DJCO
Daily Journal Corporation
$575.10
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.3% below fair value
You pay
$575.10
Bear
$523.54
Fair
$594.99
Bull
$668.69
Bear
$523.54
-9.0%
7% stage 1 growth, 11% discount
Fair
$594.99
+3.5%
12% stage 1 growth, 11% discount
Bull
$668.69
+16.3%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
22.8x
Market is pricing in (growth)
10.8%
vs 11.9% base
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $594.99 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions