The net profit margin for the last 4 years has been 1.9%
I just did a quick 10 year forecast. Assuming 5% growth in sales from the 2017 annual statement and a constant 1.9% profit margin. Discounted the future sums by 3%, and divided the total by the no shares outstanding getting a $5.82 price.
This was just a quick analysis and doesn't take into account the effect of compounded returns a shareholder would enjoy if he held the stock for 10 years.
But 10 years is a long time for your investment to be paid back, especially for a stock like the reject shop which isnt exactly blue chip.
However, if TRS can maintain a 3% profit margin, then the present value of the stock based on 10 years earning is $9.19, which would make TRS about 40% undervalued. Plus with the compounded effect of dividends, it would be worth a lot more. The half yearly net profit margin was 4%, which would give it a present value of $12.25. S0 I can understand why one would buy at this price, but at the same time I can understand why many people are hitting the sell button.
I might set a buy order at 5.50
Column 1
Column 2
Column 3
Column 4
0
Growth
794,036,000
Years
1
5%
833,737,800
$15,841,018.20
1
2
5%
875,424,690
$16,633,069.11
2
3
5%
919,195,925
$17,464,722.57
3
4
5%
965,155,721
$18,337,958.69
4
5
5%
1,013,413,507
$19,254,856.63
5
6
5%
1,064,084,182
$20,217,599.46
6
7
5%
1,117,288,391
$21,228,479.43
7
8
5%
1,173,152,811
$22,289,903.40
8
9
5%
1,231,810,451
$23,404,398.57
9
10
5%
1,293,400,974
$24,574,618.50
10
11
12
NPV
$167,954,854.69
13
$5.82
TRS Price at posting:
$5.76 Sentiment: Hold Disclosure: Not Held
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