Rogers Sugar (RSI:TSE) Fundamental Valuation Report

Fundamental Valuation Report

Rogers Sugar(RSI:TSE)

Consumer Defensive:Confectioners

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$5.61 (CAD) 23/11/2018

Weighted Valuation
$6.10 (CAD)

Overall Rating
Undervalued by 8.8%

Valuation Models Analyst Consensus: $6.05 (CAD)
(in order of importance) Adjusted Book Value: $6.17 (CAD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (RSI:TSE CAD)

Price 5.61
Range 5.53 – 5.65
52 week 5.24 – 6.48
Open 5.56
Vol / Avg. 179998/97188
Mkt cap 580.69M
P/E 13.03
Div/yield 0.36/0.06
EPS 0.43
Shares 105.01M
Beta 0.60

Company Description

Rogers Sugar Inc is a Canada based sugar producing company. The company through its subsidiary is principally engaged in refining, packaging, and marketing of sugar products. The products offered by the company include iced tea mix, stevia, yellow sugar, hot chocolate mix, granulated sugar, brown sugar, organic sugar, icing sugar, coconut sugar, and other related sugar products. Its sales are focused on three specific segments, namely, industrial, consumer, and liquid products of which industrial segment accounts majorly of all shipments. It operates in Canada and internationally, of which majority of the revenue is generated within Canada.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for RSI:TSE

Using a discounted cash flow model we generated an intrinsic value of $9.86 (CAD) for RSI:TSE

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

RSI:TSE Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $9.86 1% 5% 1% 5%
WACC (or Ke) 6.52 $12.78 $7.92
Terminal Growth Rate 1.50 $8.09 $12.51
Tax Rate 0.27 $10.72 $9.01
Cash Flow 106,389,777 $9.16 $10.56
Capital Expenditures -15,622,000 $9.77 $9.96
Long Term Debt 178,534,000 $9.95 $9.78

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $9.49 (CAD) for RSI:TSE. We also generated a valuation of $6.16 (CAD) using other metrics and comparables.
The comparable companies were and Tootsie Roll Industries (TR:NYS).

Company RSI:TSE End Date Value
Earnings/Share $0.43 (CAD)
Book Value/Share $3.30 (CAD)
Sales/Share $6.25 (CAD)
Cash Flow/Share $0.48 (CAD)
EBITDA/Share $0.90 (CAD)
Price Based on Comps Adjustment Factor (%)
$11.38 (CAD) -41.4
$5.58 (CAD) -68.2
$24.60 (CAD) -53.2
$20.92 (CAD) -7.2
$10.35 (CAD) -27.7
RSI:TSE Ratios Used Average Values TR:NYS
14.75 PE Ratio 26.47 26.47
1.61 PB Ratio 1.69 1.69
0.85 PS Ratio 3.94 3.94
11.12 PCF Ratio 49.74 49.74
9.87 EV to EBITDA 11.54 11.54

Multiples

Using a multiples approach we generated a valuation of  $6.75 (CAD) for RSI:TSE

Company RSI:TSE End Date Value
Earnings/Share $0.43 (CAD)
Book Value/Share $3.30 (CAD)
Sales/Share $6.25 (CAD)
Cash Flow/Share $0.48 (CAD)
EBITDA/Share $0.90 (CAD)
Price Based on Comps Adjustment Factor
$7.02 (CAD) 0
$6.22 (CAD) 0
$5.72 (CAD) 0
$5.18 (CAD) 0
$9.62 (CAD) 0
Ratios Ratio Average
PE Ratio 16.32
PB Ratio 1.89
PS Ratio 0.92
PCF Ratio 10.86
EV to EBITDA 10.72

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  RSI:TSE for the last 10 years was  1.85

We ran the Adjusted Book Value for  RSI:TSE and generated a book value of  $3.33 (CAD)
By multiplying these we get an adjusted valuation of  $6.17 (CAD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for RSI:TSE. The 5 analysts have a concensus valuation for RSI:TSE for 2019 of $6.05 (CAD).

RSI:TSE Rogers Sugar

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 4 0 3.2000 Hold 2018-11-22

Current Price: 5.605 CAD

Analyst Consensus
CAD Millions 2019 2020
Mean EPS 0.46 0.49
# EPS Analysts 5 4
Mean Revenue 807.40 787.20
# Revenue Analysts 3 2
Mean Target Price 6.05
Mean Cash Flow
Mean EBITDA
Mean Net Income
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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