Intrinsic value of TriMas Corporation - TRS

Previous Close

$31.72

  Intrinsic Value

$72.22

stock screener

  Rating & Target

str. buy

+128%

Previous close

$31.72

 
Intrinsic value

$72.22

 
Up/down potential

+128%

 
Rating

str. buy

We calculate the intrinsic value of TRS 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 1.4

 

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, %
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
Revenue, $m
  950
  1,025
  1,104
  1,186
  1,271
  1,359
  1,451
  1,546
  1,646
  1,749
  1,857
  1,969
  2,086
  2,207
  2,334
  2,467
  2,605
  2,750
  2,901
  3,059
  3,224
  3,397
  3,578
  3,767
  3,966
  4,173
  4,391
  4,619
  4,858
  5,108
Variable operating expenses, $m
  420
  450
  481
  513
  546
  581
  616
  654
  693
  733
  726
  770
  815
  863
  913
  965
  1,019
  1,075
  1,134
  1,196
  1,261
  1,328
  1,399
  1,473
  1,551
  1,632
  1,717
  1,806
  1,899
  1,997
Fixed operating expenses, $m
  379
  388
  396
  405
  414
  423
  432
  442
  451
  461
  471
  482
  492
  503
  514
  526
  537
  549
  561
  573
  586
  599
  612
  625
  639
  653
  668
  682
  697
  713
Total operating expenses, $m
  799
  838
  877
  918
  960
  1,004
  1,048
  1,096
  1,144
  1,194
  1,197
  1,252
  1,307
  1,366
  1,427
  1,491
  1,556
  1,624
  1,695
  1,769
  1,847
  1,927
  2,011
  2,098
  2,190
  2,285
  2,385
  2,488
  2,596
  2,710
Operating income, $m
  150
  188
  227
  268
  311
  356
  403
  451
  502
  555
  659
  717
  778
  841
  907
  977
  1,050
  1,126
  1,206
  1,290
  1,378
  1,470
  1,567
  1,669
  1,776
  1,888
  2,006
  2,131
  2,261
  2,398
EBITDA, $m
  230
  270
  312
  355
  401
  448
  498
  550
  604
  660
  719
  780
  844
  912
  982
  1,056
  1,133
  1,214
  1,299
  1,387
  1,481
  1,579
  1,681
  1,789
  1,903
  2,022
  2,147
  2,278
  2,416
  2,562
Interest expense (income), $m
  12
  16
  18
  20
  23
  25
  27
  30
  33
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  76
  80
  85
  90
  96
  101
  107
  113
  120
  126
  133
Earnings before tax, $m
  134
  170
  207
  246
  286
  328
  372
  418
  466
  516
  618
  672
  730
  790
  852
  918
  987
  1,059
  1,135
  1,214
  1,297
  1,385
  1,477
  1,573
  1,675
  1,781
  1,893
  2,011
  2,135
  2,265
Tax expense, $m
  36
  46
  56
  66
  77
  89
  101
  113
  126
  139
  167
  182
  197
  213
  230
  248
  266
  286
  306
  328
  350
  374
  399
  425
  452
  481
  511
  543
  576
  611
Net income, $m
  98
  124
  151
  179
  209
  240
  272
  305
  340
  377
  451
  491
  533
  576
  622
  670
  720
  773
  828
  886
  947
  1,011
  1,078
  1,148
  1,222
  1,300
  1,382
  1,468
  1,558
  1,653

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
  1,192
  1,287
  1,385
  1,488
  1,595
  1,705
  1,821
  1,940
  2,065
  2,195
  2,330
  2,470
  2,617
  2,770
  2,929
  3,095
  3,269
  3,450
  3,640
  3,838
  4,046
  4,262
  4,489
  4,727
  4,976
  5,236
  5,509
  5,795
  6,095
  6,409
Adjusted assets (=assets-cash), $m
  1,192
  1,287
  1,385
  1,488
  1,595
  1,705
  1,821
  1,940
  2,065
  2,195
  2,330
  2,470
  2,617
  2,770
  2,929
  3,095
  3,269
  3,450
  3,640
  3,838
  4,046
  4,262
  4,489
  4,727
  4,976
  5,236
  5,509
  5,795
  6,095
  6,409
Revenue / Adjusted assets
  0.797
  0.796
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
Average production assets, $m
  477
  515
  554
  595
  638
  682
  728
  776
  826
  878
  932
  988
  1,047
  1,108
  1,172
  1,238
  1,308
  1,380
  1,456
  1,536
  1,619
  1,705
  1,796
  1,891
  1,991
  2,095
  2,204
  2,319
  2,439
  2,564
Working capital, $m
  176
  190
  204
  219
  235
  251
  268
  286
  304
  324
  343
  364
  386
  408
  432
  456
  482
  509
  537
  566
  596
  628
  662
  697
  734
  772
  812
  854
  899
  945
Total debt, $m
  333
  374
  418
  462
  509
  557
  607
  659
  714
  770
  829
  890
  954
  1,021
  1,090
  1,163
  1,239
  1,318
  1,401
  1,487
  1,577
  1,672
  1,771
  1,874
  1,983
  2,097
  2,216
  2,340
  2,471
  2,608
Total liabilities, $m
  520
  561
  604
  649
  695
  744
  794
  846
  900
  957
  1,016
  1,077
  1,141
  1,208
  1,277
  1,350
  1,425
  1,504
  1,587
  1,673
  1,764
  1,858
  1,957
  2,061
  2,169
  2,283
  2,402
  2,527
  2,657
  2,794
Total equity, $m
  672
  726
  781
  839
  899
  962
  1,027
  1,094
  1,165
  1,238
  1,314
  1,393
  1,476
  1,562
  1,652
  1,746
  1,844
  1,946
  2,053
  2,165
  2,282
  2,404
  2,532
  2,666
  2,806
  2,953
  3,107
  3,269
  3,438
  3,615
Total liabilities and equity, $m
  1,192
  1,287
  1,385
  1,488
  1,594
  1,706
  1,821
  1,940
  2,065
  2,195
  2,330
  2,470
  2,617
  2,770
  2,929
  3,096
  3,269
  3,450
  3,640
  3,838
  4,046
  4,262
  4,489
  4,727
  4,975
  5,236
  5,509
  5,796
  6,095
  6,409
Debt-to-equity ratio
  0.500
  0.520
  0.530
  0.550
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.650
  0.650
  0.660
  0.670
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.700
  0.700
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
Adjusted equity ratio
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564
  0.564

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  98
  124
  151
  179
  209
  240
  272
  305
  340
  377
  451
  491
  533
  576
  622
  670
  720
  773
  828
  886
  947
  1,011
  1,078
  1,148
  1,222
  1,300
  1,382
  1,468
  1,558
  1,653
Depreciation, amort., depletion, $m
  79
  82
  84
  87
  90
  93
  95
  99
  102
  105
  59
  63
  67
  71
  75
  79
  83
  88
  93
  98
  103
  109
  114
  120
  127
  133
  140
  148
  155
  163
Funds from operations, $m
  178
  206
  236
  266
  299
  332
  367
  404
  442
  482
  510
  554
  599
  647
  697
  749
  804
  861
  921
  984
  1,050
  1,120
  1,192
  1,269
  1,349
  1,434
  1,522
  1,616
  1,714
  1,817
Change in working capital, $m
  13
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  37
  38
  40
  42
  44
  46
Cash from operations, $m
  164
  192
  221
  251
  283
  316
  350
  386
  424
  463
  490
  533
  578
  624
  673
  724
  778
  834
  893
  955
  1,020
  1,088
  1,159
  1,234
  1,313
  1,395
  1,482
  1,573
  1,669
  1,770
Maintenance CAPEX, $m
  -28
  -30
  -33
  -35
  -38
  -41
  -43
  -46
  -49
  -53
  -56
  -59
  -63
  -67
  -71
  -75
  -79
  -83
  -88
  -93
  -98
  -103
  -109
  -114
  -120
  -127
  -133
  -140
  -148
  -155
New CAPEX, $m
  -37
  -38
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -69
  -73
  -76
  -79
  -83
  -87
  -91
  -95
  -100
  -104
  -109
  -114
  -120
  -126
Cash from investing activities, $m
  -65
  -68
  -73
  -76
  -81
  -85
  -89
  -94
  -99
  -105
  -110
  -115
  -122
  -128
  -135
  -142
  -148
  -156
  -164
  -172
  -181
  -190
  -200
  -209
  -220
  -231
  -242
  -254
  -268
  -281
Free cash flow, $m
  99
  124
  149
  175
  202
  231
  261
  292
  324
  358
  380
  417
  456
  497
  539
  583
  630
  678
  729
  783
  839
  898
  960
  1,024
  1,093
  1,164
  1,239
  1,319
  1,402
  1,489
Issuance/(repayment) of debt, $m
  40
  41
  43
  45
  46
  48
  50
  52
  54
  57
  59
  61
  64
  67
  69
  73
  76
  79
  83
  86
  90
  95
  99
  104
  108
  114
  119
  125
  131
  137
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  
  40
  41
  43
  45
  46
  48
  50
  52
  54
  57
  59
  61
  64
  67
  69
  73
  76
  79
  83
  86
  90
  95
  99
  104
  108
  114
  119
  125
  131
  137
Total cash flow (excl. dividends), $m
  139
  165
  192
  220
  249
  279
  311
  344
  379
  415
  439
  479
  520
  563
  608
  656
  705
  757
  812
  869
  929
  992
  1,058
  1,128
  1,201
  1,278
  1,359
  1,443
  1,532
  1,626
Retained Cash Flow (-), $m
  -52
  -54
  -56
  -58
  -60
  -62
  -65
  -68
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -94
  -98
  -102
  -107
  -112
  -117
  -122
  -128
  -134
  -140
  -147
  -154
  -161
  -169
  -177
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
  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
  87
  111
  136
  162
  189
  217
  246
  277
  308
  342
  363
  399
  437
  477
  519
  562
  607
  655
  705
  757
  812
  870
  930
  994
  1,061
  1,131
  1,205
  1,282
  1,363
  1,449
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
  84
  102
  118
  133
  146
  157
  166
  173
  177
  179
  172
  170
  166
  160
  152
  143
  132
  121
  109
  96
  84
  72
  61
  51
  41
  33
  26
  20
  15
  11
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

TriMas Corporation is a designer, manufacturer and distributor of engineered products for commercial, industrial and consumer markets. The Company operates through four segments: Packaging, Aerospace, Energy and Engineered Components. The Packaging segment is a designer, manufacturer and distributor of engineered closure and dispensing systems for a range of end markets, including steel and plastic industrial, and consumer packaging applications. The Aerospace segment is a designer and manufacturer of a range of products for use in the aerospace industry. The Energy segment is a manufacturer and distributor of metallic and non-metallic gaskets, bolts, industrial fasteners and specialty products for the petroleum refining, petrochemical, oil field and industrial markets. The Engineered Components segment is a designer, manufacturer and distributor of high-pressure and acetylene cylinders for the transportation, storage and dispensing of compressed gases.

FINANCIAL RATIOS  of  TriMas Corporation (TRS)

Valuation Ratios
P/E Ratio -36.1
Price to Sales 1.8
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 18
Price to Free Cash Flow 29.5
Growth Rates
Sales Growth Rate -8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6.9%
Cap. Spend. - 3 Yr. Gr. Rate -4.5%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 72.2%
Total Debt to Equity 75%
Interest Coverage -4
Management Effectiveness
Return On Assets -2.9%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -4.3%
Ret/ On T. Cap. - 3 Yr. Avg. -0.3%
Return On Equity -7.6%
Return On Equity - 3 Yr. Avg. -0.5%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 26.4%
Gross Margin - 3 Yr. Avg. 26.8%
EBITDA Margin -0.3%
EBITDA Margin - 3 Yr. Avg. 5.8%
Operating Margin -5.5%
Oper. Margin - 3 Yr. Avg. 1%
Pre-Tax Margin -7.3%
Pre-Tax Margin - 3 Yr. Avg. -0.7%
Net Profit Margin -5%
Net Profit Margin - 3 Yr. Avg. -0.4%
Effective Tax Rate 31%
Eff/ Tax Rate - 3 Yr. Avg. 10.7%
Payout Ratio 0%

TRS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TRS stock intrinsic value calculation we used $877 million for the last fiscal year's total revenue generated by TriMas Corporation. The default revenue input number comes from 0001 income statement of TriMas Corporation. 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 TRS stock valuation model: a) initial revenue growth rate of 8.3% 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 TRS is calculated based on our internal credit rating of TriMas Corporation, 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 TriMas Corporation.
    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 TRS stock the variable cost ratio is equal to 44.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $371 million in the base year in the intrinsic value calculation for TRS 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 TriMas Corporation.

Corporate tax rate of 27% is the nominal tax rate for TriMas Corporation. 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 TRS 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 TRS are equal to 50.2%.

Life of production assets of 15.7 years is the average useful life of capital assets used in TriMas Corporation 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 TRS is equal to 18.5%. 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 - $620.45 million for TriMas Corporation - 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 45.629 million for TriMas Corporation 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 TriMas Corporation at the current share price and the inputted number of shares is $1.4 billion.

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