I just wanted to share my analysis on Gardner Denver, before the earnings
release. It’s a stock I recently picked up, to add fluid transfer exposure to
my portfolio.
Trailing 12 months eps = $3.60, current stock price is $56.60. Analyst
Estimates for this quarter says $0.92 - $0.94 - $1.03. Next quarter, it’s
$0.90, and for the year, it’s $3.81 per share, next year it’s $4.21.
Conservatively speaking:
Growth at 9% for the next 5 years, and only 3.5% after, discounting cash
flows at 12% means the stock is worth $54.87, today.
Speaking more bullishly:
growth at 10% for next 5 years, 5% after that, discounting cash flows at 12%
means the stock is worth $66.41.
Now, I have my own year by year analysis on what I think will happen to the
sector they operate in, and taking the present value of the next 32 years worth
of earnings, discounted at my own MARR which is 18%, the stock
is worth $53.21 today.
There has been allot of pumping, and upping of estimates in the last 3
months, so I would expect traders to want to take profit on any reason to sell.
However, by my DCF analysis, the downside if they hit the number, is
non-existent - so long as the company is firing on all cylinders.
Long GDI.
