Martin Marietta Corp. (MLM) stock valuation report by analyst Mason Gregory for the Student Managed Investment Fund at the University of North Carolina. The report recommends holding the current position in MLM but selling if the stock price crosses $300 per share. It identifies MLM's sector strength from expected infrastructure spending, strong operating performance compared to peers, and historical growth as investment positives. Potential risks are speculation from election results, an economic downturn, and increased competition. The report analyzes MLM's financials, finding increasing NOPLAT, invested capital, and volatile ROIC. It concludes by calculating intrinsic value and comparing to current market price.
Q3 2016 Myers Industries Inc. Earnings Presentation FinalMyers_Investors
Myers Industries, Inc. held a third quarter earnings presentation on November 8, 2016 to discuss financial results and outlook. Key points included:
- Third quarter sales were in line with expectations but down 6% year-over-year due to continued weakness in capital spending.
- Gross margin declined 230 basis points due to lower volume, unfavorable product mix and operational inefficiencies.
- SG&A expenses declined due to lower non-recurring compensation and cost containment actions.
- Adjusted EPS from continuing operations was $0.04, down from $0.09 in the prior year third quarter.
- For 2016, the company expects revenue to be down mid-to-high single digits
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- The Chicago Business Barometer remained below 50 in March, pointing to a slowdown in the US economy. The Barometer increased slightly to 46.3 but was still in contraction territory.
- Production increased in March but remained below 50, while new orders and order backlogs rose slightly but remained contracted. Employment also rose slightly.
- While some of the weakness may be due to weather and port strikes, the continued weakness in March suggests a wider slowdown. Purchasers expect orders to pick up in the next quarter but demand remained soft in the first quarter.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- Myers Industries reported earnings for the first quarter of 2017, with net sales declining 6.3% year-over-year to $141.7 million due to weakness in key end markets like agriculture.
- Adjusted operating income was $8.1 million, down from $11.7 million in the prior year, as lower sales volumes and higher raw material costs reduced gross profit. However, SG&A expenses declined due to lower compensation costs.
- The Material Handling segment saw a 5.4% sales decline due to weak agricultural demand, while the Distribution segment's 8.6% sales drop was driven by a soft demand environment. Both experienced lower adjusted operating income due to volume declines partially offset by
Oshkosh Corporation reported strong financial results for the second quarter of fiscal year 2018, with net sales, adjusted operating income, and adjusted earnings per share exceeding expectations. Sales growth was driven by double-digit increases in the non-defense segments. The company also raised its full-year adjusted earnings per share guidance range due to higher expected sales and a lower tax rate resulting from US tax reform. Oshkosh reaffirmed its focus on execution despite some operational challenges with increasing production levels.
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of
stock and bond asset classes in the US and
international markets.
Real matters q1 2018 conference call update finalrealmatters2016
- The document summarizes Real Matter's Q1 2018 conference call, highlighting financial results for the period ending December 31, 2017.
- Key highlights included consolidated market adjusted revenue growth of 19% driven by appraisal growth of 30% market share. However, title and closing revenues declined 4% due to lower refinance volumes.
- Net loss for Q1 2018 was $5.4 million compared to a net loss of $2.3 million in Q1 2017, reflecting lower net revenue margins from a change in revenue mix and investments to support growth.
Q3 2016 Myers Industries Inc. Earnings Presentation FinalMyers_Investors
Myers Industries, Inc. held a third quarter earnings presentation on November 8, 2016 to discuss financial results and outlook. Key points included:
- Third quarter sales were in line with expectations but down 6% year-over-year due to continued weakness in capital spending.
- Gross margin declined 230 basis points due to lower volume, unfavorable product mix and operational inefficiencies.
- SG&A expenses declined due to lower non-recurring compensation and cost containment actions.
- Adjusted EPS from continuing operations was $0.04, down from $0.09 in the prior year third quarter.
- For 2016, the company expects revenue to be down mid-to-high single digits
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- The Chicago Business Barometer remained below 50 in March, pointing to a slowdown in the US economy. The Barometer increased slightly to 46.3 but was still in contraction territory.
- Production increased in March but remained below 50, while new orders and order backlogs rose slightly but remained contracted. Employment also rose slightly.
- While some of the weakness may be due to weather and port strikes, the continued weakness in March suggests a wider slowdown. Purchasers expect orders to pick up in the next quarter but demand remained soft in the first quarter.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- Myers Industries reported earnings for the first quarter of 2017, with net sales declining 6.3% year-over-year to $141.7 million due to weakness in key end markets like agriculture.
- Adjusted operating income was $8.1 million, down from $11.7 million in the prior year, as lower sales volumes and higher raw material costs reduced gross profit. However, SG&A expenses declined due to lower compensation costs.
- The Material Handling segment saw a 5.4% sales decline due to weak agricultural demand, while the Distribution segment's 8.6% sales drop was driven by a soft demand environment. Both experienced lower adjusted operating income due to volume declines partially offset by
Oshkosh Corporation reported strong financial results for the second quarter of fiscal year 2018, with net sales, adjusted operating income, and adjusted earnings per share exceeding expectations. Sales growth was driven by double-digit increases in the non-defense segments. The company also raised its full-year adjusted earnings per share guidance range due to higher expected sales and a lower tax rate resulting from US tax reform. Oshkosh reaffirmed its focus on execution despite some operational challenges with increasing production levels.
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of
stock and bond asset classes in the US and
international markets.
Real matters q1 2018 conference call update finalrealmatters2016
- The document summarizes Real Matter's Q1 2018 conference call, highlighting financial results for the period ending December 31, 2017.
- Key highlights included consolidated market adjusted revenue growth of 19% driven by appraisal growth of 30% market share. However, title and closing revenues declined 4% due to lower refinance volumes.
- Net loss for Q1 2018 was $5.4 million compared to a net loss of $2.3 million in Q1 2017, reflecting lower net revenue margins from a change in revenue mix and investments to support growth.
LBS - Asset Allocation Model – February UpdateMark MacIsaac
Robust and synchronized upswing in global economic growth, still accelerating earnings growth, global consensus earnings projections continuing to improve and accommodative financial conditions all remained supportive of equities in January.
The Bridgepoint Midwest M&A Index, which measures merger and acquisition activity in the Midwest US, decreased 1.6% in Q4 2011 from the previous quarter. On a year-over-year basis, the index was down 9.8% from Q4 2010. The latest decrease reflects slowing M&A deal volumes in the Midwest amid an uneven economic recovery. However, larger deals are still being completed and valuations have remained reasonable, representing opportunities for companies to strategically evaluate their options.
The document provides an analysis of global markets and the economy from FinLight Research. Key points include:
1) The US election uncertainty is over but markets are still digesting implications of Trump's victory. Earnings had been improving but higher wages could weigh on margins.
2) The global economy appears to be improving but investors should avoid complacency given uncertainty. The focus is on 3Q earnings season, rising wages, expected inflation, and volatile volatility.
3) Macroeconomic indicators show mixed signals with strong employment/income but weak industrial production. Systemic risks include high Chinese debt and a potential hard Brexit.
4) Equity valuations remain high and earnings growth is needed for further gains.
Q2 2018 Quarterly Market Review: This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios and features a quarterly topic.
- Masco Corporation presented its third quarter 2016 earnings results, highlighting revenue growth of 2% year-over-year to $1.877 billion driven by strength in end markets and market share gains.
- Operating profit increased to $275 million, a margin of 14.7%, due to operating leverage from volume growth and productivity initiatives. However, operating profit was negatively impacted by a $21 million increase to warranty reserves.
- The presentation provided financial results by business segment, with plumbing products and builders' hardware driving growth, while cabinetry and windows saw mixed results. Management also discussed strengthening the balance sheet through debt repayment and share repurchases.
The document provides an analysis of global market perspectives and asset allocation views from FinLight Research. Some key points:
1) The global economic recovery is still fragile and many signs point to a slowdown, including China's declining exports and downward revisions to its growth rate. Market volatility is expected to rise over the next 1-3 months.
2) Macroeconomic data is mixed with some positive signs like auto sales but also risks like high earnings warnings and China's slowing growth. Corporate profit margins are at record highs but face pressures from rising rates and a tightening labor market.
3) Equity markets have risen to high valuations and are vulnerable to a correction, especially if earnings do not improve.
- Myers Industries reported net sales of $151.2 million in Q1 2016, a decrease of 3.3% from the prior year due to organic sales decline of 1.3% and unfavorable currency impact of 2%.
- Gross margin increased 260 basis points to 31.9% due to lower input costs, operational improvements, and product line rationalization.
- Adjusted EPS from continuing operations increased 75% to $0.21 due to gross margin expansion partially offset by higher capital spending.
- Several large one-time charges were recorded in Q1 including $8.5 million in non-cash impairment charges in Brazil and $2 million in CFO severance costs.
- Real interest rates in the US are currently at their most negative level in almost three decades, which is an important development that should not be ignored by investors.
- Historically, periods of deeply negative real rates have typically been followed by improvements in leading economic indicators and increased spending, consumption, and demand for assets by both consumers and businesses.
- Based on historical relationships, the current negative real rate environment suggests that US economic prospects and equity markets may find increased support and possibly a sustained rally in the coming year.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios and features a quarterly topic.
The Bridgepoint Midwest M&A Index, which measures merger and acquisition activity in the US Midwest region, increased 18.7% in the first quarter of 2012 after decreasing 1.6% in the previous quarter, reaching a new high. The index increase reflects improved M&A deal volume in the Midwest, with 293 transactions in Q1 2012 compared to 262 in the same quarter the previous year. Median deal sizes decreased from $20.5 million to $12 million from Q4 2011 to Q1 2012. Selected transactions highlighted manufacturing, energy, and technology deals.
James Avery jewelry sought to attract new customers with a new store prototype featuring digital signage. The signage tells the brand's story and highlights products in a dynamic way to engage customers. Pairs of video screens rotate messages about products and the brand's history and philosophy. This creates branded customer experiences that enhance approachability and visibility compared to static signage. The digital elements focus on connecting people to the brand through relevant experiences within different "shops" in the store highlighting products.
This document provides a framework for comparing data from National Income Accounts (NIA) and company financial statements prepared under Generally Accepted Accounting Principles (GAAP). It identifies 5 key factors that determine the relationships between NIA and GAAP data: 1) universe of coverage, 2) geography treatment, 3) industry designations, 4) forecasting approaches, and 5) indicators used. The document then provides 3 case studies that illustrate how these factors impact comparisons of revenues, capital expenditures, and profits between NIA industry data and GAAP company/peer group data.
In this webinar, Pure Financial Advisors' Director of Research, Brian Perry, CFP®, CFA®, gives an overview of the market activity in the third quarter of 2018.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- The document discusses the potential economic impact of President-elect Donald Trump's proposed fiscal plans, including tax cuts and increased spending.
- It finds that tax cuts would provide a larger short-term boost to growth than increased spending, but that spending measures have higher fiscal multipliers. Tax cuts are also more likely to push up Treasury yields and pose risks for bond investors.
- The size and permanence of the tax cuts will determine their impact, with temporary cuts having lower multipliers than permanent ones. Spending is generally more efficient at boosting growth.
- Trump's tax cut proposals are larger than Republican plans but may be less effective at boosting growth due to focusing more on high-income
- Wal-Mart reported third quarter fiscal year 2009 results, with net sales increasing 7.5% to $97.6 billion and income from continuing operations increasing 6.6% to $3.03 billion compared to the previous year.
- US comparable store sales increased 2.7% for Walmart and 4.5% for Sam's Club. International sales grew 11.2% and segment operating income increased 10.6%.
- For the full fiscal year, Wal-Mart estimates diluted earnings per share will be between $3.42-$3.46, lowered from previous guidance due to currency exchange rate impacts.
Small Business Economic Trends Report from NFIB -- July 2015NFIB
After giving up over 4 points in June, NFIB's Small Business Optimism Index clawed back 1.3 points in July, a familiar theme now, which has produced the most grudging gains in the
Index’s history – and still not above the 42 year average of 98. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.
Oshkosh Corporation reported solid financial results for the first quarter of fiscal year 2018, exceeding expectations. Net sales increased 30.9% compared to the previous year due to double digit sales growth in the defense, access equipment, and commercial segments. Adjusted earnings per share of $0.84 also exceeded projections. Based on its strong performance, the company raised its full year adjusted earnings per share guidance range to $5.00 to $5.45. Backlogs remained strong across all four of Oshkosh's business segments.
This document provides a literature review on the emergence and evolution of corporate social responsibility (CSR) globally. It discusses how CSR first emerged in the 1950s and has since gone through various phases of development and conceptualization. The review outlines the different perspectives on CSR in the literature, from Milton Friedman's view that a firm's only social responsibility is to increase profits, to arguments that CSR should go beyond philanthropy to integrate social and environmental concerns into core business operations. The review provides historical context on the shifting views of CSR and how it has evolved from a marginal activity to a strategic business concept.
This document contains answers to questions about various C programming concepts. It defines a function as a group of statements that perform a task, and a pointer as a variable that holds the address of another variable. It describes an array as a collection of elements of the same type stored in contiguous memory locations. It also defines structures, unions, strings, macros, typedef, call by value vs reference, and more. It includes programs to check for a leap year, prime numbers, factorials, Fibonacci series, and other examples.
LBS - Asset Allocation Model – February UpdateMark MacIsaac
Robust and synchronized upswing in global economic growth, still accelerating earnings growth, global consensus earnings projections continuing to improve and accommodative financial conditions all remained supportive of equities in January.
The Bridgepoint Midwest M&A Index, which measures merger and acquisition activity in the Midwest US, decreased 1.6% in Q4 2011 from the previous quarter. On a year-over-year basis, the index was down 9.8% from Q4 2010. The latest decrease reflects slowing M&A deal volumes in the Midwest amid an uneven economic recovery. However, larger deals are still being completed and valuations have remained reasonable, representing opportunities for companies to strategically evaluate their options.
The document provides an analysis of global markets and the economy from FinLight Research. Key points include:
1) The US election uncertainty is over but markets are still digesting implications of Trump's victory. Earnings had been improving but higher wages could weigh on margins.
2) The global economy appears to be improving but investors should avoid complacency given uncertainty. The focus is on 3Q earnings season, rising wages, expected inflation, and volatile volatility.
3) Macroeconomic indicators show mixed signals with strong employment/income but weak industrial production. Systemic risks include high Chinese debt and a potential hard Brexit.
4) Equity valuations remain high and earnings growth is needed for further gains.
Q2 2018 Quarterly Market Review: This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios and features a quarterly topic.
- Masco Corporation presented its third quarter 2016 earnings results, highlighting revenue growth of 2% year-over-year to $1.877 billion driven by strength in end markets and market share gains.
- Operating profit increased to $275 million, a margin of 14.7%, due to operating leverage from volume growth and productivity initiatives. However, operating profit was negatively impacted by a $21 million increase to warranty reserves.
- The presentation provided financial results by business segment, with plumbing products and builders' hardware driving growth, while cabinetry and windows saw mixed results. Management also discussed strengthening the balance sheet through debt repayment and share repurchases.
The document provides an analysis of global market perspectives and asset allocation views from FinLight Research. Some key points:
1) The global economic recovery is still fragile and many signs point to a slowdown, including China's declining exports and downward revisions to its growth rate. Market volatility is expected to rise over the next 1-3 months.
2) Macroeconomic data is mixed with some positive signs like auto sales but also risks like high earnings warnings and China's slowing growth. Corporate profit margins are at record highs but face pressures from rising rates and a tightening labor market.
3) Equity markets have risen to high valuations and are vulnerable to a correction, especially if earnings do not improve.
- Myers Industries reported net sales of $151.2 million in Q1 2016, a decrease of 3.3% from the prior year due to organic sales decline of 1.3% and unfavorable currency impact of 2%.
- Gross margin increased 260 basis points to 31.9% due to lower input costs, operational improvements, and product line rationalization.
- Adjusted EPS from continuing operations increased 75% to $0.21 due to gross margin expansion partially offset by higher capital spending.
- Several large one-time charges were recorded in Q1 including $8.5 million in non-cash impairment charges in Brazil and $2 million in CFO severance costs.
- Real interest rates in the US are currently at their most negative level in almost three decades, which is an important development that should not be ignored by investors.
- Historically, periods of deeply negative real rates have typically been followed by improvements in leading economic indicators and increased spending, consumption, and demand for assets by both consumers and businesses.
- Based on historical relationships, the current negative real rate environment suggests that US economic prospects and equity markets may find increased support and possibly a sustained rally in the coming year.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
This report features world capital market performance and a timeline of events for the past quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios and features a quarterly topic.
The Bridgepoint Midwest M&A Index, which measures merger and acquisition activity in the US Midwest region, increased 18.7% in the first quarter of 2012 after decreasing 1.6% in the previous quarter, reaching a new high. The index increase reflects improved M&A deal volume in the Midwest, with 293 transactions in Q1 2012 compared to 262 in the same quarter the previous year. Median deal sizes decreased from $20.5 million to $12 million from Q4 2011 to Q1 2012. Selected transactions highlighted manufacturing, energy, and technology deals.
James Avery jewelry sought to attract new customers with a new store prototype featuring digital signage. The signage tells the brand's story and highlights products in a dynamic way to engage customers. Pairs of video screens rotate messages about products and the brand's history and philosophy. This creates branded customer experiences that enhance approachability and visibility compared to static signage. The digital elements focus on connecting people to the brand through relevant experiences within different "shops" in the store highlighting products.
This document provides a framework for comparing data from National Income Accounts (NIA) and company financial statements prepared under Generally Accepted Accounting Principles (GAAP). It identifies 5 key factors that determine the relationships between NIA and GAAP data: 1) universe of coverage, 2) geography treatment, 3) industry designations, 4) forecasting approaches, and 5) indicators used. The document then provides 3 case studies that illustrate how these factors impact comparisons of revenues, capital expenditures, and profits between NIA industry data and GAAP company/peer group data.
In this webinar, Pure Financial Advisors' Director of Research, Brian Perry, CFP®, CFA®, gives an overview of the market activity in the third quarter of 2018.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
- The document discusses the potential economic impact of President-elect Donald Trump's proposed fiscal plans, including tax cuts and increased spending.
- It finds that tax cuts would provide a larger short-term boost to growth than increased spending, but that spending measures have higher fiscal multipliers. Tax cuts are also more likely to push up Treasury yields and pose risks for bond investors.
- The size and permanence of the tax cuts will determine their impact, with temporary cuts having lower multipliers than permanent ones. Spending is generally more efficient at boosting growth.
- Trump's tax cut proposals are larger than Republican plans but may be less effective at boosting growth due to focusing more on high-income
- Wal-Mart reported third quarter fiscal year 2009 results, with net sales increasing 7.5% to $97.6 billion and income from continuing operations increasing 6.6% to $3.03 billion compared to the previous year.
- US comparable store sales increased 2.7% for Walmart and 4.5% for Sam's Club. International sales grew 11.2% and segment operating income increased 10.6%.
- For the full fiscal year, Wal-Mart estimates diluted earnings per share will be between $3.42-$3.46, lowered from previous guidance due to currency exchange rate impacts.
Small Business Economic Trends Report from NFIB -- July 2015NFIB
After giving up over 4 points in June, NFIB's Small Business Optimism Index clawed back 1.3 points in July, a familiar theme now, which has produced the most grudging gains in the
Index’s history – and still not above the 42 year average of 98. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.
Oshkosh Corporation reported solid financial results for the first quarter of fiscal year 2018, exceeding expectations. Net sales increased 30.9% compared to the previous year due to double digit sales growth in the defense, access equipment, and commercial segments. Adjusted earnings per share of $0.84 also exceeded projections. Based on its strong performance, the company raised its full year adjusted earnings per share guidance range to $5.00 to $5.45. Backlogs remained strong across all four of Oshkosh's business segments.
This document provides a literature review on the emergence and evolution of corporate social responsibility (CSR) globally. It discusses how CSR first emerged in the 1950s and has since gone through various phases of development and conceptualization. The review outlines the different perspectives on CSR in the literature, from Milton Friedman's view that a firm's only social responsibility is to increase profits, to arguments that CSR should go beyond philanthropy to integrate social and environmental concerns into core business operations. The review provides historical context on the shifting views of CSR and how it has evolved from a marginal activity to a strategic business concept.
This document contains answers to questions about various C programming concepts. It defines a function as a group of statements that perform a task, and a pointer as a variable that holds the address of another variable. It describes an array as a collection of elements of the same type stored in contiguous memory locations. It also defines structures, unions, strings, macros, typedef, call by value vs reference, and more. It includes programs to check for a leap year, prime numbers, factorials, Fibonacci series, and other examples.
El impacto de las tecnologias en nuestro entornodani11gon
Este documento describe el impacto de las tecnologías en nuestro entorno. Explica que las tecnologías relacionadas con la informática y las comunicaciones como Internet y los teléfonos móviles han causado un cambio estructural en la sociedad a nivel económico y en las relaciones sociales. Si bien estas tecnologías facilitan nuestra vida, también pueden provocar cambios en los valores y las conductas de las personas al fomentar la comunicación en línea en lugar de las interacciones cara a cara.
El impacto de las tecnologias en nuestro entornodani11gon
Este documento describe el impacto de las tecnologías en nuestro entorno. Explica que las tecnologías relacionadas con la informática y las comunicaciones como Internet y los teléfonos móviles han causado un cambio estructural en la sociedad a nivel económico y en las relaciones sociales. Si bien estas tecnologías facilitan nuestra vida, también pueden provocar cambios en los valores y conductas de las personas al fomentar la comunicación en línea en lugar de las interacciones cara a cara.
This report evaluates the academic credentials of Daniele Lanzani from Italy. It finds that his Bachelor of Arts in European Economics from Universita Degli Studi di Roma Tor Vergata is equivalent to a bachelor's degree from a regionally accredited US institution. His Master of Arts in Social and Economic Sciences from the same institution is also found to be equivalent to a master's degree from a regionally accredited US institution. The report includes details of the programs such as length and documents reviewed to make the determinations.
El impacto de las tecnologias en nuestro entornodani11gon
Este documento describe el impacto de las tecnologías en nuestro entorno. Explica que las tecnologías relacionadas con la informática y las comunicaciones como Internet y los teléfonos móviles han causado un cambio estructural en la sociedad a nivel económico y en las relaciones sociales. Si bien estas tecnologías facilitan nuestra vida, también pueden provocar cambios en los valores y conductas de las personas al fomentar la comunicación en línea en lugar de las interacciones cara a cara.
Lillian Gomez has over 10 years of experience in purchasing, procurement, and administrative roles. She has strong skills in SAP, Oracle, and other systems and prides herself on her analytical abilities and problem-solving skills. Her experience includes roles managing contracts and purchasing processes at Houston Methodist Corporate Office and coordinating purchasing activities at Cameron. She also has experience in accounts payable, payroll, and administrative support roles.
Jyoti is a recent graduate with a B.E. in Computer Technology from Priyadarshini Institute of Engineering and Technology. She has skills in programming languages like C, C++, and basic knowledge of Java and HTML. Her goal is to obtain a position in the corporate sector where she can deliver quality services and be innovative. She has experience in projects involving customer relationship management applications using DBMS. Jyoti was university topper in her 3rd and 4th semesters and participated in various college activities and competitions, winning several prizes. She is interested in web technology, guitar, photography, and further study.
The document provides examples of cube numbers from 1 to 10 and their calculations. It then lists the cube numbers as 1, 8, 27, 64, 125, 216, 343, 512, 729 and 1000. It also contains pseudocode for a program to print numbers from 11 to an input number. Finally, it shows formulas for calculating the perimeter of a rectangle, square and triangle.
Este documento contiene recetas de varios platillos como pizza peperoni, lasaña, hamburguesa, tacos de trompo, tacos de cecina y más. Cada receta incluye una lista de ingredientes y pasos detallados para preparar el platillo.
Relatório de impacto 2016 - Social Brasilis - Empoderar para empreender Social Brasilis
O relatório das ações realizados pelo Social Brasilis no ano de 2016. Com cursos, formações, workshop, palestra e muito mais o Social Brasilis reforça o compromisso com o empoderamento de pessoas através da educação, usando o empreendedorismo social e tecnologia para fomentar novos protagonista sociais.
A ABA Engenharia oferece serviços de engenharia para projetos elétricos, como geração, transmissão e distribuição de energia, além de gestão de projetos. A empresa utiliza tecnologias como modelagem 3D e inteligência artificial para otimizar projetos. A ABA Engenharia já desenvolveu projetos para vários clientes nos setores de energia eólica, transmissão e indústria.
GT Events and Program Guide is a look ahead at the latest knowledge and insights available from Grant Thornton LLP. It includes a collection of our research, thought leadership and a schedule of upcoming webcasts and events.
MGM Resorts International reported financial results for the fourth quarter and full year of 2017. Key highlights include:
- Net income of $1.4 billion for Q4 2017 and $2.0 billion for the full year, boosted by a one-time tax benefit.
- Consolidated revenues increased 6% in Q4 2017 and 14% for the full year.
- Domestic resorts adjusted EBITDA rose 1% in Q4 2017 and 22% for the full year, demonstrating continued margin growth.
- The company increased its quarterly dividend by 9% and expanded share repurchases, returning capital to shareholders.
- Recent openings like MGM COTAI in Macau and
The document provides guidelines and a rubric for a final project in an international finance course. Students will create a multinational performance report analyzing a selected company's approach to international expansion. The report must address the company's background, economic and market conditions it faces, its risk mitigation strategies, ethical and legal practices, and future risks and challenges. It will be submitted in stages for feedback and the final grade will be based on inclusion of required elements, analysis, and use of examples from the company's financial reports.
Genworth MI Canada Inc. reported its third quarter 2018 results. Key highlights included:
- Total premiums written decreased modestly year-over-year due to a smaller mortgage market size and lower average premium rates.
- Net operating income was up quarter-over-quarter primarily due to higher investment income.
- The company maintained a strong capital position with an MCT ratio of 171% and book value per share growth of 7% year-over-year.
- The insurance portfolio quality remained strong with average borrower credit scores of 748 and low levels of high risk loans.
Coursework ProjectCompanies are paying out too much in dividenCruzIbarra161
This document provides information about a coursework project evaluating a company's dividend policy and its impact on share price. It includes instructions for completing four parts of the project: a) evaluating dividend policy theories; b) analyzing the dividend policy and share price of a selected company over 11 years; c) using the Fisher-Hirshleifer model to examine investment and consumption decisions; and d) discussing the importance of mergers and acquisitions. Additional context and data tables are provided about a company called Motomart for use in completing the project analysis.
16Case 1.3 Just for Feet, Inc.Prepared byIvette Must.docxdrennanmicah
This document discusses the case of Just for Feet, Inc., a retail shoe company that went bankrupt in the late 1990s. It provides background facts on the company's founding, growth, and bankruptcy. It then analyzes various financial metrics and ratios for Just for Feet from 1996-1998 that indicate high risks, such as increasing inventory and debt levels. The document also identifies internal control and competitive risks for such a large retail operation and how these should affect audit planning. Finally, it lists audit risk factors for Just for Feet's 1998 audit and asks to identify the top five risks and whether the auditors appropriately addressed them.
MGM Resorts International reported financial results for the third quarter of 2017. Net income was $149 million. Domestic resort revenues increased 18% due to strong performance of Las Vegas Strip properties and a full quarter of operations for recently acquired properties. Adjusted Property EBITDA for domestic resorts grew 25% to $714 million. MGM China reported a 21% decrease in Adjusted EBITDA to $118 million despite a 2% increase from the previous quarter. MGM Resorts remains focused on maximizing shareholder value through continued investment in existing properties and prudent growth opportunities.
Seminar 8 creating an investment recommendationpvalantagul
The document provides guidance on creating an investment recommendation and pitching a stock. It outlines the key components of a stock pitch, including analyzing if a company is a good business and if it will be a good stock. An example stock pitch for Waste Management is then presented, analyzing the company, industry, financials, valuation, opportunities/risks, and recommending the stock as a buy. The document emphasizes synthesizing information from prior seminars to develop an investment thesis and recommendation.
1) The document discusses the causes and effects of the 2008 global financial crisis, comparing it to the 1929 crash. It analyzes factors like loose regulation, risky lending practices, and accounting standards that contributed to hidden economic bubbles bursting.
2) Going forward, the document recommends measures like improving supervision, reforming compensation schemes, and coordinating international regulatory alignment to prevent future crises and promote recovery.
3) While short term economic pressure is expected, stimulus packages and a focus on innovation could help economies recover once clean up of bank balance sheets is complete. Risk management practices will also likely be overhauled.
Mercer Capital's Investment Management Industry Newsletter | Q4 2018 | Focus:...Mercer Capital
Mercer Capital’s Asset Management Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to asset managers, trust companies, and investment consultants.
Mercer Capital's Value Matters™ | Issue 1 2018Mercer Capital
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03 27-17 march investor presentation finalAES_BigSky
The document provides an overview of The AES Corporation's 2017-2020 strategic roadmap. It discusses AES' diversified portfolio of generation and utility businesses, focus on growth in high-growth markets, and targets of 8-10% average annual growth in key metrics through 2020. AES plans to allocate $3.75 billion in discretionary cash through 2020 to maximize returns, including investments in natural gas and renewable projects. The presentation also covers AES' cost savings initiatives, debt reduction goals, and regulatory developments regarding its Dayton Power and Light subsidiary.
- Tribune Publishing has undergone a strategic transformation to organize into three business units and focus on improving profitability.
- In February 2016, Michael Ferro was named Non-Executive Chairman and a new investment was announced, positioning the company for digital growth.
- Gannett recently made an unsolicited acquisition proposal that Tribune believes undervalues the company given its transformation potential.
The document is a presentation by Tom O'Flynn, Executive Vice President & Chief Financial Officer of AES Corporation, given at the Wolfe Power & Gas Leaders Conference on September 30, 2015. It contains forward-looking statements and provides an overview of AES Corporation, including its strategic business units, growth drivers, financial metrics, capital allocation plans, and assumptions. Key points include AES operating in six strategic business units, an $7 billion construction program driving 10-15% annual free cash flow growth, expected adjusted EPS growth of 6-8% annually from 2016-2018, and a capital allocation plan prioritizing debt reduction, dividends, and share repurchases.
CS 222 01Programming Assignment 03 Chapter 0120 Points
Due:Friday, February 23, 2018
Write an Employee class that keeps data attributes for the following pieces of information:
Employee name
Employee number
Be sure to include the appropriate accessor an mutator methods.
Next, write a class named ProductionWorker that is a subclass of the Employee class. The ProductionWorker class should keep data attributes for the following information:
Shift number (an integer such as 1, 2, or 3)
Hourly pay rate
The workday is divided into two shifts: day and night. The shift attribute will hold an integer value representing the shift that the employee works. The day shift is shift 1 and the night shift is shift 2. Write the appropriate accessor and mutator methods for this class.
Once you have written the classes, write a program that creates an object of the ProductionWorker class and prompts the user to enter data for each of the object’s data attributes. Use the mutator methods to enter data into the objects. Store the data in the object and then use the object’s accessor methods to retrieve it and display it on the screen.
Add the following comments to the beginning of the program.
Name:Your Name
Class and Section:CS 222 01
Assignment:Program Assignment 03
Due Date:See above
Date Turned in:
Program Description:You write a short description of what the program will do
When you complete the program, do the following.
1. Turn in a printout of the source code
2. Create a folder with the following name: Program 03
3. Copy your program and any related files to this folder
4. Copy the folder to the following location: I:\kopp\inbox\CS 222 01\your name where your name is a folder located in I:\kopp\inbox\CS 222 01.
Extra Credit: 5 points
Add an __str__ method to each of the classes. The __str__ for the ProductionWorker class should call the __str__ of the Employee class before constructing and returning its own data. Add to the test program code to test __str__ through a print statement.
2
Are share buybacks
jeopardizing future growth?
6
A better way to understand
internal rate of return
13
Profiling the modern CFO:
A panel discussion
19
Building a better
partnership between
finance and strategy
23
How M&A practitioners
enable their success
Perspectives on Corporate Finance and Strategy
Number 56, Autumn 2015
Finance
McKinsey on
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- Nielsen reported financial results for the 1st quarter of 2018, with total revenues of $1.61 billion, a 5.5% increase year-over-year. Net income was $72 million.
- The Watch segment saw total revenue growth of 7.1% driven by strength in national TV and digital measurement. Adjusted EBITDA margin increased 12 basis points to 42.0%.
- The Buy segment had total revenue decline of 2.1% due to weakness in developed markets like the US. Adjusted EBITDA margin declined 318 basis points to 10.8% amid ongoing investments.
- Nielsen reaffirmed 2018 guidance for total revenue growth of approximately 3% in constant currency and adjusted
Running head WHOLESALE INDUSTRYWHOLESALE INDUSTRY.docxrtodd599
Running head: WHOLESALE INDUSTRYWHOLESALE INDUSTRY
2
Wholesale industry
Edwaurdo King
November 8, 2018
Dr. B. West
Strayer University
Introduction
Wholesale industry is one of the sectors that ensures that goods from the producers reach to the intended consumers either directly or through the retailers. The industry deals in a variety of consumer goods and services (college grad, 2018). The industry is responsible for the transfer of the required products from the manufacturers to the consumers without making any change in the content or outlook of the products.
Industry Goods and Services
The industry deals with goods such as agricultural products, manufactured goods, and capital goods. The wholesalers use the warehouses as their main offices as they contact their clients to inform them of the available products. The role of the industry is to gather the finished products from different sectors for ease of collection by the retailers from their warehouses. The industry reduces the distance between the producers and consumers (college grad, 2018).
Market Structure and Characteristics
The capital requirement for the industry is enormous thus limiting the number of firms and individuals who can operate in the industry. There is stiff competition in the industry caused by the desire of individual firms to increase their sales volume (Fischer, 2018). The high cost of initial capital discourages the new entrant into the market, therefore, helping in maintaining a low number of firms in the market. Other factors such as product promotion, discounts, and bonuses are used to attract customers to give a difference between the companies. The characteristic in the market shows that the industry operates in an oligopoly market structure (Fischer, 2018).
The wholesale industry lack uniformity of the firms. There are different sizes of the firm in the industry because of the various products they sell. The size of the company is determined the amount of money invested and its level of trade in the market. Other firms are enormous while others are relatively small but operate in the same market (Fischer, 2018).
Microeconomic Relationships, Market Outcomes, and/or Trends
The industry has witnessed several changes in sales volume and the employment rate. The increase in sales in the wholesale sector is as a result of their fair prices compared to the prices offered by the retail trade industry. The number of employment opportunities has been in the rise for the past four months because of the expansion of the industry and improvement regarding trade (Wholesale Trade: NAICS 42, 2018). The number of job opportunities had increased from 5.8 billion in July 2018 to 6 billion in October 2018. The industry has an increasing earning rate from 3.3% in 2014 to 4.5% in 2017. The industry continues to attract more investor because of its rate of return on the investments. (Wholesale Trade: NAICS 42, 2018). Most of the firm has invested in technology th.
The Relationship Between Firm Investment and Financial StatusSudarshan Kadariya
This document summarizes a study that examined the relationship between firm investment and financial status using a sample of 1,317 public firms between 1987-1994. The study found that:
1) Firms classified as facing fewer financial constraints (NFC) had stronger financial ratios and investment sensitivity to cash flow compared to financially constrained (FC) firms.
2) Investment levels were more sensitive to internal cash flow for NFC firms compared to partially financially constrained and FC firms.
3) The study validated prior research finding that investment decisions of more creditworthy firms are more sensitive to internal funds availability.
This document summarizes an earnings call transcript for Intermolecular Inc for Q1 2018. The key points are:
- Revenue was $9.7 million, down 8% from prior quarter due to seasonal factors and absence of $1.25 million in royalties. Program revenue was up 36% year-over-year.
- Gross margin was 65.1% GAAP and 65.7% non-GAAP, above guidance of 65%. Operating expenses were reduced 39% from prior year.
- Adjusted EBITDA was $1 million, a significant improvement from an adjusted EBITDA loss of $1.9 million in prior year.
- Guidance for Q
Here are the key legal requirements for a sole trader business like Patel Supermarket in Australia:
- Business Name Registration - The business name (e.g. Patel Supermarket) must be registered with ASIC unless it includes the owner's personal name. This helps identify the sole trader.
- Australian Business Number (ABN) - An ABN must be obtained and quoted when conducting business. It is used for tax and dealing with government.
- Insurance - Appropriate insurances like public liability, professional indemnity etc. must be taken depending on the business activities.
- Licenses and Permits - Licenses may be required from local councils for activities like selling food, medicines etc. Other
1. Analyst: Mason Gregory Martin Marietta Corp. (MLM)
Stock Valuation Report
Martin Marietta Corp. (NYSE: $MLM)
Finance 129: Student Managed Investment Fund (SMIF)
K.C. Chen, Ph.D., CFA
(Theodore F. Brix Endowed Chair in Finance)
Analyst: Mason Gregory
December 15, 2016
2. Analyst: Mason Gregory Martin Marietta Corp. (MLM)
Table of Contents
Executive Summary
I. Recommendation: Buy or Sell (At Price) or Hold 1
II. Investment Positives 1
III. Investment Risks 1
Main Stock Reports
IV. Overview of Company 2
V. Historical Performances 3
A. Historical Financial Statements 3
B. Common-sized Financial Statements 3
C. Historical: NOPLAT, Invested Capital, ROIC, and Free Cash Flow 6
VI. Computation of Intrinsic Values 11
A. Valuation Models: Which DCF and Relative Valuation Models 10
B. Assumptions 13
C. Estimation of Weighted Average Cost of Capital 16
D. Free-Cash-Flows for the next 10 Years 20
E. Computation of Continuing Values 21
1. Discussion of Various Approaches 21
F. Enterprise Values 22
G. Intrinsic Values 24
H. Comparison of Intrinsic Value and Market Value Per Share 24
VII. Conclusion 25
VIII. References 27
IX. Appendix 28
3. Analyst: Mason Gregory Martin Marietta Corp. (MLM)
1
Executive Summary
I. Recommendation: Buy/Sell (Price)? Or Hold
I would recommend holding our current position in Martin Marietta; however, I
would recommend selling our position if the stock price ever crossed the $300 per share
price.
II. Investment Positives (At Least 3)1
Martin Marietta’s Sector Strength
Given the current president-elect and recently elected Republican-majority
congress, there is strong favor for an increase in infrastructure spending. This means
large amounts of government spending on materials. Martin Marietta will be one of the
companies that benefits from the government infrastructure spending. The recently
approved FAST Act will provide $300 million into the sector
Martin Marietta’s Operating Performance
Martin Marietta has been able to compete with comparable companies within the
industry from an operational performance. For example, Martin Marietta’s operational
profitability is 17.48% of total revenues, and Martin Marietta’s profit margin is 11.03
percent. This is very competitive to Vulcan Materials margins which are 10.38% and
19.40% respectively.
Martin Marietta’s Growth
Analyzing the historical financial statements for Martin Marietta for the past five years, I
have been able to see the growth in revenues, cash flows from operating activities, and
profitability margins. Martin Marietta is getting bigger and bigger and becoming an even
more operationally efficient company.
III. Investment Risks (At Least 3)1
Speculation
1
Analyst’s Note: This section is from Value Line (2015) and recent news articles relating to
industry
2
This unstable sales growth will cause a bias when forecasting future sales growth rates. The
analyst will have to use best judgment and economic conditions to make a forecasted sales
growth rate.
3
From our financial statements, amortization and depreciation were lumped together into a single
4. Analyst: Mason Gregory Martin Marietta Corp.
2
Since the recent election, there has been a massive growth within the industry’s
stock prices. The Student Managed Investment Fund’s position in these companies has
appreciated 20.40% just since the election and this has primarily been done because of
speculation on infrastructure spending. The president-elect has voiced opinion for the
infrastructure spending but there has yet to be an official action.
Potential Downturn in the Economy
After the election there has been talk of an impending recession, this is based
around the economic policies of the president-elect and the meeting of the Federal
Reserve in December. At this meeting, Janet Yellen has given strong hints and allusions
to the first interest rate hike. There is also evidence to suggest that this first interest rate
hike will be the first of many in the upcoming year. Analysts are warning of a potential
recession.
Competition
After the election the speculation of the infrastructure play and the potential
government spending would be enough to draw in new competition and decrease the
portion received from the government per company.
IV. Overview of Martin Marietta Corporation
Martin Marietta Materials was formed in 1969 after the merger of American-
Marietta Corporation and Glen L. Martin Company (Martin Marietta, 2016). Today, this
American based materials company operates throughout twenty-six different states and
across four different countries: United States, Canada, Caribbean Islands, and the
Bahamas Islands. In 1994 Martin Marietta was listed on the New York Stock Exchange,
and today Martin Marietta is a member of the Standard and Poor’s 500-company index.
In 2015, Martin Marietta had 3.54 billion dollars in revenues and making it one of
the top companies in the raw materials industry. Martin Marietta operates through a
collection of material products such as: aggregates, ready-mixed concrete, asphalt,
cement, and cement treated materials. The prominent business and growth driver for
Martin Marietta is the increased spending in infrastructure by the United States’ federal
and state government. In 2016, the United States’ congress passed the FAST Act and
5. Analyst: Mason Gregory Martin Marietta Corp.
3
granted 305 million dollars in infrastructure rebuilding and the funding for this act is
slowly making its way down to Martin Marietta and the materials industry.
In the 3rd quarter earnings for 2016, Martin Marietta was able to report that the
aggregate section of their company had expanded by 9% and that the gross profit margin
for the company had increased by 210 basis points (Martin Marietta, “MLM Delivers
Record Q3 Performance) Looking forward for value drivers, we turn to the current
president-elect and his proposed policy of repatriating overseas money with a brief tax
holiday, short-term lowered tax rates, and using the tax income on infrastructure spending
which Martin Marietta is one of the largest suppliers in the United States.
In regards for the top competitors all vying for a piece of the infrastructure
spending there are several United States based companies: Vulcan Materials Company
(Alabama), Eagle Materials Incorporated (Texas), and USG Corporation (Illinois)
(CSIMarket.com, 2016)
V. Historical Performance
a. Historical Financial Statements
For the purpose of the valuation of Martin Marietta, I will be using the historical
financial statements for 2011 to 2015 at the company’s year-end. I have sourced the
historical financial statements from Morningstar.com, and there is the possibility of a
slight bias. This bias derives from the simplification of the financial statement’s line
items, and had I pulled financial data directly from Martin Marietta’s annual reports
might not have been simplified and condensed.
Utilizing the financial statements, I will first common-size the financial
statements, then I will focus on: Net Operating Profit Less Adjusted Taxes (NOPLAT),
Invested Capital, Return on Invested Capital (ROIC), and finally free cash flows (FCF).
Historical Balance Sheets, Income Statements and Statement of Cash Flows are attached
below and then attached as Income Statement Table 1 (pg.28), Balance Sheet Table 2
(pg. 29), Statement of Cash Flows can be found at Table 3 (pg. 30) in the Appendix.
b. Common-sized Financial Statements
Purpose
6. Analyst: Mason Gregory Martin Marietta Corp.
4
When analyzing financial statements, looking at the year over year shows the
actual dollar amount; however, there is a bias due to the varying size. To common-size a
financial document you divide all line items by a common base figure and this gives
percentages, which makes year-to-year standardized form (Investopedia, 2005)
Elimination of the bias due to size, common-sized financial statements allow for time
series analysis (year-over-year) and intra-firm comparison. For the Martin Marietta
financial statements, I decided to use yearly revenues instead of total assets as a base
figure.
Key Items
Through common-sized financial statements we are able to quickly analyze key items
that would not readily be see without being common-sized. For example, through
common sizing we are able to see different margins such as: operating, net income, and
gross profit margins. Despite the importance of these margins, the best outcome of
common-sized financial statements would be the sales growth year-over-year. The logic
behind this is that historical sales growth gives analysts and idea of what future sales
growth might be like and using the future sales the analysts can forecast the value of a
firm.
Sales Growth
The sales growth rate for Martin Marietta, as seen in Appendix Table 1 (pg. 28),
the sales growth rate for the last several years has not been stable or constant. The time-
series analysis shows the range of sales growth has been as low as 5% or as high as 37
percent.2
What this gives insight to be that under the economic conditions of 2011 to
2015, Martin Marietta did not expand as the economy did through the economic
recovery. Several explanations for this are not explained through financial statements and
can hypothesized on; for example, there is the possibility of costs of materials being very
volatile. However, this would be reflected under the common-sized cost of revenue and
2
This unstable sales growth will cause a bias when forecasting future sales growth rates. The
analyst will have to use best judgment and economic conditions to make a forecasted sales
growth rate.
7. Analyst: Mason Gregory Martin Marietta Corp.
5
for Martin Marietta the cost of revenue has been fairly stable for the past five years. The
next hypothesized reason would be the inability by management to secure revenue
contracts. This factor would not be evident through financial statement analysis.
Gross Profit Margin
Gross profit margin is merely the amount of revenue minus the cost it takes to
produce the revenue. In normal financial statements gross profit is usually negligent since
it does not represent an accurate net revenue stream. In common-sized analysis we are
able to see how well the firm is at manufacturing efficiency and reducing costs of
revenue, as well as how the firm’s management is utilizing their pricing strategies (Fiore,
2013). For firm’s the size of Martin Marietta, the gross profit margin would be affected
through sheer size and benefits of economies of scale. Historically, Martin Marietta
seems to be benefiting through some sort of efficiency increase or cost reduction because
the firm has been able to improve their gross profit margin over the last five years.
Operating Profit Margin
Operating margin is the net revenues after a firm has paid off operating expenses,
such as: wage expenses, general expenses, administrative expenses, and research and
development expenses. The operating profit margin is also the firm’s net revenue before
any taxes have been paid (Investopedia, 2005). The general consensus is a firm with a
high operating profit margin, the better off the firm will be in the long run. Operating
profit is the basis for many analysts’ valuations of firms and is important for firm
managers to be mindful of and actively trying to improve.
Martin Marietta has been improving their operating profit margin over the last
five years, as seen in Table 1.0 (pg. 28).This is incredibly beneficial for the company
considering the firm has had such a volatile growth rate in sales. The ability for Martin
Marietta to produce more profit regardless of sales helps maintain the value of the
company, even in tough years.
Net Profit Margin
8. Analyst: Mason Gregory Martin Marietta Corp.
6
The net profit margin is what is left over after a company has realized all their
expenses, tax provisions, and income from discontinuing operations. The net profit
margin is the percent of revenues that can be disbursed to creditors and shareholders. The
net profit margin as an individual percent is relevant to the yearly analysis, but as a time-
series (Year-over-year) it is beneficial for analyzing the operational management of the
company.
c. Historical: NOPLAT, Invested Capital, ROIC, and Free Cash Flows
Net Operating Profit Less Adjusted Taxes (NOPLAT)
Koller, Goedhart, and Wessels defines net operating profit less adjusted taxes,
NOPLAT from here on out, as profit from core business operations minus any non-
operational expenses and costs associated with finance (Koller). Finding NOPLAT is the
first step in finding out what a firm’s free cash flows. NOPLAT is calculated two
different methods; these are seen as top down and bottom up methods.
The bottom-down method is calculated by taking EBIT add back amortization and
this creates an adjusted EBITA. From the adjusted EBITA you minus operating cash
taxes.3
NOPLAT = (EBIT + Amortization)-Operating Cash Taxes
Operating cash taxes are all the taxes a firm must pay that are associated with
operational activities. The equation for operating cash taxes is as follows:
Op. Cash Taxes = Income Tax Provision + [Interest Expense *(1 – Tax
Rate)] – Tax on Interest Income + (Change in Deferred Taxes)
3
From our financial statements, amortization and depreciation were lumped together into a single
line item. There is no way from the historical statements to separate, so for NOPLAT calculations
we added zero for amortization.
9. Analyst: Mason Gregory Martin Marietta Corp.
7
After calculating the bottom-down method, you must check the accuracy of your
work by reconciling the net income. If your two NOPLAT calculations balance out to
zero, then you are able to use your NOPLAT. The reconciliation of the net income is the
top down approach and the equation is as follows:
NOPLAT = Net income + increase (–decrease) in net deferred taxes + after-
tax interest expense + loss (–gain) from discontinued operations – after-tax
interest received
For Martin Marietta the historical NOPLAT has been increasing dramatically over
the last four years. This can be seen in the table below as well as Table 5.0 (pg.31) in the
appendix.
(In Millions) 2015 2014 2013 2012
EBITA 480 315 218 156
OPERATING
CASH TAXES
-54.43 164.85 -1.20 -18.91
NOPLAT 425.58 479.85 216.80 137.09
Cumulative
Growth Rate
210% 250% 58% -15%
This excerpt shows the cumulative growth, and as you can see the NOPLAT had
grown significantly in 2014. This was mostly through expansion of asset base,
specifically an increase net plant, property, and equipment. The investments into the net
plant, property, and equipment not only were significant for NOPLAT, but for Martin
Marietta’s revenue streams which during the 2013-2014-year grew 37.20 percent.
Invested Capital and Return on Invested Capital
10. Analyst: Mason Gregory Martin Marietta Corp.
8
Investopedia defines invested capital as, “the total amount of money raised by a
firm through the issuance of shares and debt.” (Investopedia.com, 2005) This particular
performance is not stated on any financial statement since it is the combination of
working capital, net plant property and equipment, intangible assets and other non-
operating assets. This excludes operating revenues and leaves on money earned through
capital investments. The exact equation is as follows:
Invested Capital= Working Capital (Operating Assets-Operating Liabilities)
+ Net PPE + Intangible assets (Including Goodwill) + Other Non-Current
Assets.
For Martin Marietta the historical level of invested capital was roughly around 2.9
billion dollars; however, from 2013 to 2014 the invested capital levels nearly tripled, as
seen in Table 6.0 (pg. 32). The increased levels of invested capital came from a drastic
increase in Net Plant Property and Equipment, as well as a large jump in reported
Goodwill on the balance sheet. For every increase in one side of the balance sheet there
must be an equal and opposite reaction elsewhere. For Martin Marietta the balancing
action came from the purchase of Texas Industries and the total acquisition of all shares
outstanding.
After calculating the amount of invested capital for Martin Marietta, we are able
to use these numbers and the calculated NOPLAT, from above, to find the company’s
return on invested capital.
11. Analyst: Mason Gregory Martin Marietta Corp.
9
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!"#$%&$' !"#$%"&!!!
Koller, Goedhart andWessels (2010, p. 40) define ROIC as the return earned by
the company for every dollar invested. This measurement is an incredibly important
return since it is usually compared to the weighted average cost of capital and is an
indicator of management’s ability to generate revenue. When the ROIC of a company is
greater than the WACC then the firm creates value; alternatively, if ROIC is below the
WACC then the firm is destroying value and it is time for the firm to reevaluate.
For Martin Marietta through the calculations, historical RONIC and it was
incredibly volatile after the analysis in Table 5.0 (pg. 31). There was an upward trend
until 2014 where the RONIC doubled then dropped off below the levels before the jump.
The table below is a sample from Table 5.0 (pg. 31) in the Appendix.
MLM RONIC (Sampled from Table 5.0)
2015 2014 2013 2012
NOPLAT 425.58 479.85 216.80 137.09
I.C. (t-1) 6839 2988 2914 2902
RONIC 6.22% 16.06% 7.44% 4.72%
Based upon my calculations the firm has had significant levels of RONIC;
however, due to the level of the WACC, 8.71 percent, we can deduct that the firm in
recent years has been destroying value. This may be a short-term destruction of value and
Martin Marietta is setting them up for a long-term return. We shall see.
12. Analyst: Mason Gregory Martin Marietta Corp.
10
Free Cash Flows
Dr. K.C. Chen and Dr. Amir Jassim have defined free cash flows as the after tax
profits from operations, plus non-cash deductions, and less investments in operating
capital, capital expenditures, and other assets (Chen & Jassim, 2014). The list below
shows the steps taken to calculate the historical free cash flows for Martin Marietta in
2015 through 2012.
1. NOPLAT (Net Operating Profit Less Adjusted Taxes)
2. Depreciation (Historical)
3. Gross Cash Flow = (NOPLAT + Depreciation)
4. Investments in Operating Working Capital
5. Capital Expenditures
6. Investment into Intangible Assets
7. (Increase) or Decrease in Other Assets
8. Decrease or (Increase) in Accumulated Comprehensive Income
9. Gross Investment = (4) +(5) +(6) +(7) +(8)
10. Free Cash Flow = (3) – (9)
Historically speaking, Martin Marietta has had a significant level of growth of free
cash flows, seen in Table 8.0 (pg. 33), and less the prior year where gross investments
were significantly larger than gross cash flows. The growths in free cash flows will be
become the basis for which we base our assumptions for future cash flows and the
valuation methods.
13. Analyst: Mason Gregory Martin Marietta Corp.
11
VI. Computation of Intrinsic Values
A. Valuation Models: Which DCF and Relative Valuation Models
For the purpose of the paper and valuation, we will be using several different
methods to forecast future values necessary for valuation calculations. These include the
enterprise discounted cash flows method, EBITDA multiple method, and relative
valuation method.
Enterprise Discounted Cash Flows Method
The Enterprise discounted cash flows (EDCF) method uses project future cash
flows that are then discounted back annually to the present value at the cost of debt,
weighted average cost of capital. This method is two-fold one is based upon the
assumption of the future and the next part is the summation of all future cash flows after
the ten year forecast. The steps used to calculate the EDCF are as follows:
1. Forecast free cash flows (10 years)
1a. Find the value of operations (VO)4
𝑉𝑂 =
𝐹𝐶𝐹!
(1 + 𝑊𝐴𝐶𝐶)!
!"
!!!
+
𝐹𝐶𝐹!
(1 + 𝑊𝐴𝐶𝐶)!
+ ⋯
𝐹𝐶𝐹!"
1 + 𝑊𝐴𝐶𝐶 !"
+
𝐶𝑉!"
(1 + 𝑊𝐴𝐶𝐶)!"
2. Find the Enterprise Value (EV):
Enterprise Value equals = VO (1a.) + Non-Operating Assets
3. Value of Equity (VoE)
VoE = EV – Interest Bearing Debt
4. Intrinsic Value per share
4
Analyst’s Note: The calculation of VO includes the value of CO (continuing operations), which is
the sum of all future free cash flows after 10 years. We are assuming that the company will
continue forever, the going concern assumption.
14. Analyst: Mason Gregory Martin Marietta Corp.
12
IV = VoE/(Number of Shares Outstanding)
The actual calculations and assumptions used to forecast future cash flows based
upon this theory will be discussed later on.
EBITDA Multiple Method
The next model is used as a complement to the EDCF model and uses EBITDA to
calculate the continuing value (CV). Koller et. al (2010) state that EBITDA is more
accurate for creating an enterprise value multiple because amortization and depreciation
are non-cash expenses, which are sunk-costs of historical capital expenditures. This
valuation method is often used by outsiders to determine the price of a company and if it
is properly valued. Investopedia (Investopedia EBITDA Multiple, 2016) states that a firm
with a lower multiple may potentially be undervalued and a firm with a high multiple
may be overvalued. To calculate a potential EBITDA multiple, the equation is as follows.
𝐸𝐵𝐼𝑇! + 𝐷𝐴! = (
𝐸𝑉
𝐸𝐵𝐼𝑇𝐷𝐴
)!
Note: The EBITDA for the dividing number, is an assumption that is based upon
historical trend of EBITDA for the firm.
15. Analyst: Mason Gregory Martin Marietta Corp.
13
Relative Valuation Model
This model is useful for valuation but unlike the other two models, the relative
valuation model is not an absolute and does not use forecasted future cash flows to
determine price. The relative model in this projection was the Price-to-Earnings multiple.
𝑃𝑟𝑖𝑐𝑒 = 𝐸𝑃𝑆! +
𝑃
𝐸
Noted: The (P/E) is equal to the intrinsic value for the firm leading up to time (n)
(
𝑃
𝑒
) = 𝐼𝑛𝑡𝑟𝑖𝑛𝑠𝑖𝑐 𝑉𝑎𝑙𝑢𝑒! =
𝐷!
(1 + 𝐾𝑒)!
+
𝐷!
(1 + 𝐾𝑒)!
…
𝐷!
(1 + 𝐾𝑒)!
+
𝑃!
(1 + 𝐾𝑒)!
This relative modeling is used more often as an accuracy checker for the absolute
methods of forecasting and modeling.
B. Assumptions
For valuation models to work an analyst needs to make specific operating
assumptions in so that NOPLAT can be estimated, which is the basis for the free cash
flows. These future free cash flows are the basis of several valuation models. In
particular, there are assumptions to be made about sales growth, NOPLAT-to-sales ratio,
EBIT-to-sales, depreciation-to-sales, and capital assumptions. There were also
assumptions that needed to be made for the estimation of weighted average cost of
capital. The weighted average cost of capital assumptions will be discussed later on in
this paper.
16. Analyst: Mason Gregory Martin Marietta Corp.
14
Sales Growth (Panel B. Table 10, pg. 36)
This is the most important factor since it is where NOPLAT will be calculated from.
There are several different methods that are used to determine future sales growth:
bottom-up and top-down and hybrid growth. Bottom-up derives the sales growth from
company driven data; such as, historical sales growth. Top-down is based on the
assumption that growth is derived from macro-economic conditions. Hybrid approach
incorporates both measures into one sales growth assumption. The most commonly used
sales growth predictor is the hybrid method, since it relies on company specific data and
macro-economic assumptions. For the sales growth forecast for Martin Marietta, the data
was derived using historical sales growth, 19.70% in 2015, and the historical trend has
been very volatile. Based upon the Value Line analysis for Martin Marietta, the estimated
sales growth for 2018-2020 was set at 8 percent; however, since this report is slightly
dated I estimated the initial forecasted sales growth closer to 2015’s sales growth and
then over time I approached the Value Line forecast (Value Line, 2015).5
EBIT-to-Sales & NOPLAT-to-Sales (Panel A, Table 10, pg. 36)
NOPLAT-to-sales is derived from the EBIT-to-sales calculation and the
forecasted marginal tax rate into the future. Before the EBIT-to-sales forecast, first we
examined the forecasted marginal tax rate and we used the Value Line analysis of 38% to
remain constant into the future. However, this is slightly biased since the current
president-elect has proposed cutting the current capital tax rate down to 15 percent.
5
Analyst Note: For Martin Marietta to expand the firm acquires and merges with existing
companies. This type of growth cannot be forecasted and therefore the future cash flows and
sales growth are slightly biased.
17. Analyst: Mason Gregory Martin Marietta Corp.
15
Moving forward we examined the historical growth of the EBIT to sales via the
common-sized income statement. We can see the significant increase over the last 5 years
in EBIT/Sales. For the purpose of the valuation we are setting the initial EBIT/Sales
growth close to 2015’s 13.56 percent then gradually increasing over the next seven years.
I made the assumption that after seven years of increase that the company would begin to
plateau off.
Following the estimation of sales growth and EBIT-to-Sales, we are now able to
calculate the NOPLAT-to-Sales. Taking the forecasted sales (after growing it at the
assumed rate) we multiply by the forecasted EBIT/sales ratio to get the forecasted EBIT
amount. Using this amount, we then take EBIT and deduct the amount of income taxes,
marginal tax rate of 38% indefinitely, and have the NOPLAT for the next ten years. From
this NOPLAT, we add depreciation, subtract changes in working capital, subtract capital
expenditures, and ± change in other assets.
Depreciation-To-Sales, Working Capital-to-Sales, Capital Expenditures-to-Sales, Other
Assets-to-Sales (Panel A, Table 10.0, pg. 36)
The assumptions for the above ratio are all based upon historical trends and
averages per ratio. For depreciation we would expect that the current ratio of 7.46%
would remain roughly constant for the immediate future, but as assets age and are sold
off this number would decrease to six percent for the remaining five years. However, this
number may increase as Martin Marietta is known to grow through mergers and
acquisitions.
18. Analyst: Mason Gregory Martin Marietta Corp.
16
Working capital ratio follows similar guidelines as depreciation, and that we
believe that the current ratio shall hold for the next five years.
Capital Expenditure ratio is rather unique in that 2013 was a massive capital
expenditure, which we have analyzed throughout the report and since then the capital
expenditures have decreased significantly. For the future assumptions of this ratio I
believe the amount of capital expenditures will increase from 0.48% in 2015 to 3.3% in
2022 because the assets will age and depreciate as they will be used. For the remaining
four years I believe the capital expenditure will level off at 2% of total sales.
Other assets to sales ratio is biased in the historical trend since Martin Marietta
acquired a large portion of other assets in the merger. The firm’s common sized other
assets to sales ratio jumped from 2% to 20% and then decreased to 16% in the following
year. Due to the trend of decreasing post-merger I believe that Martin Marietta will
continue to shed other-assets from the current 16% down to a manageable and more
productive 8 percent.
C. Estimation of Weighted Average Cost of Capital
Estimation for Cost of Debt
For Martin Marietta, the company had several bonds outstanding and we used
these as the basis for the estimation of cost of debt. However, despite several different
methods, we chose to use the weighted average yield to maturity as the closest estimation
for cost of debt. Using Morningstar’s bond analysis for Martin Marietta it became evident
that some of the outstanding bonds did not have a yield to maturity. Using Martin
Marietta’s bonds that were similar sized we approximated the missing yield to maturity.
19. Analyst: Mason Gregory Martin Marietta Corp.
17
Next to calculate the weighted yield to maturity we found the weight of each of
the bonds outstanding from the total debt. Once the individual weights were calculated,
we multiplied the yield to maturity by the weights and summed up the products. This
summation gave us the cost of debt for Martin Marietta, which is 3.3237 percent. Next
for the Weighted Average Cost of Capital we needed the after tax cost of debt, and
therefore we multiplied the cost of debt by one minus the tax rate of 34.50% giving us the
after tax cost of debt of 2.12 percent.
Estimation for Cost of Equity
For the estimation of the cost of equity the method that has been taught to us in
school is to utilize the Capital Asset Pricing Model (CAPM):
𝐾! = 𝑟! + 𝛽×[𝐸 𝑟! − 𝑟!]
rf = Risk Free Rate
β = Levered Up Industry Risk
[E(rm) - rf] = Expected Market Risk Premium
From the CAPM model we needed to calculate/estimate three different variables
in order to estimate the cost of capital.
Risk Free Rate
For the risk free rate, we wanted to use the historical rate from the 10-year bond,
which we found from the United States’ Treasury website. We found the historical rate to
be 2.24% and the market, and considering we are using this rate to forecast future cash
flow we must take the likelihood of future rate changes into account (United States
20. Analyst: Mason Gregory Martin Marietta Corp.
18
Treasury, n.d.). Based upon the financial community expecting the Federal Reserve to
increase the 10-year rate by .25% per quarter. Therefore, we estimated the risk free rate
for the CAPM model to be 2.24% plus 1.00% (.25% x 4 hikes) to become 3.24 percent.
Expected Market Risk Premium
The expected market risk premium is the expected market return less the risk free rate
from before. There are various methods used to predict the market risk premium but the
most common is via surveying people. Three professors Pablo Fernandez, Alberto Ortiz,
and Isabel F. Acin created a survey of the risk free rate and market risk premium of over
40 countries. The professors then took the average of the survey answers and reported
each result divided by nationality. The professors’ survey of the 1983 people for the
United States reported an average market risk premium of 5.5 percent in 2015
(Fernandez, Ortiz, Acin p. 3, 2015). We used this 5.5% as the market risk premium for
our CAPM calculation.
Beta (Levered Up Industry Risk)
For the last variable of the CAPM we needed to calculate Martin Marietta’s beta.6
There
are several sources from which one can pull a company’s beta; however, each source is
slightly different in their calculations and no two betas are the same. For our analysis we
calculated the beta using five years of historical returns, Table 9.0 (pg.34), and then
compared this to the market returns during that time. After running the regression and
smoothing out the company beta, we compared Martin Marietta to its competitor and then
6
Earlier in the semester, per assignment, a detail analysis and paper was written out for the
Company’s beta. Therefore, I have simplified the analysis.
21. Analyst: Mason Gregory Martin Marietta Corp.
19
relevered the average between the two. This series of computations gave us a levered
industry beta of 1.27 (Table 9.1, pg. 35).
Using all these estimations and imputing them into the CAPM equation we were able to
calculate the cost of equity to be 10.23 percent. Found in Table 12 (pg. 37) Panel C.
Weights of Debt and Equity per Market Value
Before the WACC can be calculated we first needed to calculate weight of total
interest bearing debt and equity per total debt and market equity. The market value of the
equity for Martin Marietta was calculated by the share price for the close on 12/31/2015
by the total number of shares outstanding. This gave us a total market equity value of
$8.806 billion. Next we needed to calculate the total amount of interest bearing debt that
the firm had. To do this we added up the short-term debt, long-term debt, pensions and
other debt from the 2015 balance sheet. This gave us a calculated interest bearing debt
total of $1.983 billion. Using total interest bearing debt plus market value of equity we
found the weights of each equity and debt, 81.62% and 18.38% respectively. (Table 12.0,
pg. 37)
Computation of WACC (Table 12.0, pg. 37)
For several valuation methods we want to find the amount of future cash flows that
will be available to investors, and these valuation models require the future cash flows to
be discounted back at the WACC. Using the weighted average cost of capital equation,
we were taught in lessons, we were able to calculate the base WACC.
22. Analyst: Mason Gregory Martin Marietta Corp.
20
𝑊𝐴𝐶𝐶 =
𝐷
𝐷 + 𝐸
×𝑘!× 1 − 𝑇 +
𝐸
𝐷 + 𝐸
×𝑘!
Note: In this equation D= total interest bearing debt, E = market value of equity,
D+E = enterprise value, and T = marginal tax rate
After plugging in all the variable and assumptions into the WACC equation we resulted
in the WACC for Martin Marietta of 8.74 percent. 7
D. Free Cash-Flows for the next 10 Years
Based upon the operational assumptions made we are able to create a forecasted
cash flows for the next 10 years for Martin Marietta, and can be seen in the Table 11.0
(pg. 37). The analysis of the free cash flows for the next ten years show as a percent of
sales that the free cash flows have been decreasing except for a couple of years were
there were changes in other assets and capital expenditures. We understand that the
forecasted free cash flows are comparable to historical cash flows. However, historical
cash flows do not take into account significant events such as the merger and acquisition
in 2013. The last assumption that needed to be made is that the WACC cost of capital
remains constant over the next ten years. While this is not important to the calculation of
future free cash flows it is important when discounting these cash flows back to the
present value.
The above assumption is important because in order to discount the future cash
flows back to present value the free cash flow is divided by one plus the WACC raised to
7
Analyst Note: In Financial Theory WACC is supposed to be less than the ROIC, but in this case
WACC is more expensive due to the CFO’s decision to not take on debt for financing and to offer
equity (the more costly of the capital funding) instead.
23. Analyst: Mason Gregory Martin Marietta Corp.
21
the power of n. Doing this on the free cash flows for Martin Marietta gives a cumulative
present value of $5.336 billion.
E. Computation of Continuing (Terminal) Values
The continuing value or also known as the terminal values approaches yet another
assumption when using valuation models. The assumption is the going-concern of a
corporation; in theory a business has the ability to run forever since ownership is not
directly tied to a single living person. Therefore, when using valuation models one must
forecast these indefinite cash flows. These indefinite future cash flows that are so far
away that that they cannot be forecasted accurately. There are various approaches as to
which each valuation model calculates these terminal values.
1. Discussion of Various Approaches
For this project we wanted to use several different valuation methods: Enterprise
EDCF Valuation Model and EBITDA Multiple Valuation Model. Each of these models
has a different way of computing the continuing value. The continuing value is the
beginning number from which the intrinsic value is derived. The calculations for each
model can be seen in the Table 12.0 (pg. 37).
Enterprise DFC Valuation Model
The Enterprise DCF (EDFC) model calculates the terminal value using forecasted
NOPLAT and RONIC, and historical WACC and growth percentage. The forecasted
NOPLAT assumption can be found in the earlier portion of this paper. However, the
assumed RONIC used for this model is based on the analyst’s decision for the firm’s
relative strength to the market. The range that we were given to make RONIC
24. Analyst: Mason Gregory Martin Marietta Corp.
22
assumptions off of was that WACC ≤ RONIC ≤ ROIC (historical). 8
For my RONIC, I
used the WACC since this is the minimum rate that must be achieved. The following
equation is what was used to calculate the EDFC’s continuing value:
𝐶𝑉!" =
𝑁𝑂𝑃𝐿𝐴𝑇!"×(1 + 𝑔)(1 −
𝑔
𝑅𝑂𝑁𝐼𝐶!"
)
𝑊𝐴𝐶𝐶 − 𝑔
After plugging in my assumptions and forecasted values, the continuing value for
the EDCF for MLM is calculated to be $9.011 billion.
EBITDA Multiple Valuation Model
The EBITDA model uses operational profitability plus non-cash expenses as a
multiplier for calculations of value. For this model EBIT, depreciation and amortization
are all forecasted under the same assumption for the EDCF model. There fore these two
models are based upon the same assumptions up until the next point. The equation for the
continuing value under the EBITDA model gives more insight of the next assumed
variable.
𝐶𝑉!" = (𝐸𝐵𝐼𝑇!" + 𝐷𝐴!")×(
𝐸𝑉
𝐸𝐵𝐼𝑇𝐷𝐴
)!"
The confusing variable is the EV/EBITDA multiple for year ten is using the
enterprise value for the current year, which has not been calculated yet. This
EV/EBITDA multiple is assumed through historical trend analysis for the company.
Where has there EBITDA multiple been heading, down or up. After looking at the
historical trends, we analyzed that Martin Marietta’s EV/EBITDA would be decreasing
due to the rapidly increasing EBITDA. Therefore we assigned a 2022 EBITDA multiple
of 8.50 to the equation. After plugging in the assumptions and forecasted variables we
8
Analyst Note: For MLM, The WACC is greater than the historical ROIC, thus this given range of
forecasted RONIC is biased.
25. Analyst: Mason Gregory Martin Marietta Corp.
23
were able to calculate a continuing value of $8.77 billion, which is slightly smaller than
the EDCF calculated intrinsic value.
F. Enterprise Values
Having calculated the continuing value for each method, the next step would be to
calculate the enterprise value for each method. Koller et al. define enterprise as the value
of the core business operations plus non-operating assets (Koller, Goedhart, Wessels,
2015). The enterprise value for both methods connects our two sets of assumptions:
financial and operational.
EDCF
Through the prior calculations of the future cash flows and the continuing value, I
was able to calculate the enterprise value. The first thing worth noting that the firm has
no non-operating assets on their balance sheet, and we must assume that this does not
change into the future.
𝐸𝑉 = 𝑃𝑉 𝐹𝐶𝐹 + 𝐶𝑉 + 𝑁𝑜𝑛 − 𝑂𝑝. 𝐴𝑠𝑠𝑒𝑡𝑠
The final total for the EDCF enterprise value equaled $14.347 billion, and using this
number we shall then be able to find the intrinsic value for the EDCF model.
EBITDA Multiple Model
Again, through the prior calculation I was able to find the amount for each variable
to calculate the enterprise value for the EBITDA model. Using the same formula as the
EDCF, but different numbers, I calculated the EBITDA enterprise value to be $14.113
billion dollars.
26. Analyst: Mason Gregory Martin Marietta Corp.
24
G. Intrinsic Values
The calculation for intrinsic value per share is calculated the same way for both
valuation methods. The intrinsic value of company is the value of future cash flows and
continuing value less any cost of debt and this is value of the company without any
regard to the market. For our valuation models we will be using the same cost of debt
which was calculated earlier on to be $1.983 billion.
𝐼𝑉 = 𝐸𝑉 − (𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝐷𝑒𝑏𝑡)
This intrinsic value gives us the market cap of the company based on the
assumptions and calculations of the analyst.
EDCF (IV) = EV (14347) – Value of Debt (1983) = $12.364 billion
EBITDA (IV) = EV(14113) – Value of Debt (1983) = $12.130 billion
H. Comparison of Intrinsic Value and Market Value Per Share
From the intrinsic value, the value per share is able to be calculated by dividing
total intrinsic value by shares outstanding. This will give the forecasted future value of
the company based upon our analysis. From these valuation models we are able to tell
whether the current share price of the company is overvalued or undervalued.
If the firm’s intrinsic value per share is overvalued then the possibility for a large
return is diminished because fundamentally the market is overpaying for the stock based
on other factors other than actual value.
If a firm’s intrinsic value per share is undervalued then for some reason the
investors have not been buying the stock and the shares are under what the firm is
27. Analyst: Mason Gregory Martin Marietta Corp.
25
actually worth. This creates the opportunity to generate a substantial return for
shareholders.
Based upon the assumptions and calculations for the EDCF model we derived a per
share intrinsic value to be $191.75, and at this price point Martin Marietta was
undervalued by 40% in the market place. Similarly, following the assumptions and
calculations for the EBITDA, we found the per share intrinsic value for Martin Marietta
to be $188.12, and again this model put Martin Marietta’s share price of $136.58 under
the actual value. This EBITDA model forecasted the stock to be undervalued by 38%
comparably.
There is a brief test of accuracy for the valuation models, and this is by doing a
relative valuation. Relative valuation takes into account a quick expected share price
based upon multiples and earnings per share. The valuation then uses expected dividend
pay outs for the next two years and discounts them back plus the expected future price by
one plus cost of equity. This rough and tumble method gave us a per share intrinsic value
of $150.00 flat.9
VII. Conclusion
By examining all three of the valuation models we would be able to establish that
Martin Marietta’s stock price at December 31, 2015 was undervalued. Although these
models are commonly used, there is still a lot that can go wrong and lead to an incorrect
valuation. For example the models in theory are all based upon the same numbers and
should lead to the same valuation for intrinsic value. However, since there are
9
Analyst Note: This relative valuation model is the least preferred method, since it only takes
short term values into account and disregards the operational and financial assumptions for the
future.
28. Analyst: Mason Gregory Martin Marietta Corp.
26
simplifications, assumptions, and interpretations of the data the models all lead to
different values.
Ultimately, profitable investments in the very efficient market that we live in
require time and detailed analysis. These models are useful for analysts to create general
guidelines for stock prices and the value of firms.
Concluding this paper, the analyst responsible believes that the firm has upward
mobility and growth potential, even despite the uncertainty of the models and the values
they create. The current stock price is undervalued for the intrinsic value of future cash
flows, and it is recommended that we hold our current position in Martin Marietta until
the stock reaches $300 per share.10
10
Analyst’s Note: considering the valuation for Martin Marietta occurred 2011-2015, it is near the
end of 2016 and we have seen how the stock has reacted since the given time from. Currently
MLM is trading at $229.85 a share and that our valuation models were correct in assuming the
company was undervalued.
29. Analyst: Mason Gregory Martin Marietta Corp.
27
VIII.References
Chen, K. C., & Jassim, A. (2014). Pedagogical-cum-Analytical Tool for Teaching Business
Valuation. Journal of Financial Management and Analysis, 26(2),
CSIMarket. (2016). Construction Raw Materials Industry Data,. Retrieved November 2016, from
CSIMarket.com, http://csimarket.com/Industry/Industry_Data.php?ind=112
Fernandez, P., Ortiz, A., & Acin, I. (2015). Discount Rate (Risk-Free Rate and Market Risk
Premium) used for 41 countries in 2015: a survey. IESE Business School
Fiore, A. (2013) CFA Institute Industry Guides – The Machinery Industry. Charlottesville. CFA
Institute.
Investopedia.com. (2005, May 23). Common size financial statement. Retrieved 2016, from
Investopedia, http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp?lgl=no-
infinite
Koller, Tim, Marc H. Goedhart, David Wessels. Valuation:
Measuring and Managing the Value of Companies. Hoboken, NJ: John Wiley &
Sons, 2010. Print.
Martin Marietta Delivers Record Q3 Performance. (2016, November 01). Retrieved November
28, 2016, from Martin Marietta,
http://ir.martinmarietta.com/releasedetail.cfm?ReleaseID=996606
Martin Marietta (2016). Martin Marietta- About US. Retrieved November 2016, from Martin
Marietta, https://www.martinmarietta.com/about-us/company-history/
Value Line. (2016). Value Line- Martin Marietta Materials.
United States Treasury. Treasury.Gov. Retrieved November 2016, from United State’s Treasury,
https://www.treasury.gov/resource-center/data-chart-center/interest-
rates/Pages/TextView.aspx?data=yieldYear&year=2016
30. Analyst: Mason Gregory Martin Marietta Corp.
28
IX. Appendices
Table1.0MLMIncomeStatement(Common-Sized)