Blind Stock Valuation #2: What Would You Pay for This Stock?

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Geoff Gannon
May 16, 2012
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Since I wrote my original blind stock valuation over at my old blog, Ive gotten a lot of requests to do another one. I think its a helpful exercise. So I will.


For those who dont know, a blind stock valuation is when I blind you to the name of a stock. But I give you most of the important financial numbers. Based on the numbers, you try to value the stock.


Now, with the original blind stock valuation, I tried unsuccessfully it turned out to use a stock literally no one could recognize. I picked a water company on the island of Bermuda. Unfortunately, through the power of Google someone was able to recognize the stock. But it took a lot of work. And most people were truly analyzing the stock blind.


Today, I think Ive improved my identification countermeasures. But its still a real company. And its still possible you can recognize it. I hope youll resist the urge to try. And instead analyze this company without any idea what its name is.


Its good practice.


Like last time, Ive changed a single identifying detail that would bias you.


(Translation: I'm lying about one thing. And only one thing.)


When youve decided what the stock is worth, send your intrinsic value estimate along with an explanation of how you calculated it to:


[email protected]


Ill post the best intrinsic value estimates. And explain why I liked them.


And now the stock youll be valuing blind:


Sales Gross Profit EBITDA EBIT
2001 $44,286,012 $11,460,244 $3,633,007 $3,365,477
2002 $78,014,164 $19,422,785 $6,443,458 $5,983,911
2003 $124,889,141 $31,798,906 $10,302,090 $9,509,399
2004 $167,560,892 $44,222,274 $13,964,474 $12,828,608
2005 $236,209,000 $59,618,000 $15,527,000 $14,008,000
2006 $340,331,000 $88,858,000 $26,666,000 $24,556,000
2007 $478,807,000 $126,138,000 $36,995,000 $33,724,000
2008 $678,456,000 $174,631,000 $49,530,000 $44,459,000
2009 $900,298,000 $239,236,000 $69,295,000 $59,891,000
2010 $1,248,176,000 $328,871,000 $91,752,000 $78,726,000
2011 $1,643,199,000 $435,397,000 $123,063,000 $105,087,000


Thats the income statement information you need.


Heres the balance sheet:


Receivables Inventory PP&E Accounts Payable Accrued Expenses
2001 $212,532 $10,654,640 $3,079,607 $3,760,511 $874,688
2002 $434,554 $18,452,663 $7,079,703 $6,807,512 $1,541,421
2003 $1,114,203 $29,427,119 $13,233,161 $8,000,282 $2,378,301
2004 $1,211,168 $41,470,471 $14,656,507 $13,275,531 $3,037,111
2005 $1,407,000 $50,582,000 $19,157,000 $14,090,000 $4,163,000
2006 $2,576,000 $64,371,000 $23,646,000 $17,750,000 $6,560,000
2007 $2,708,000 $88,815,000 $29,169,000 $28,054,000 $8,338,000
2008 $5,449,000 $135,845,000 $44,467,000 $45,427,000 $13,868,000
2009 $5,398,000 $172,640,000 $62,763,000 $65,001,000 $19,411,000
2010 $7,806,000 $235,315,000 $98,760,000 $100,102,000 $34,656,000
2011 $12,666,000 $280,021,000 $116,781,000 $97,445,000 $46,604,000


The company has 32,324,445 shares outstanding.


Do you need anything else?


I dont think so.


Assume the company has no debt. It pays normal taxes. Its a U.S. company. And its financed entirely with common stock.


How much would you pay per share?


Email your best guess to: [email protected]


Or post your intrinsic value estimate on my GuruFocus message board.


Or you can Tweet your best guess. But at 140 characters, itll have to be a concise analysis.


At the start of June, Ill write an article collecting everybodys intrinsic value estimates and discussing the best analysis I got.


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