OSV Stock Valuation Sample vBC2

8/13/2019 OSV Stock Valuation Sample vBC2

1/18

Pfizer Inc.(PFE)

Figures in Millions except per sha

Company Overview

ValuationCurrent Price 28.28$ Margin of Safety

NCAV(5.69)$

Total Net Reprod. Cost 17.96$

Earnings Power Value (EPV) 23.01$

Discounted Cash Flow (DCF) 31.30$

Katsenelson Absolute PE 51.52$

Ben Graham Formula 44.65$

Key Statistics Company StatsMkt Cap ($M) 200,596.27$ Shares Outstanding 7093.2

52 Wk High 31.15$ Shares Float 7089.652 Wk Low 21.40$ Insider Ownership 0.05%% off 52Wk Low 32.2% Insider Transactions 8.2%

Institutional Ownersh 73.8%

Cash Flows Float Short 0.9%

Free Cash Flow Short Ratio 1.8

5 yr FCF Growth 4.0% Piotroski (TTM) 6 10 yr FCF Growth 3.6% Altman (MRQ) 2.0 Fundamental Ratios 2011 2012

Beneish (TTM) -2.9 P/E 13.76 13.41

Effectiveness P/E (cash adjusted) 11.47 11.12CROIC Margins & Profitability EV/EBITDA 6.37 7.69 Avg 12.6% Gross EV/Free Cash Flow 9.33 12.51

FCF/S Gross Margin 0.0% P/S 2.38 3.25

Avg 27.6% Operating P/BV 1.95 2.36

ROA Operating Margin 23.6% P/Tang BV 5.66 5.44

Avg 6.2% Net Profit P/CF 6.81 6.95

ROE Net Margin 18.3% P/FCF 8.65 12.18

Avg 14.4% ROE 14.2% 17.6%

Financial Strength (MRQ) ROA 6.2% 7.7%

c ency Current Ratio(MRQ) 2.4 ROIC 9.3% 11.4%Receivables Turnover (TTM) 2.6 Quick Ratio(MRQ) 2.1 CROIC 14.0% 12.6%Inventory Turnover (TTM) 1.6 LTD/Eq(MRQ) 0.4 Current Ratio 2.06 2.15Days Sales Outstanding (TTM) 141.8 Tot D/Eq(MRQ) 0.5 Total Debt/Equity Ratio 0.47 0.46

Inventory Turnover 1.87 1.53

Pfizer Inc., a biopharmaceutical company, discovers, develops, manufactures, and sellsmedicines for people and animals worldwide. Its Primary Care segment offers humanprescription pharmaceutical products primarily prescribed by primary-care physicians forAlzheimers disease, cardiovascular, erectile dysfunction, genitourinary, majordepressive disorder, pain, respiratory, and smoking cessation therapeutic and diseaseareas. The company's Specialty Care and Oncology segment provides humanprescription pharmaceutical products primarily prescribed by physicians for therapeuticand disease areas, such as anti-infectives, endocrine disorders, hemophilia,inflammation, ophthalmology, pulmonary arterial hypertension, specialty neuroscience,and vaccines. This segment also offers human prescription pharmaceutical productsaddressing oncology and oncology-related illnesses. Its Established Products andEmerging Markets segment offers human prescription pharmaceutical products thathave lost patent protection or marketing exclusivity in certain countries and/or regions,

Decembe

Selected Financial Statements

0

1

2

3

4

5Low Risk

High G

Unde

Well Managed

Good Financials

Strong Moat

-100.0%

-57.5%

-22.9%

9.6%

45.1%

36.7%

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

Jun-02 Jun-04 Jun-06 Jun-08 Jun-10

Price vs DCF Intrinsic Value

Stock Price Intrinsic Value

(In Millions, Except per Share Amounts) 2008 2009 2010 2011 2012 T

Revenue 48,296$ 50,009$ 67,809$ 67,425$ 58,986$ $

Gross Profit 40,184$ 41,121$ 51,530$ 52,340$ 47,652$ $Margin % 83.20% 82.23% 75.99% 77.63% 80.79%

R&D 7,945$ 7,913$ 9,413$ 9,112$ 7,870$ $Margin % 16.45% 15.82% 13.88% 13.51% 13.34%

Operating Income 15,034$ 15,456$ 17,099$ 18,175$ 17,991$ $Margin % 31.13% 30.91% 25.22% 26.96% 30.50%

Net Income 11,477$ 12,967$ 11,512$ 11,673$ 14,288$ $

Margin % 23.76% 25.93% 16.98% 17.31% 24.22%

Earnings Per Share

Basic 1.71$ 1.85$ 1.43$ 1.49$ 1.92$ $Diluted 1.70$ 1.84$ 1.43$ 1.48$ 1.90$ $

Weighted Average Diluted Shares

Outstanding 6750.00 7045.00 8074.00 7870.00 7508.00

This is a sample for illustration purpose only.

Entering a ticker does not work.

Play with the calculations and modelsusing the current data.


2/18

Pfizer Inc.

(PFE)

2003 2004 2005 2006

Income Statement 9 8 7 6Revenue 45,188.0$ 52,516.0$ 51,298.0$ 48,371.0$ $

% change from prev year 16.2% -2.3% -5.7%

Cost of Revenues 9,832.0$ 7,541.0$ 8,525.0$ 7,640.0$ $

COGS % 21.8% 14.4% 16.6% 15.8%

Gross Profit 35,356.0$ 44,975.0$ 42,773.0$ 40,731.0$ $

Gross Income (%) 78.2% 85.6% 83.4% 84.2%

Operating Expenses

Sellin General & Admin. Ex enses 15 242.0$ 16 903.0$ 16 997.0$ 15 589.0$ $

SG&A (%) 33.7% 32.2% 33.1% 32.2%

Research & Develo ment 7 131.0$ 7 684.0$ 7 442.0$ 7 599.0$ $

R&D (%) 15.8% 14.6% 14.5% 15.7%

EBITDA 14 878.0$ 22 117.0$ 20 501.0$ 19 575.0$ $

EBITDA % 32.9% 42.1% 40.0% 40.5%

Other Special Charges -$ (702.0)$ (1,158.0)$ (320.0)$ $ De reciation & Amortization 4 078.0$ 5 093.0$ 5 576.0$ 5 293.0$ $

D&A (%) 9.0% 9.7% 10.9% 10.9%

Operating Income 10,800.0$ 17,024.0$ 14,925.0$ 14,282.0$ $

Operating Incom e (%) 23.9% 32.4% 29.1% 29.5%

Other Income and ExpenseEBIT 3,533.0$ 14,354.0$ 12,005.0$ 13,516.0$ $

Interest Expense 270.0$ 347.0$ 471.0$ 488.0$ $

Interest Income 346.0$ 346.0$ 740.0$ 925.0$ $

Other Income 1 503.0$ 50.0$ 542.0$ 787.0$ $

Total Other Income 1 157.0$ 296.0$ 1 282.0$ 1 712.0$ $

Income Before Taxes (EBT) 3,263.0$ 14,007.0$ 11,534.0$ 13,028.0$ $

Income Taxes/(Credit) 1,621.0$ 2,665.0$ 3,424.0$ 1,992.0$ $ Tax Rate % 49.7% 19.0% 29.7% 15.3%

Earnings After Taxes 1,642.0$ 11,342.0$ 8,110.0$ 11,036.0$ $

Minority Interest Expense 3.0$ 10.0$ 16.0$ 12.0$ $

Net Income From Continuing Operations 1,639.0$ 11,332.0$ 8,094.0$ 11,024.0$ $

Net Income From Discontinued Operations 2,301.0$ 29.0$ 16.0$ 8,313.0$ $

Net Income From Total Operations 7,749.0$ 14,298.0$ 12,296.0$ 13,502.0$ $

Net Income (%) 17.1% 27.2% 24.0% 27.9%

Shares and EPSTotal Basic EPS 1.07$ 1.90$ 1.67$ 1.86$ $

Fully Diluted EPS 1.06$ 1.88$ 1.66$ 1.86$ $

Dividends Paid Per Share 0.60$ 0.68$ 0.76$ 0.96$ $

Basic Shares Outstanding 7,213.0 7,531.0 7,361.0 7,242.0Diluted Shares Outstanding 7,286.0 7,614.0 7,411.0 7,274.0

User Defined Shares Outstanding

Balanc e SheetAssetsCash and Equiv 1,520.0$ 1,808.0$ 2,247.0$ 1,827.0$ $

Short-Term Investments 10 432.0$ 18 085.0$ 19 979.0$ 25 886.0$ $

Net Receivables 9 166.0$ 10 020.0$ 10 275.0$ 9 906.0$ $

% change from prev year 9.3% 2.5% -3.6%

Inventories raw materials 1 310.0$ 1 314.0$ 1 357.0$ 1 262.0$ $

Inventories, work in progress 2,219.0$ 2,496.0$ 2,379.0$ 3,198.0$ $

Inventories urchased com onents -$ -$ -$ -$ $

Inventories finished oods 2 308.0$ 2 850.0$ 2 303.0$ 1 651.0$ $

Inventories, other -$ -$ -$ -$ $

Inventories 5 837.0$ 6 660.0$ 6 039.0$ 6 111.0$ $

% change from prev year 14.1% -9.3% 1.2%

Pre aid Ex enses 2 786.0$ 2 939.0$ 3 196.0$ 3 157.0$ $

Current Deferred Income Taxes -$ -$ -$ -$ $

$ $ $ $ $

12/28/2013


3/18

Pfizer Inc.

(PFE)

2003 2004 2005 2006 2007 2008

Income StatementRevenue 100.0% 100.0% 100.0% 100.0% 100.0% 100

Cost of Revenues 21.8% 14.4% 16.6% 15.8% 23.2% 16

Gross Profit 78.2% 85.6% 83.4% 84.2% 76.8% 83

Operating Expenses

Selling, General & Admin. Expenses 33.7% 32.2% 33.1% 32.2% 32.3% 30

Research & Development 15.8% 14.6% 14.5% 15.7% 16.7% 16

EBITDA 32.9% 42.1% 40.0% 40.5% 32.1% 41

Other Special Charges 0.0% -1.3% -2.3% -0.7% 0.0% -0

Depreciation & Amortization 9.0% 9.7% 10.9% 10.9% 10.7% 10

Operating Income 23.9% 32.4% 29.1% 29.5% 21.3% 31

Other Income and Expense

Interest Expense 0.6% 0.7% 0.9% 1.0% 0.8% 1

Other Income -3.3% -0.1% 1.1% 1.6% 1.4% -5

Earnings Before Taxes 7.2% 26.7% 22.5% 26.9% 19.2% 20

Income Taxes/(Credit) 3.6% 5.1% 6.7% 4.1% 2.1% 3

Earnings After Taxes 3.6% 21.6% 15.8% 22.8% 17.0% 16

Minority Interest 0.0% 0.0% 0.0% 0.0% 0.1% 0Net Income From Continuing

Operations 3.6% 21.6% 15.8% 22.8% 17.0% 16

Net Income From Discontinued

Operations 5.1% 0.1% 0.0% 17.2% -0.1% 0

Net Income From Total Operations 17.1% 27.2% 24.0% 27.9% 22.8% 23

Balance SheetAssets

Cash & Equivalents 1.3% 1.5% 1.9% 1.6% 3.0% 1

Short-Term Investments 8.9% 14.6% 17.0% 22.5% 19.1% 19

Net Receivables 7.8% 8.1% 8.7% 8.6% 9.1% 8

Inventories 5.0% 5.4% 5.1% 5.3% 4.6% 3

Other Current Assets 0.0% 0.1% 0.1% 0.1% 0.1% 4

Total Current Assets 25.5% 32.1% 35.6% 40.9% 40.6% 38

Fixed Assets 15.7% 14.9% 14.5% 14.5% 13.6% 12Intangible Assets 50.2% 46.1% 43.9% 21.2% 17.8% 15

Other Lon -Term Assets 8.6% 7.0% 6.0% 5.3% 9.4% 14

Total Long-Term Assets 74.5% 67.9% 64.4% 59.1% 59.4% 61

Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100

Liabilities & Stockholders' Equity

Accounts payable 2.2% 2.2% 1.9% 1.8% 2.0% 1

Short-Term Debt 7.6% 9.1% 9.9% 2.1% 5.1% 8

Taxes Payable 0.0% 0.0% 0.0% 0.0% 0.0% 0

Accrued Liabilities 2.7% 1.8% 1.5% 1.7% 1.7% 1

Other Current Liabilities 7.8% 8.3% 11.0% 13.1% 10.2% 12

Total Current Liabilities 20.3% 21.4% 24.2% 18.6% 18.9% 24

Long-Term Debt 4.9% 5.9% 5.4% 4.8% 6.3% 7

Other Liabilities 7.5% 7.3% 5.9% 7.4% 11.5% 13

12/28/2013


4/18

TTM

100.0%

19.5%

80.5%

28.2%

13.2%

0.0%

-5.0%

12.4%

30.4%

2.5%

2.6%

23.6%

5.2%

18.3%

0.1%

18.3%

0.0%

25.8%

MRQ

1.1%

17.7%

11.9%

3.8%

0.0%

34.6%

7.4%

23.5%

11.1%

65.4%

100.0%

1.7%

4.7%

0.0%

0.9%

7.3%

14.7%

16.8%

12.3%


5/18

Pfizer Inc.

(PFE) Color Coding

2003 2004 2005 2006 2007 2008 200

Financial Stat ist ics & Ratios

Valuation Ratios

P/E 23.03 9.71 10.70 10.51 11.15 8.48

P/E (cash adjusted) 21.48 8.32 8.89 8.45 8.84 6.41

EV/EBITDA 12.18 6.22 6.22 6.25 7.13 4.53

EV/Free Cash Flow 19.92 10.02 10.09 7.86 9.66 5.51

P/S 3.95 2.64 2.56 2.93 2.54 2.02

P/BV 2.73 2.03 2.00 1.99 1.89 1.69

P/Tang BV 26.55 12.32 9.35 3.02 2.76 2.44

P/CF 18.00 5.96 6.88 6.64 6.73 4.76

P/FCF 19.61 10.10 10.42 9.13 10.72 5.89

ROE 11.9% 20.9% 18.7% 18.9% 17.0% 19.9% 1

ROA 6.6% 11.6% 10.5% 11.8% 9.6% 10.3%

ROIC 6.7% 17.8% 15.7% 18.4% 13.5% 20.7%

CROIC 11.2% 17.8% 18.9% 23.6% 16.9% 27.4% 1

GPA (Gross Profitability to Assets) 30.3% 36.4% 36.4% 35.5% 32.3% 36.2% 1

Book to Market 36.6% 49.2% 49.9% 50.3% 52.9% 59.1% 7

Solvency

Quick Ratio 1.01 1.25 1.26 1.91 1.90 1.43

Current Ratio 1.26 1.50 1.47 2.20 2.15 1.59

Total Debt/Equity Ratio 0.22 0.27 0.27 0.11 0.20 0.30

Long Term Debt/Equity Ratio 0.09 0.11 0.10 0.08 0.11 0.14

Short Term Debt/Equity Ratio 0.13 0.17 0.18 0.03 0.09 0.16

Efficiency Ratios

Asset Turnover 0.39 0.42 0.44 0.42 0.42 0.43

Cash % of Revenue 3.4% 3.4% 4.4% 3.8% 7.0% 4.4%

Receivables % of Revenue 20.3% 19.1% 20.0% 20.5% 21.6% 20.3% 3

SG&A % of Revenue 33.7% 32.2% 33.1% 32.2% 32.3% 30.1% 2

R&D % of Revenue 15.8% 14.6% 14.5% 15.7% 16.7% 16.5% 1

Liquidity Ratios

Days Sales Outstanding 74.0 69.6 73.1 74.7 78.9 73.9

Days Inventory Outstanding 216.7 322.4 258.6 292.0 172.2 197.1

Days Payable Outstanding 96.6 129.3 95.3 96.5 73.7 78.8

Cash Conversion Cycle 194.2 262.7 236.4 270.2 177.3 192.3

Receivables Turnover 4.93 5.47 5.06 4.79 4.75 4.77

Inventory Turnover 1.68 1.21 1.34 1.26 1.97 1.68

Average Age of Inventory (Days) 216.69 302.44 271.86 290.23 185.33 217.84 3

Intangibles % of Book Value 89.7% 83.5% 78.6% 34.1% 31.5% 30.8% 7

Inventory % of Revenue 12.9% 12.7% 11.8% 12.6% 11.0% 9.1% 2

Capital Structure Ratios

LT-Debt as % of Invested Capital 7.1% 9.4% 9.5% 8.4% 10.8% 13.2% 3

ST-Debt as % of Invested Capital 10.9% 14.6% 17.3% 3.7% 8.6% 15.4%

LT-Debt as % of Total Debt 39.5% 39.3% 35.4% 69.5% 55.7% 46.1% 9

ST-Debt as % of Total Debt 60.5% 60.7% 64.6% 30.5% 44.3% 53.9%

Total Debt % of Total Assets 12.5% 15.0% 15.3% 6.9% 11.4% 15.5% 2Working Capital % of Price 3.4% 9.5% 10.2% 18.0% 20.3% 16.5% 2

Quality Scores

Piostroski F Score 6.00 7.00 6.00 8.00 4.00 7.00

Altman Z Score (Original) 2.98 2.84 2.88 3.64 3.03 2.62

12/28/2013


6/18

Pfizer Inc.(PFE)12/28/2013

http://tinyurl.com/6p394ap

2003 2004 2005 2006 2007 2008 2009

Balance Sheet Accrual Ratio - 8.1% -4.4% -4.8% -3.6% -2.7% 66.8% -Cash Flow Accru al Ratio - 9.0% 3.2% -11.6% -4.1% 8.2% 25.3%

Sloan Accrual Ratio -7.6% 6.0% 2.2% -8.0% -2.7% 5.5% 13.0%

Earnings 1.06$ 1.88$ 1.66$ 1.86$ 1.59$ 1.70$ 1.84$ $ Stock Price 24.5$ 18.2$ 17.8$ 19.5$ 17.7$ 14.4$ 16.3$ $

Total Assets 116,775.0$ 123,684.0$ 117,565.0$ 114,837.0$ 115,268.0$ 111,148.0$ 212,949.0$ $

Cash & Equivalent 1,520.0$ 1,808.0$ 2,247.0$ 1,827.0$ 3,406.0$ 2,122.0$ 1,978.0$ $

Total Liabilities 51,398.0$ 55,406.0$ 51,938.0$ 43,479.0$ 50,258.0$ 53,592.0$ 122,935.0$ $

Short Term Debt 8,818.0$ 11,266.0$ 11,589.0$ 2,434.0$ 5,825.0$ 9,320.0$ 5,469.0$ $ Long Term Debt 5,755.0$ 7,279.0$ 6,347.0$ 5,546.0$ 7,314.0$ 7,963.0$ 52,193.0$ $

Net Operating Assets (NOA) 78,430.0$ 85,015.0$ 81,316.0$ 77,511.0$ 74,743.0$ 72,717.0$ 145,698.0$ $

Net Income 7,749.0$ 14,298.0$ 12,296.0$ 13,502.0$ 11,030.0$ 11,477.0$ 12,967.0$ $

CFO 11,739.0$ 16,340.0$ 14,733.0$ 17,594.0$ 13,353.0$ 18,238.0$ 16,587.0$ $

CFI 4,838.0$ (9,422.0)$ (5,072.0)$ 5,101.0$ 795.0$ (12,835.0)$ (31,272.0)$ $

Balance Sheet Aggregate Accrual -$ 6,585.0$ (3,699.0)$ (3,805.0)$ (2,768.0)$ (2,026.0)$ 72,981.0$ $ Cash Flow Aggregate Accrual -$ 7,380.0$ 2,635.0$ (9,193.0)$ (3,118.0)$ 6,074.0$ 27,652.0$ $

2003 2004 2005 2006 2007 2008 2009

Piotroski F Scores 6 7 6 8 4 7 4

Piotroski 1: Net Income 1 1 1 1 1 1 1Piotroski 2: Operating Cash Flo 1 1 1 1 1 1 1Piotroski 3:Return on Assets 1 1 0 1 0 1 0Piotroski 4: Quality of Earnings 1 1 1 1 1 1 1Piotroski 5: LT Debt vs Assets 1 0 1 1 0 0 0Piotroski 6: Current Ratio 1 1 0 1 0 0 1Piotroski 7: Shares Outstandin 0 0 1 1 1 1 0Piotroski 8: Gross Margin 0 1 0 1 0 1 0Piotroski 9: Asset Turnover 0 1 1 0 0 1 0

2003 2004 2005 2006 2007 2008 2009

Working Capital 6,084.0$ 13,236.0$ 13,448.0$ 25,560.0$ 25,014.0$ 16,067.0$ 24,445.0$ $

Total Assets 116,775.0$ 123,684.0$ 117,565.0$ 114,837.0$ 115,268.0$ 111,148.0$ 212,949.0$ $

Total Liabilities 51,398.0$ 55,406.0$ 51,938.0$ 43,479.0$ 50,258.0$ 53,592.0$ 122,935.0$ $

Piotroski Score

Earnings Quality Check with Accrual Analysis

http://tinyurl.com/7ucpoe2

Earnings growth due to accrual growth is not sustainable. This is like cookie jar accounting where a company borrows earnings from the future to m

Balance sheet accrual can indicate whether capital is being used properly. A company with high accruals can come from acquiring or merging with cobalance sheet accrual companies tend to shrink their balance sheet through spin offs, share repurchases or large write offs. In these situations, it is us

money to shareholders which is always a good use of capital.

High accruals indicate that the company has expanded its asset base rapidly.

Companies with high balance sheet accruals tend to have higher sales growth than low balance sheet accrual companies.

High balance sheet accruals also have a higher ROE.

Remember that maintaining a high sales growth or high ROE is difficult unless you have an entrenched moat. Such companies revert to the mean an

Companies with low balance sheet accruals tend to have below average returns on equity. Analysts expect the company to lag.

Color Coding:Green= safe zone,Yellow= ratio is getting into warning zone, Red= Danger zone. Ratios are too high or low. Requires check.

Annual

Altman Z Score

Enter Ticker Refresh CLEAR
http://tinyurl.com/6p394aphttp://tinyurl.com/7ucpoe2http://tinyurl.com/6p394aphttp://tinyurl.com/7ucpoe2http://tinyurl.com/6p394ap


7/18

2003 2004 2005 2006 2007 2008 2009

M Score - 5 Variable - -3.01 -2.92 -3.01 -2.77 -3.01 -2.22

M Score - 8 Variable - -2.70 -2.78 -2.75 -2.61 -3.06 -2.05

DSRI 0.94 1.05 1.02 1.05 0.94 1.56 0.70

GMI 0.91 1.03 0.99 1.10 0.92 1.01 1.08

AQI 0.90 0.94 0.90 1.02 1.08 1.22 0.98

SGI 1.16 0.98 0.94 1.00 1.00 1.04 1.36

DEPI 0.84 0.88 1.02 0.97 0.90 1.60 0.56

SGAI 0.95 1.03 0.97 1.00 0.93 0.99 0.97TATA -0.04 -0.06 -0.06 -0.04 -0.09 -0.04 -0.02LVGI 1.08 1.09 0.79 1.08 1.24 1.33 0.82

DSRI= Days' Sales in Receivables Index. Measured as the ratio of days' sales in receivables in year t to year t-1. A large increase in DSR could be

GMI= Gross Margin Index. Measured as the ratio of gross margin in year t-1 to gross margin in year t. Gross margin has deteriorated when this ind

likely to manipulate earnings.

AQI= Asset Quality Index. Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.AQ

SGI= Sales Growth Index. Ratio of sales in year t to sales in year t-1. Sales growth is not itself a measure of manipulation. However, growth compa

manipulate in order to keep up appearances.

DEPI= Depreciation Index. Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t. DEPI greater than 1 indic

rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

SGAI= Sales, General and Administrative expenses Index. The ratio of SGA expenses in year t relative to year t -1.

LVGI= Leverage Index. The ratio of total debt to total assets in year t relative to yeat t-1. An LVGI >1 indicates an increase in leverage

TATA- Total Accruals to Total Assets. Total accruals calculated as the change in working capital accounts other than cash less depreciation.

The Beneish M Score FormulaThe eight variables are then weighted together according to the following:

M = -4.84 + 0.92*DSRI + 0.528*GMI + 0.404*AQI + 0.892*SGI + 0.115*DEPI - 0.172*SGAI + 4.679*TATA - 0.327*LVGI

A score greater than -2.22 indicates a strong likelihood of a f irm being a manipulator. In his out of sample tests, Beneish found that he could correcidentifying 17.5% of non-manipulators.

The 5 Variable Version of the Beneish ModelThe five variable version excludes SGAI, DEPI and LEVI which were not significant in the original Beneish model.

M = -6.065 + 0.823*DSRI + 0.906*GMI + 0.593*AQI + 0.717*SGI + 0.107*DEPI

A score greater than -2.22 indicates a strong likelihood of a f irm being a manipulator.


8/18

Edit


9/18


10/18

Pfizer Inc.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TT$9,098.0 ####### ####### ####### ####### ####### ####### $9,941.0 ####### ####### ####

% Change 51.0% -8.1% 23.1% -26.2% 44.1% -7.0% -35.4% 86.9% -15.4% -3.1

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TT$24.5 $18.2 $17.8 $19.5 $17.7 $14.4 $16.3 $16.7 $20.4 $25.5 $29

% Change -25.6% -2.6% 9.9% -9.1% -18.6% 12.9% 2.3% 22.6% 25.0% 13.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TT20.1% 26.2% 24.6% 32.1% 23.7% 34.2% 30.8% 14.7% 27.6% 26.7% 26.

% Change 29.9% -5.9% 30.6% -26.3% 44.5% -10.2% -52.3% 88.0% -3.2% -0.7

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TT11.2% 17.8% 18.9% 23.6% 16.9% 27.4% 10.3% 7.2% 14.0% 12.6% 12.

% Change 58.5% 6.3% 25.3% -28.6% 62.2% -62.5% -30.1% 94.2% -9.4% -3.1

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TT8.2% 16.1% 16.1% 16.0% 14.0% 22.1% 13.8% 16.9% 15.7% 13.0% 0.0

% Change 95 8% 0 1% -0 5% -12 5% 57 5% -37 7% 23 2% -7 4% -17 1% -100

Magic Formula Invest ing -- Earn ings Yield

Cash Return on Invested Capital (CROIC)

(PFE)12/28/2013

FCF / Sales

Free Cash Flow

Stock Price

Enter Ticker Refresh


11/18

Pfizer Inc.(PFE)

PFE

2 Company Pfizer Inc.3 Sector Healthcare

4Industry

Drug

Manufacturers -

Major5 Country USA

68 Earnings Date 30-Apr-2013

65 Price $28.286 Market Cap $200,596.27

66 Change -2.52%67 Volume 48,860,15660 Change from Open -2.01%61 Gap -0.52%55 50-Day High -8.45%56 50-Day Low 2.79%57 52-Week High -8.45%58 52-Week Low 36.90%

7 P/E 20.068 Forward P/E 12.039 PEG 8.36

10 P/S 3.4811 P/B 2.4412 P/Cash 5.6813 P/Free Cash Flow 23.2514 Dividend Yield 3.39%15 Payout Ratio 62.47%

16 EPS (ttm) $1.4117 EPS growth this year 19.06%18 EPS growth next year 6.33%19 EPS growth past 5 years 1.33%20 EPS growth next 5 years 2.40%21 Sales growth past 5 years 4.03%22 EPS growth quarter over quarter 66.87%23 Sales growth quarter over quarter -9.30%

32 Return on Assets 5.66%33 Return on Equity 12.71%34 Return on Investment 6.65%

35 Current Ratio 2.3536 Quick Ratio 2.1037 LT Debt/Equity 0.3838 Total Debt/Equity 0.49

39 Gross Margin 0.00%40 Operating Margin 23.55%41 Profit Margin 18.32%

24 Shares Outstanding 7,093.2225 Shares Float 7,089.6226 Insider Ownership 0.05%27 Insider Transactions 8.24%28 Institutional Ownership 73.78%29 Institutional Transactions -2.17%30 Float Short 0.89%31 Short Ratio 1.8

42 Performance (Week) -1.74%43 Performance (Month) -6.30%44 Performance (Quarter) 4.05%45 Performance (Half Year) 17.44%46 Performance (Year) 32.27%46 Performance (Year) 32.27%48 Beta 0 75

Enter Competitor Tickers

12/28/2013

Enter Ticker CLEARUpdate


12/18

Pfizer Inc. Shares Out. M.O.S Growth Discount % Terminal % Select FC(PFE) 7093.223 7,093.22 6.0% 9.0%12/28/2013 Select input with

each list or enter 6.0%

Current Price Fair Value Buy Under Actual M.O.S 52 Wk High 52 Wk Lo

$28.28 $31.30 $15.65 10% $31.15 $21.40

Fiscal Year Trend 2003 2004 2005 2006 2007 2008 2009Cash Flow DataCash from Operations $11,739.0 $16,340.0 $14,733.0 $17,594.0 $13,353.0 $18,238.0 $16,58

Capex ($2,641.0) ($2,601.0) ($2,106.0) ($2,050.0) ($1,880.0) ($1,701.0) ($1,20Cash Flow $9,914.4 $23,307.5 $19,107.1 $21,352.0 $18,278.8 $20,455.5 $19,36

Free Cash Flow $9,098.0 $13,739.0 $12,627.0 $15,544.0 $11,473.0 $16,537.0 $15,38

YOY% Change 51.0% -8.1% 23.1% -26.2% 44.1% -7

MarginsGross Margin 78.2% 85.6% 83.4% 84.2% 76.8% 83.2% 82Operating Margin 23.9% 32.4% 29.1% 29.5% 21.3% 31.1% 30Net Margin 17.1% 27.2% 24.0% 27.9% 22.8% 23.8% 25

EPS & TaxDiluted EPS $1.06 $1.88 $1.66 $1.86 $1.59 $1.70 $

Tax Rate 49.7% 19.0% 29.7% 15.3% 11.0% 17.0% 20

Efficiency & ProfitabilityCROIC 11.2% 17.8% 18.9% 23.6% 16.9% 27.4% 10FCF/Sales 20.1% 26.2% 24.6% 32.1% 23.7% 34.2% 30Inventory Turnover 1.7 1.2 1.3 1.3 2.0 1.7

Return On Assets (ROA) 6.6% 11.6% 10.5% 11.8% 9.6% 10.3% 6Retun On Equity (ROE) 11.9% 20.9% 18.7% 18.9% 17.0% 19.9% 14

Debt RelatedDebt to Equity 78.6% 81.1% 79.1% 60.9% 77.3% 93.1% 136Capitalization Ratio 8.1% 9.6% 8.8% 7.2% 10.1% 12.2% 36FCF to Total Debt 0.6 0.7 0.7 1.9 0.9 1.0FCF to Short Term Debt 1.0 1.2 1.1 6.4 2.0 1.8

FCF to Long Term Debt 1.6 1.9 2.0 2.8 1.6 2.1

2007-2011 2008-2012 2007-2010 2008-2011 2009-2012 2007-2009 2008-2010 2009-201

Tang Shareholder Equity -10.7% -3.0% -12.1% -10.7% 17.0% -29.7% -12.9% 13Free Cash Flow 12.8% -1.2% -4.7% 4.0% 0.7% 15.8% -22.5% 9CROIC 14.0% 12.6% 13.6% 12.1% 11.5% 16.9% 10.3% 10FCF/Sales 27.6% 27.6% 27.2% 29.2% 27.1% 30.8% 30.8% 27ROA 6.2% 6.2% 7.8% 6.1% 6.1% 9.6% 6.1% 6ROE 14.4% 14.4% 15.7% 14.3% 14.3% 17.0% 14.4% 14

Gross Margin 77.6% 80.8% 79.5% 79.9% 79.2% 82.2% 82.2% 77Operating Margin 27.0% 30.5% 28.1% 28.9% 28.7% 30.9% 30.9% 27Net Margin 22.8% 23.8% 23.3% 20.5% 20.8% 23.8% 23.8% 17Revenue Growth 8.6% 5.1% 11.9% 11.8% 5.7% 1.6% 18.5% 16Earnings Growth -1.7% 2.9% -3.6% -4.5% 1.1% 7.6% -8.4% -10

Cash from Ops Growth 11.0% -1.7% -5.0% 3.5% 0.9% 11.5% -20.8% 10

10 Year Multi-Year Performance2003-2010 2004-2011 2005-2012 2003-2008 2004-2009 2005-2010 2006-2011 2007-201

Tang Shareholder Equity 24.0% 14.1% 14.0% 42.7% 14.3% 16.6% -9.6% -4Free Cash Flow 1.3% 4.4% 3.2% 12.7% 2.3% -4.7% 3.6% 6CROIC 17.3% 17.3% 15.4% 18.3% 18.3% 17.9% 15.4% 13FCF/Sales 25.4% 26.9% 27.1% 25.4% 28.5% 27.7% 29.2% 27ROA 9.9% 9.9% 8.6% 10.4% 10.4% 9.9% 7.9% 6ROE 17.9% 17.9% 17.3% 18.8% 18.8% 17.9% 15.7% 15Gross Margin 82.7% 82.7% 81.5% 83.3% 83.3% 82.7% 79.9% 79

Operating Margin 29.3% 29.3% 29.3% 29.3% 30.2% 29.3% 28.2% 28Net Margin 23.9% 23.9% 23.9% 23.9% 24.9% 23.9% 23.3% 23Revenue Growth 6.0% 3.6% 2.0% 1.3% -1.0% 5.7% 6.9% 4Earnings Growth 4.3% -3.3% 2.0% 9.8% -0.4% -3.0% -4.4% 3

Cash from Ops Growth -0.4% 3.1% 2.1% 9.2% 0.3% -4.9% 2.8% 5

Projection of future Free Cash Flow2013 2014 2015 2016 2017 2018 2019 2020

Yearly Growth Input Field6% $16,670.62 $17,670.86 $18,731.11 $19,742.59 $20,808.69 $21,932.36 $23,116.70 $24,240

Terminal Growth 2023 2024 2025 2026 2027 2028 2029 2030

2%50% FCF

5 Year Multi-Year Performance

Enter Ticker CLEARRefresh


13/18

Shares Out. M.O.S Growth Projection EPS Corp Bond

(PFE) 7093.223 9.0% $2.22 3.50

12/28/2013 9.0%

Current Price Intrinsic $ Buy Under Actual M.O.S 52 Wk High 52 Wk Low

$28.28 $44.65 $15.18 37% $31.15 $21.40

2007-2011 2008-2012 2007-2010 2008-2011 2009-2012 2007-2009 2008-2010 2009-2011 2010-2015 Yr EPS Growth -1.7% 2.9% -3.6% -4.5% 1.1% 7.6% -8.4% -10.2% 15.5

2003-2010 2004-2011 2005-2012 2003-2008 2004-2009 2005-2010 2006-2011 2007-201210 Yr EPS Growth 4.3% -3.3% 2.0% 9.8% -0.4% -3.0% -4.4% 3.7%

2003 2004 2005 2006 2007 2008 2009 2010 2011Diltued EPS 1.06$ 1.88$ 1.66$ 1.86$ 1.59$ 1.70$ 1.84$ 1.43$ 1.4$

2013E 2014E

Forecast Method 1.76$ 1.92$Linear Regression Method 1.88$ 2.04$Analyst Estimate 2.22$ 2.35$

Normal Earnings 2.22$Growth Rate 9.00%Corp Bond Rate 3.50Per Share Value 44.65$

MOS 66%Purchase Price 15.18$Current Price $28.28Actual Discount 37%

Growth Sensitivity Increme 10%EPS Sensivity Increments 10%

Graham's Sensitivity Matrix

M

Graham Value Calculation

66%7,093.22AnalystEstimate

Pfizer Inc.


$1.06

$1.88$1.66

$1.86$1.59 $1.70

$1.84

$1.43 $1.48

$1.90$2.22

$2.42

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1.78$ 2.00$ 2.22$ 2.44$ 2.66$

7.2% 31.70$ 35.67$ 39.63$ 43.59$ 47.56$

8.1% 33.71$ 37.93$ 42.14$ 46.36$ 50.57$

9.0% 35.72$ 40.19$ 44.65$ 49.12$ 53.58$

9.9% 37.73$ 42.45$ 47.17$ 51.88$ 56.60$

11.9% 42.15$ 47.42$ 52.69$ 57.96$ 63.23$

EPS

Growth


14/18

Pfizer Inc.Current EPS

Exp Growth Dividend Yield

Business

Safety

Financial

Safety

Earnings

Safety

(PFE) 21% 3.39% bove Averag Excellent bove Average12/28/2013 Current PE 11 of 20 pts 20 of 20 pts 11 of 20 pts

3.39%

Katsenelson Absolute PE Current Price Fair Value Fair Value PE Current PE FV Exp Grth M.O.S

$28.28 $51.52 25.88 20.06 25% 45%

Determine Business Risk 2008 2009 2010 2011 2012 TTM AVERAGE STDEVROE 19.94% 14.41% 13.11% 14.20% 17.58% 18.07% 16.2% 2.7%

Consistency/quality check 0 0 1 1 1 3ROA 10.33% 6.09% 5.90% 6.21% 7.69% 7.93% 7.4% 1.7%

Consistency/quality check 0 0 1 1 1 3CROIC 27.38% 10.27% 7.18% 13.95% 12.64% 12.24% 13.9% 7.0%

Consistency/quality check 0 0 1 0 0 1Intangibles % of Book Value 30.79% 75.56% 65.55% 65.50% 56.62% 53.63% 57.9% 15.4%

Consistency/quality check 0 1 1 1 1 4

Business Risk Factor: 11 pts out of 20 Above Average 1% Factor 11 0.0%

Determine Financial Risk 2008 2009 2010 2011 2012 TTM AVERAGE STDEVCurrent Ratio 1.59 1.66 2.11 2.06 2.15 2.35 1.99 0.30

Consistency/quality check 1 1 1 1 1 5Total Debt/Equity Ratio 0.30 0.64 0.50 0.47 0.46 0.49 0.48 0.11

Consistency/quality check 1 1 1 1 1 5Short Term Debt/Equity Ratio 0.16 0.06 0.06 0.05 0.08 0.11 0.09 0.04

Consistency/quality check 1 1 1 1 1 5FCF to Total Debt 95.68% 26.68% 22.58% 47.70% 41.98% 37.76% 45.4% 26.4%

Consistency/quality check 1 1 1 1 1 5

Financial Risk Factor: 20 pts out of 20 Excellent 10% Factor 20 0.0%

Determine Earnings Predicta 2008 2009 2010 2011 2012 TTM AVERAGE STDEVGross Margin 83.20% 82.23% 75.99% 77.63% 80.79% 80.48% 80.1% 2.7%

Consistency/quality check 0 0 1 1 0 2Net Margin 23.76% 25.93% 16.98% 17.31% 24.22% 25.81% 22.3% 4.1%

Consistency/quality check 1 0 1 1 1 4Earnings $1.70 $1.84 $1.43 $1.48 $1.90 $1.99 1.72 0.23

Consistency/quality check 1 0 1 1 1 4Cash from Ops $18,238.00 $16,587.00 $11,454.00 $20,240.00 $17,054.00 $16,521.00 $16,682.33 2918.42

Consistency/quality check 0 0 1 0 0 1Earnings Predict. Factor: 11 pts out of 20 Above Average 1% Factor 11 0.0%

Katsenelson Absolute PE Valuation ModelEarnings Growth 21.00% 20.06Dividend Yield 3.39% 3.00

=Adjusted Base PE 23.06

xBusiness Risk Above Average [1 + (1 - 0.99)]Premium/Discount Factor: 0.99 xFinancial Risk Excellent [1 + (1 - 0.9)]Premium/Discount Factor: 0.90 xEarnings Predictabi lity Above Average[1 + (1 - 0.99)]Premium/Discount Factor: 0.99 =Adjusted Fair Value PE 25% 25.88


P/E Exp EPS Grwth Rate Dividend Yield Add'l P/E Points

7.00 0% 0.0% 0.0

7.65 1% 0.1% 0.5

8.30 2% 0.5% 0.5

8.95 3% 1.0% 1.0

9.60 4% 1.5% 1.5

10.25 5% 2.0% 2.0

10.90 6% 2.5% 2.5

11.55 7% 3.0% 3.0

12.20 8% 3.5% 3.5

12.85 9% 4.0% 4.0

13.50 10% 4.5% 4.5

14.15 11% 5.0% 5.0

14.80 12% 5.5% 5.5

15.45 13% 6.0% 6.0

16.10 14% 6.5% 6.5

16.75 15% 10.0% 10.0

17.40 16%

17.90 17%

18.40 18%

18.90 19%

19.40 20%

19.90 21%

20.40 22%

20.90 23%

21.40 24%

21.90 25%

0.65

0.50


15/18

Pfizer Inc. Shares Out. Main. Capex Normalized Income Disc

(PFE)7093.223 7,093.22 $1,316.78 $16,513.20

12/28/2013Figures in Millions except per share values

Current Price EPV Net Reproduction Value EP

$28.28 $23.01 $17.96

Asset Valuation Section EPV Valuation Section

Data: Asset ValuationShares Outstanding 7093.2 TTM Free Cash Flow $

Balance Sheet Assets 187,398.0$ Avg Normalized Income $Adjusted Assets 187,398.0$ Med Normalized Income $Total Liabilities 105,148.0$ Avg Adj. Income 5 yrs $Total Equity 82,250.0$ TTM Adjusted Income $

Average SGA % 29.2%

Marketing/Brand Value 17,201.8$ Data: EPVR&D Value 21,150.4$ Cost of Capital

Cash Needed for Business 576.0$ Normalized Adjusted Income $Interest Bearing Debt 40,377.0$ Average Maintenance Capex $Non Interest Bearing Debt 64,194.0$ Interest Bearing Debt $Excess Cash 34,166.3$ 1% of sales $

Cash & Equiv $

Calculation: Asset Valuation Cash - Debt $Total Per Share Shares

Tangible BV (5,611)$ (0.79)$Adjusted BV 82,250$ 11.60$ Calculation: EPVNCAV (40,385)$ (5.69)$ Cost of Capital RatesReprod. Cost of Assets 225,750$ 31.83$ 5% $ Reprod. Cost of Assets BV 120,602$ 17.00$ 7% $ Total Net Reprod. Cost 127,390$ 17.96$ 9% $

11% $ 13% $

Quarterly numbers based on: Q1us men s:

Assets Book Value Fixed BV MultiplierReproductionAsset Value

Cash & Equivalents 2,134.0$ 2,134.0$

Marketable Securities 33,212.0$ 33,212.0$

Adjustments:

Liabilities & Equity Bo

Accounts Receivable 12,735.0$ 12,735.0$ Accounts Payable $ Other Receivable 9,647.0$ 9,647.0$ Accrued Expenses $ Net Receivables 22,382.0$ 22,382.0$ Accrued Liabilities $

Inventories: Raw Materials 916.0$ Notes Payable/Short Term Debt $

Inventories: Work in Progress 3,456.0$

Current Port. of LT Debt/CapitalLeases $

Inventories: Purchased Components -$ Other Current Liabilities $

Inventories: Finished Goods 2,663.0$ Total Current Liabilities $

Inventories: Other -$ Long-Term Debt $ Inventories -- Total 7,035.0$ 7,035.0$ Capital Lease Obligations $ Prepaid Expenses -$ -$ Deferred Income Taxes $ Current Defered Income Taxes -$ -$ Total Other Liabilities $

Other Current Assets -$ -$ Total Liabilities $

Total Current Assets 64,763.0$ 64,763.0$ Common Stock Equity $

Goodwill, Net 43,752.0$ 43,752.0$ Retained Earnings $ Intangibles, Net 44,109.0$ 44,109.0$ Total Capitalization $

Intangibles 87,861.0$ 87,861.0$ Total Equity $Property/Plant/Equipment - Net 13,950.0$ 13,950.0$ Total Liabilities & Equity $

Other Long Term Assets, Total 20,824.0$ 20,824.0$Total Assets 187,398.0$ 187,398.0$

Values for Normalized Incom



16/18

Pfizer Inc.

(PFE)12/28/2013 Current Price NNWC NNWC % NCAV NCAV %

$28.28 -$6.98 0.0% -$5.69 0.0%

Figures in Millions except per share values BV

BV

Multiplier Net Net Value

Cash & Equivalents 2,134.00$ 100% 35,346.00$Marketable Securities 33,212.00$

Accounts Receivable 22,382.00$ 75% Other Receivable -$Receivables 22,382.00$ 16,786.50$

Inventories: Raw Materials 916.00$ 50% Inventories: Work in Progress 3,456.00$

Inventories: Purchased Components -$Inventories: Finished Goods 2,663.00$Inventories: Other -$

Inventories -- Total 7,035.00$ 3,517.50$Current Assets - Total 64,763.00$ 64,763.00$Total Assets 187,398.00$ 187,398.00$Total Liabilities 105,148.00$ 105,148.00$Shares Outstanding 7,093.22 7,093.22

Total ($m) Per Share

Total Current Assets 64,763.00$ 9.13$

Market Cap & Share Price 200.6B 28.28$

Book Value 82,250.00$ 11.60$

Net Net Working Capital (49,498.00)$ (6.98)$Discount to NNWC 0%

Net Current Asset Value (40,385.00)$ (5.69)$Discount to NCAV 0%

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Stock Valuation Logbook

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Tickers Company Sector Industry Country Earnings

Date

Date

Added

Average

Valuation

Target

Price Adde

Pric

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