Cavalier Corporation ($CAV.NZ) is a New Zealand listed carpet company. $CAV.NZ closed toda

y at their 52-week low. How is this in relation to the intrinsic value of the company’s shares?

Valuecruncher valuation model of $CAV.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$2.35 for $CAV.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 30.6% above the current share price of NZ$1.80.

Assumptions

• Revenue: Reuters aggregates four analysts covering $CAV.NZ and the mean estimates of 2009 and 2010 revenues are NZ$297.2 million and NZ$311.3 million respectively. For our analysis we have used NZ$295.0 million in 2009, NZ$305.0 million in 2010 and NZ$315.0 million in 2011.
• Profitability: We have used an EBITDA margin of 14.0% to 2011. Reuters has $CAV.NZ‘s EBITD margin at 16.0% last year and an average of 16.3% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of NZ$10.0 million per annum moving forward.
• Discount Rate: 10.5%. The PwC New Zealand cost of capital report lists $CAV.NZ at 9.4% with the wider market at 9.5%. We have used a higher rate of 10.5%.
• Terminal Growth Rate: 1.0%. The New Zealand economy has grown at an average rate of 2.6% over the last five-years. We have $CAV.NZ growing more slowly moving forward.

Our analysis incorporates the cash and debt on the $CAV.NZ balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

At Valuecruncher we have looked at Apple ($AAPL) twice over the last six-months. In June with the $AAPL share price at US$186.10 we produced a valuation of US$146.70.

Then in September with the $AAPL share price at US$131.05 we had a valuation of US$163.98. We are now in early-December and $AAPL has continued to head south – with the market generally. $AAPL is now trading at US$94.00 – just over half the price we first looked at in June. We felt it was time to revisit the valuation of $AAPL from an intrinsic value perspective – and most importantly the assumptions that we are using. We have also completed some high-level comparator analysis looking at the current price of $AAPL against some broad peers using a range of metrics.

Valuecruncher valuation model of $AAPL with interactive assumptions

Valuecruncher produces a valuation of US$109.55 for $AAPL. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 16.5% above the current share price of US$94.00.

Assumptions

• Revenue: Reuters aggregates 29 analysts covering $AAPL and the mean estimate of 2009 revenues is US$40.6 billion. For our analysis we have used US$36.5 billion in 2009, US$43.5 billion in 2010 and US$49.0 billion in 2011.
• Profitability: We have used an EBITDA margin of 19.0% to 2011. Reuters has $AAPL‘s EBITD margin at 20.8% last year and an average of 16.8% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of US$1.15 billion per annum moving forward.
• Discount Rate: 11.0%. In our June valuation we used a discount rate of 11.0% but dropped that to 10.0% in September. We believe 11.0% is a reasonable assumption in the current market conditions.
• Terminal Growth Rate: 4.0%. In our assumptions we have 2010/11 revenue growth at 12.6% – we have assumed that growth eventually slows to a 3.0% long-term stable growth rate.

Our analysis incorporates the cash on the $AAPL balance sheet – Valuecruncher calculates a net debt number.

Comparator Analysis

Comparator analysis (sometimes called comparison company analysis) is a relative valuation approach. At Valuecruncher we have previously looked at comparator analysis. For $AAPL we looked at a range of broad peers. We calculated enterprise values – market capitalisation plus net debt (long-term borrowings less cash). Then we measured a range of metrics against the enterprise value for $AAPL and the peer set.

We have used the last financial year (LFY) as the base set of metrics. Of the peer group $EBAY and $YHOO had rough LFY performance. The other numbers are interesting. The one that stands out a mile to us however is that $AAPL is currently trading at 7.0x last years free cash flow (FCF). Remove the cash and you can have the business for 7.0x last years FCF – no growth assumed. Wow – that looks cheap.

Using our valuation of US$109.55 that gives a EV/FCF multiple of 8.7x. That is still pretty resonable compared to the peer set.

Play with our assumptions – what does your analysis say?

Disclosure: None

Mainfreight Limited ($MFT.NZ) is a global supply chain logistics provider (a freight company). At Valuecruncher we have previously looked at competitor Freightways ($FRE.NZ). $MFT.NZ is trading toward their 52-week low. How is this in relation to the intrinsic value of the company’s shares?

Valuecruncher valuation model of $MFT.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$4.33 for $MFT.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 9.8% below the current share price of NZ$4.80.

Assumptions

• Revenue: Reuters aggregates six analysts covering $MFT.NZ and the mean estimates of 2009 and 2010 revenues are NZ$1.23 billion and NZ$1.36 billion respectively. For our analysis we have used NZ$1.20 billion in 2009, NZ$1.35 billion in 2010 and NZ$1.45 billion in 2011.
• Profitability: We have used an EBITDA margin of 6.5% in 2009 and 2010 rising to 7.0% in 2011. Reuters has $MFT.NZ‘s EBITD margin at 7.0% last year and an average of 6.6% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of NZ$35.0 million in 2009 then NZ$30.0 million per annum moving forward.
• Discount Rate: 11.0%. The PwC New Zealand cost of capital report lists $MFT.NZ at 12.6% with the wider market at 9.5%. We believe a discount rate in the 10-12% range is appropriate. We have chosen the middle of this range.
• Terminal Growth Rate: 3.0%. The New Zealand economy has grown at an average rate of 2.6% over the last five-years.

Our analysis incorporates the cash and debt on the $MFT.NZ balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

Hallenstein Glasson Holdings ($HLG.NZ) is a NZX-listed retailer of mens and womans clothing. $HLG.NZ is trading just above their 52-week low. How is this in relation to the intrinsic value of the company’s shares?

Valuecruncher valuation model of $HLG.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$2.51 for $HLG.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 11.6% above the current share price of NZ$2.25.

Assumptions

• Revenue: Reuters aggregates six analysts covering $HLG.NZ and the mean estimate of 2009 revenues are NZ$201.6 million. For our analysis we have used NZ$180.0 million in 2009, NZ$185.0 million in 2010 and NZ$200.0 million in 2011.
• Profitability: We have used an EBITDA margin of 11.0% in 2009 rising to 12.0% in 2011. Reuters has $HLG.NZ‘s EBITD margin at 14.3% last year and an average of 16.6% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of NZ$8.0 million per annum moving forward.
• Discount Rate: 10.0%. The PwC New Zealand cost of capital report lists $HLG.NZ at 10.1% with the wider market at 9.5%. We believe a discount rate in the 9-11% range is appropriate.
• Terminal Growth Rate: 2.0%. The New Zealand economy has grown at an average rate of 2.6% over the last five-years. We see $HLG.NZ growing slightly below this level moving forward.

Our analysis incorporates the cash on the $HLG.NZ balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say? We think the assumptions underlying our analysis are pretty conservative.

Disclosure: None