  9,638
  10,314
  11,018
  11,752
  12,517
  13,316
  14,150
  15,022
  15,932
  16,884
  17,879
  18,921
  20,011
  21,153
  22,349
  23,601
Depreciation, amort., depletion, $m
  2,597
  2,749
  2,908
  3,076
  3,250
  3,433
  3,623
  3,820
  4,026
  4,239
  3,233
  3,463
  3,703
  3,952
  4,211
  4,481
  4,761
  5,053
  5,358
  5,675
  6,005
  6,350
  6,710
  7,086
  7,479
  7,890
  8,319
  8,768
  9,237
  9,729
Funds from operations, $m
  4,265
  4,792
  5,346
  5,927
  6,535
  7,169
  7,830
  8,518
  9,235
  9,980
  10,424
  11,230
  12,069
  12,941
  13,849
  14,794
  15,779
  16,805
  17,875
  18,991
  20,156
  21,372
  22,642
  23,970
  25,358
  26,810
  28,330
  29,920
  31,586
  33,330
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
  4,265
  4,792
  5,346
  5,927
  6,535
  7,169
  7,830
  8,518
  9,235
  9,980
  10,424
  11,230
  12,069
  12,941
  13,849
  14,794
  15,779
  16,805
  17,875
  18,991
  20,156
  21,372
  22,642
  23,970
  25,358
  26,810
  28,330
  29,920
  31,586
  33,330
Maintenance CAPEX, $m
  -1,224
  -1,368
  -1,520
  -1,680
  -1,847
  -2,022
  -2,204
  -2,394
  -2,592
  -2,797
  -3,011
  -3,233
  -3,463
  -3,703
  -3,952
  -4,211
  -4,481
  -4,761
  -5,053
  -5,358
  -5,675
  -6,005
  -6,350
  -6,710
  -7,086
  -7,479
  -7,890
  -8,319
  -8,768
  -9,237
New CAPEX, $m
  -1,446
  -1,521
  -1,597
  -1,673
  -1,748
  -1,823
  -1,899
  -1,976
  -2,055
  -2,136
  -2,219
  -2,306
  -2,397
  -2,492
  -2,591
  -2,695
  -2,805
  -2,921
  -3,042
  -3,171
  -3,307
  -3,450
  -3,600
  -3,760
  -3,928
  -4,105
  -4,291
  -4,488
  -4,696
  -4,914
Cash from investing activities, $m
  -2,670
  -2,889
  -3,117
  -3,353
  -3,595
  -3,845
  -4,103
  -4,370
  -4,647
  -4,933
  -5,230
  -5,539
  -5,860
  -6,195
  -6,543
  -6,906
  -7,286
  -7,682
  -8,095
  -8,529
  -8,982
  -9,455
  -9,950
  -10,470
  -11,014
  -11,584
  -12,181
  -12,807
  -13,464
  -14,151
Free cash flow, $m
  1,596
  1,903
  2,229
  2,574
  2,940
  3,324
  3,727
  4,148
  4,589
  5,048
  5,194
  5,691
  6,209
  6,747
  7,306
  7,888
  8,493
  9,123
  9,779
  10,462
  11,175
  11,917
  12,692
  13,500
  14,344
  15,227
  16,149
  17,113
  18,122
  19,178
Issuance/(repayment) of debt, $m
  1,271
  1,340
  1,407
  1,474
  1,540
  1,606
  1,673
  1,741
  1,810
  1,882
  1,955
  2,032
  2,112
  2,195
  2,283
  2,375
  2,471
  2,573
  2,681
  2,794
  2,913
  3,039
  3,172
  3,312
  3,460
  3,616
  3,781
  3,954
  4,137
  4,330
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  
  1,271
  1,340
  1,407
  1,474
  1,540
  1,606
  1,673
  1,741
  1,810
  1,882
  1,955
  2,032
  2,112
  2,195
  2,283
  2,375
  2,471
  2,573
  2,681
  2,794
  2,913
  3,039
  3,172
  3,312
  3,460
  3,616
  3,781
  3,954
  4,137
  4,330
Total cash flow (excl. dividends), $m
  2,867
  3,243
  3,636
  4,048
  4,479
  4,930
  5,400
  5,889
  6,399
  6,929
  7,149
  7,723
  8,320
  8,942
  9,589
  10,263
  10,965
  11,697
  12,460
  13,256
  14,088
  14,956
  15,864
  16,812
  17,805
  18,843
  19,930
  21,068
  22,260
  23,508
Retained Cash Flow (-), $m
  -983
  -1,032
  -1,084
  -1,135
  -1,186
  -1,237
  -1,288
  -1,340
  -1,394
  -1,449
  -1,505
  -1,564
  -1,626
  -1,690
  -1,757
  -1,828
  -1,903
  -1,981
  -2,064
  -2,151
  -2,243
  -2,340
  -2,442
  -2,550
  -2,664
  -2,784
  -2,911
  -3,045
  -3,185
  -3,334
Prev. year cash balance distribution, $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 flow adjustment, $m
  76
  86
  95
  105
  115
  126
  138
  150
  162
  175
  188
  202
  216
  231
  247
  263
  280
  298
  316
  335
  355
  375
  397
  419
  443
  467
  493
  520
  548
  577
Cash available for distribution, $m
  1,883
  2,211
  2,552
  2,913
  3,294
  3,693
  4,112
  4,549
  5,005
  5,480
  5,644
  6,159
  6,694
  7,252
  7,831
  8,434
  9,062
  9,715
  10,396
  11,105
  11,845
  12,616
  13,421
  14,262
  15,141
  16,059
  17,019
  18,023
  19,074
  20,175
Discount rate, %
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
  1,795
  2,000
  2,180
  2,337
  2,467
  2,567
  2,634
  2,668
  2,668
  2,634
  2,425
  2,345
  2,236
  2,104
  1,953
  1,786
  1,611
  1,430
  1,250
  1,075
  909
  756
  616
  493
  386
  297
  223
  163
  117
  81
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Stanley Black & Decker, Inc. is a global provider of hand tools, power tools and related accessories, mechanical access solutions, such as automatic doors and commercial locking systems, electronic security and monitoring systems, healthcare solutions, engineered fastening systems, and products and services for various industrial applications. The Company's segments include Tools & Storage, Security and Industrial. Its Tools & Storage segment consists of the Power Tools and Hand Tools, Accessories and Storage businesses. Its Security segment consists of the Convergent Security Solutions and Mechanical Access Solutions businesses. Its Industrial segment consists of the Engineered Fastening and Infrastructure businesses. It offers brands, such as SIDCHROME, AeroScout, DEWALT, Newell Tools and Craftsman, Irwin, Lenox, Craftsman, BLACK+DECKER, SONITROL, Warren, GRIPCO, Porter-Cable, BOSTITCH and WanderGuard.

FINANCIAL RATIOS  of  Stanley Black&Decker (SWK)

Valuation Ratios
P/E Ratio 22.1
Price to Sales 1.9
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 14.3
Price to Free Cash Flow 18.7
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11.6%
Cap. Spend. - 3 Yr. Gr. Rate 0.4%
Financial Strength
Quick Ratio 94
Current Ratio 0.2
LT Debt to Equity 59.9%
Total Debt to Equity 60.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 7.2%
Ret/ On Assets - 3 Yr. Avg. 6.5%
Return On Total Capital 9.7%
Ret/ On T. Cap. - 3 Yr. Avg. 8.6%
Return On Equity 15.8%
Return On Equity - 3 Yr. Avg. 13.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 37.4%
Gross Margin - 3 Yr. Avg. 36.7%
EBITDA Margin 15.9%
EBITDA Margin - 3 Yr. Avg. 15.5%
Operating Margin 12.2%
Oper. Margin - 3 Yr. Avg. 11.7%
Pre-Tax Margin 10.7%
Pre-Tax Margin - 3 Yr. Avg. 10.2%
Net Profit Margin 8.5%
Net Profit Margin - 3 Yr. Avg. 7.7%
Effective Tax Rate 21.3%
Eff/ Tax Rate - 3 Yr. Avg. 21.3%
Payout Ratio 34.3%

SWK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SWK stock intrinsic value calculation we used $12747 million for the last fiscal year's total revenue generated by Stanley Black&Decker. The default revenue input number comes from 2017 income statement of Stanley Black&Decker. 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 SWK stock valuation model: a) initial revenue growth rate of 11.8% 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 4.9%, whose default value for SWK is calculated based on our internal credit rating of Stanley Black&Decker, 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 Stanley Black&Decker.
    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 SWK stock the variable cost ratio is equal to 69.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1885 million in the base year in the intrinsic value calculation for SWK 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 5.8% for Stanley Black&Decker.

Corporate tax rate of 27% is the nominal tax rate for Stanley Black&Decker. 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 SWK stock is equal to 0.6%.

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 SWK are equal to 96%.

Life of production assets of 10 years is the average useful life of capital assets used in Stanley Black&Decker 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 SWK is equal to 0%. 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 - $8297 million for Stanley Black&Decker - 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 153 million for Stanley Black&Decker 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 Stanley Black&Decker at the current share price and the inputted number of shares is $21.4 billion.

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COMPANY NEWS

▶ Stanley Black & Decker: 2Q Earnings Snapshot   [06:09AM  Associated Press]
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▶ 3 Top Stocks Wall Street Is Overlooking   [Jun-01-18 10:15AM  Motley Fool]
▶ Craftsman Tools at Lowe's: Bad News for Sears Holdings   [May-20-18 10:18AM  Motley Fool]
▶ 3 Baby Bonds Paying Over 5.5%   [May-14-18 03:05PM  InvestorPlace]
▶ Craftsman tools now stocked in Lowe's stores   [08:14AM  American City Business Journals]
▶ The End Game for Sears Holding Corp Has Begun   [May-03-18 08:33PM  InvestorPlace]
▶ Stanley Black & Decker: 1Q Earnings Snapshot   [06:55AM  Associated Press]
▶ Edited Transcript of SWK presentation 6-Mar-17 2:15pm GMT   [Apr-10-18 03:04PM  Thomson Reuters StreetEvents]
▶ 3 Great Stocks for Low-Risk Investors   [Mar-01-18 06:30AM  Motley Fool]
▶ Stanley Black & Decker Announces 1st Quarter Dividend   [Feb-27-18 03:29PM  PR Newswire]
▶ 3 Top Industrial Machinery Stocks to Buy   [Feb-06-18 08:15AM  Motley Fool]
▶ Is There Any Value Left in Sears Holdings' Assets?   [Jan-31-18 07:35AM  Motley Fool]
▶ The 5 Best Dividend Aristocrats For 2018   [Jan-28-18 07:01AM  TheStreet.com]
▶ FLT's net property income jumped 8.9% to $35.15m in Q1   [Jan-25-18 11:54PM  Singapore Business Review]
▶ Stanley Black & Decker tops Street 4Q forecasts   [06:25AM  Associated Press]
▶ UBS: here are the industrial names investors should buy   [Jan-23-18 01:24PM  CNBC Videos]
▶ (ADT) Who Are ADT Corporation's Main Competitors?   [Jan-19-18 11:11AM  Investopedia]
▶ A Shopping List for 2018: Consumer & Retail Favorites   [Jan-10-18 08:35AM  Investopedia]
▶ [$$] Hackers and a Shrinking Talent Pool Top CEO Concerns for 2018   [Jan-04-18 12:40AM  The Wall Street Journal]
▶ How Safe Is Stanley Black & Decker Inc. (SWK) Dividend?   [Dec-18-17 07:10AM  Motley Fool]
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