Category Archives: Valuation

Bio-Reference Laboratories Analysis & Valuation

BRLI logoBio-Reference Laboratories (BRLI) was ranked tier 1 in a recent stock screen for companies that exhibited steady, predictable, growth with little debt. As part of the value investing workflow we developed in an earlier article, a detailed analysis must now be conducted, followed by a determination of BRLI’s intrinsic value.

Bio-Reference Laboratories is a company which provides clinical testing services to customers primarily in the Northeastern United States. The customer base includes physician offices, clinics, hospitals, employers and the government, and it is the fourth-largest testing services provider in the country. In addition to standard tests, Bio-Reference Laboratories has great expertise in cancer pathology through its GenPath unit. Also of note is the GeneDx genetics laboratory, which is a leading provider in the diagnosis of rare genetic diseases. Continue reading

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Determining the Intrinsic Value of a Stock using EPS Growth Capitalization

Determining the Intrinsic Value of a Stock using EPS Growth CapitalizationValue investors are concerned with determining what’s called the intrinsic value of the companies they wish to invest in. This intrinsic value nearly always differs from the actual trading price of the stock, presenting us with opportunities to buy for less than the company is really worth! See my recent article, “What is the difference between price and value?” for more on this topic. Today we’ll look at one of the popular methods of calculating intrinsic value using an estimated EPS growth rate and future PE ratio. This is called the EPS Growth Capitalization method and is detailed below. Continue reading

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Rue21, Inc. Analysis and Valuation

Rue21, Inc. Analysis and ValuationRue21, Inc. (RUE) was one of the stocks ranked tier 1 in a recent stock screen. The screen attempted to identify stocks that would exhibit predictable growth and that carry little to no debt. Rue21 satisfied all of the identified criteria and now we are tasked with investigating the company further in an attempt to identify any red flags that would preclude our inclusion of this company in a value investment portfolio. These are all steps of the value investing workflow we developed in an earlier article.

Rue21, Inc. is a clothing retailer targeted at teens, with stores across most of the United States. Stores are located primarily in small towns where there is less competition, yet the company offers very fashionable clothing items and changes themes frequently to keep “fresh”. We will now examine the company in detail and seek to determine an intrinsic value, margin of safety, and target entry price range. Continue reading

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