- The document analyzes National Presto stock using discounted cash flow analysis and calculates a fair share price of $88.90 based on projections of revenue, expenses, and cash flows for the company's business segments from 2012-2014. - While the current stock price of $97.72 is higher than the calculated price, the difference is not drastic, so an existing investor could hold, but a new investor may want to wait before purchasing given the estimates used. - Growth assumptions for different business segments vary due to uncertainty in defense spending.

1. National Presto Stock Analysis
ANDREW FINEMORE

2. Assumptions
 Cap Rate Calculations Cost of Equity/CAPM 7.52%
Risk Free Rate 1.83% 10 year note
Beta 0.83 Capital IQ
S&P Growth 8.69% Capital IQ
 Growth of revenue is going to vary as defense
spending is unknown so there are decreases and
increases in revenue to account for volatility
 Small Appliances and Absorbent products appear to
be on track for constant modest growth in the future

3. Discounted Cash Flow
Data from most recent 10K 2012 2013 2014
Housewares/Appliances $ 167,551,116 $ 172,828,976 $ 178,273,088
Defense $ 234,115,334 $ 238,797,641 $ 243,573,594
Absorbent Products $ 84,850,658 $ 87,396,178 $ 89,144,102
Total Revenue $ 486,517,108 $ 499,022,795 $ 510,990,784
COGS $ (378,853,614) $ (388,324,955) $ (398,033,079)
Gross Profit $ 107,663,494 $ 110,697,840 $ 112,957,705
SG&A $ (18,000,000) $ (18,360,000) $ (18,727,200)
EBIT $ 89,663,494 $ 92,337,840 $ 94,230,505
Net Income $ 58,676,288.23 $ 60,426,395.24 $ 61,664,965.89
Change in W/C $ (13,135,848.02) $ (13,473,498.62) $ (13,796,631.53)
Cap. Exp. $ (11,044,118.57) $ (11,328,002.29) $ (11,599,680.07)
Operating Cash Flow $ 34,496,322 $ 35,624,894 $ 36,268,654
Terminal Value $ 645,892,383.50
FCF $ 34,496,322 $ 35,624,894 $ 682,161,038
PV of FCF $ 32,082,499 $ 30,813,737 $ 548,748,186
Total PV $ 611,644,422
Shares Outstanding 6880000
Share Price $ 88.90

4. Recommendations
 The current stock price is $97.72 which is higher
then the calculated price from the DCF
 What this means
 The price is not drastically above the DCF price which would
indicate a tentative hold if already owning the stock because
the calculations are built on estimates
 A prospective buyer would be cautious of purchasing the stock
and would be smart to wait and watch the stock for a period of
time