My WND Valuation on a Napkin
Here's my valuation of WND written on a piece of napkin...
Windstar Construction Cost = $275M
Kingman Construction Cost = $24M
Total Construction Costs = $299M
Total Construction Loan = $299M
Cash Grant = 30% of Construction Expenses = 90M
Total Long Term Debt = $209M ($193M for Windstar, $16M for Kingman)
Windstar EBITDA = $30M/year
Kingman EBITDA = $2.5M/year
Long Term Interest Charges and Commitments using blended rate of 7% over 21 years for 209M = ~$14.5M
EBIT = $32.5M - $14.5M = $18M
Net Income (40% corporate tax rate) = $10.8M/year
Earnings/share = $10.8M/55M shares =
.19/share
Current Book Value (Mesa + Windridge) =
.59
Current earnings/share = -
.09/share
Historical Capital Expenditures for Capture of Land and Development Expenses (Sunk Cost from Shareholders Equity) = $26M / 55M shares = $-0.47/share
Adjusted Earnings/Share (Assuming no more capital expenditures from equity) =
.38/share
Estimated Asset/Equipment/Land Value of Windstar and Kingman = $325M
On a per share basis with no debt = $5.91/sh
On a per share basis 100% debt financed =
.47/sh
Incremental increase in share price as debt paid down per year =
.26/share/year
So, by the end of 2011, our share price should look something like:
.59 (current book value) +
.85 (forward earnings/sh) +
.47/sh (asset value in year 0) +
.38 (earnings/sh today) = $2.29/sh
Does not take into any consideration of any tax depreciation or credits or the effects of the buyback.