B&G Foods Inc. should satisfy the Enterprising Investor, but not the Defensive Investor. The Defensive Investor is concerned with the low market capitalization, short dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned by the level of debt relative to the net current assets. Therefore, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.
From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $0.49 in 2010 to $0.94 for 2014. This level of demonstrated growth is in line with the market’s implied estimate for earnings growth of 10.77% over the next 7-10 years. The ModernGraham valuation model, therefore, returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating the company is fairly valued at the present time.
Be sure to check out previous ModernGraham valuations ofÂ B&G Foods Inc. (BGS)Â for a greater perspective!
Disclaimer: The author did not hold a position in B&G Foods Inc. (BGS)Â at the time of publication and had no intention of changing that position within the next 72 hours. Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.