Geoff Gannon June 23, 2012

Blind Stock Valuation #3

A company Quan has talked about a lot lately – DreamWorks Animation (DWA) – has a movie out called Madagascar 3: Europe’s Most Wanted. I’ve also chosen Europe as the setting for the third installment of my little series.

One of my favorite blogs, Distressed Debt Investing, recently mentioned the idea of blind stock valuations. I’ve posted two of these practice exercises in the past.

They turned out to be – spoilers ahead – Waltington Waterworks and Wal-Mart circa 1981.

I employed a little trickery in both cases. I figured no one reading the blog would know Watlington Waterworks (it only serves the island of Bermuda). And I figured most people would not recognize Wal-Mart’s record from the 1970s as long as I renumbered the years so it looked like the company achieved that growth record in the 2000s.

I haven’t done anything sneaky this time. The numbers shown here have not been tampered with. I have changed no dates. I haven’t multiplied the numbers by ten, divided by ten, etc. Click the table to make it bigger:

This company uses debt. So, I’m not looking for a per share intrinsic value estimate here.

Just tell me what you think the enterprise value is. Or – if you’re feeling particularly adventurous – try to guess both the market cap and the amount of debt.

While this isn’t a blue chip name – especially for American investors – it is a stock some people reading the blog know. I’ve even mentioned this stock’s name in the past.

So some of you can easily identify the stock if you want to. Resist the urge. And try your best to value the stock blind.

I’ll tell everybody the stock’s name next week.

That’s also when I’ll share a few of my favorite emails attempting to value the stock.