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 |
| 1 |
Growth |
794,036,000 |
|
Years |
| 2 |
5% |
833,737,800 |
$15,841,018.20 |
1 |
| 3 |
5% |
875,424,690 |
$16,633,069.11 |
2 |
| 4 |
5% |
919,195,925 |
$17,464,722.57 |
3 |
| 5 |
5% |
965,155,721 |
$18,337,958.69 |
4 |
| 6 |
5% |
1,013,413,507 |
$19,254,856.63 |
5 |
| 7 |
5% |
1,064,084,182 |
$20,217,599.46 |
6 |
| 8 |
5% |
1,117,288,391 |
$21,228,479.43 |
7 |
| 9 |
5% |
1,173,152,811 |
$22,289,903.40 |
8 |
| 10 |
5% |
1,231,810,451 |
$23,404,398.57 |
9 |
| 11 |
5% |
1,293,400,974 |
$24,574,618.50 |
10 |
| 12 |
|
|
|
|
| 13 |
|
|
NPV |
$167,954,854.69 |
| 14 |
|
|
|
$5.82 |
