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GuruFocus has detected 7 Warning Signs with The Scotts Miracle Gro Co $SMG.
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The Scotts Miracle Gro Co (NYSE:SMG)
Intrinsic Value: Projected FCF
USD 23.69 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, The Scotts Miracle Gro Co's projected FCF intrinsic value is USD 23.69. The stock price of The Scotts Miracle Gro Co is USD 96.60. Therefore, The Scotts Miracle Gro Co's Price to Intrinsic Value: Projected FCF Ratio of today is 4.1.

SMG' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.54   Max: 184.33
Current: 4.08

0.54
184.33

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of The Scotts Miracle Gro Co was 184.33. The lowest was 0.54. And the median was 1.63.

SMG's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than
73% of the 77 Companies
in the Global Agricultural Inputs industry.

( Industry Median: 1.50 vs. SMG: 4.08 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here The Scotts Miracle Gro Co's FCF(6 year avg) is calculate as

The Scotts Miracle Gro Co Quarterly Data

201409201412201503201506201509201512201603201606201609201612
total_freecashflow 188-282-395660-98-355-298588244-226
201203201206201209201212201303201306201309201312201403201406
total_freecashflow -4297228-194-386680182-224-444633
201103201106201109201112
total_freecashflow -451582116-218

Add all the Free Cash Flow together and divide 6 will get The Scotts Miracle Gro Co's FCF(6 year avg) = USD 100.80.

The Scotts Miracle Gro Co's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Dec16)*0.8)/Shares Outstanding
=(9.52035159596*100.8+579.8*0.8)/60.100
=23.69

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

The Scotts Miracle Gro Co's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=96.60/23.6853817117
=4.08

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

The Scotts Miracle Gro Co Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Projected FCF 34.7935.4935.9434.3028.5729.9433.3531.6224.9825.43

The Scotts Miracle Gro Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Projected FCF 31.6228.5830.9933.6324.9819.7825.6123.1325.4323.69
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