Jollibee Foods Corporation (JFC) Stock Analysis

Jollibee Foods Corporation (JFC) was incorporated on January 11, 1978. JFC’s principal business is the development, operation, and franchising of quick-service restaurants under the trade name “Jollibee”.

JFC's Subsidies include:

Fresh N' Famous Foods, Inc. - develops, operates and franchises quick-service restaurants under the trade names "Chowking" and "Greenwich".
Red Ribbon Bakeshop, Inc. - develops, operates and franchises restaurants under the "Red Ribbon" trade name.
Mang Inasal Phils., Inc. (MIPI) - develops, operates and franchises restaurants under the "Mang Inasal" trade name.
Perf Restaurants, Inc. - which franchises restaurants under the "Burger King" trademark in the Philippines.
JFC also has subsidiaries and affiliates overseas which develop and operate its international brands, "Yonghe King", "Hong Zhuang Yuan", "San Pin Wang" brands under the SuperFoods Group, "12 Hotpot", "Jinja" and "Dunkin' Donuts".

By the end of 2015, there were 916 Jollibee stores nationwide, of which 459 were franchised and 457 are Company-owned. In international operations, Jollibee had 139 stores with 32 stores in the US, 72 in Vietnam, 13 in Brunei, one in Hong Kong, two in Singapore, and 19 in the Middle East.

Sector Details:

Sector: Industrial
Subsector: Food, Beverage & Tobacco

source: PSE Edge

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Value Screen Scorecard

Piotroski F-Score

Altman Z-Score

Estimated Growth Rates

Intrinsic Value Calculations

Valuations By Top Leading Brokers

Value Screen Scorecard

Stocks are scored based on Profitability & Growth, Financial Health, Quality, Dividends and Valuation. Each criterion in the list is scored based on financial data for a total of 100 points. Stocks are ranked from 1 to 5, 1 being the highest.

Read this post to get more information on how the value scorecard works.

Scoring Criteria:

Rank # 1: Extremely good company
Rank # 2: Good company
Rank # 3: Average company
Rank # 4: Needs further study and research to identify the company's weaknesses
Rank # 5: Risky company

Value Scorecard (1-16-2017 3Q2016 PERIOD)

Criteria	Values	Score
Criteria # 1: Market capitalization	227,917,710,904	1
Criteria # 2: Profit margins (5-yr. Average) Gross profit margin Operating profit margin Net profit margin	18.77% 6.30% 4.96%	3
Criteria # 3: Net income consistently growing for the last 5 years		1
Criteria # 4: Revenue consistently growing for the last 5 years		2
Criteria #5: Cash & equivalents consistently growing for the past 5 years		1
Criteria # 6: Operating cash flow consistently growing for the past 5 years		1
Criteria # 7: Earnings per share consistently growing for the past 5 years		1
Criteria # 8: 5-yr. EPS growth rate	9.36%	1
Criteria # 9: Return on equity 3-yr. average 5-yr. average Previous year's ROE YoY growth	19.26% 18.83% -20.92%	4
Criteria # 10: Return on invested capital 5-yr. average	12.49%	2
TOTAL POINTS		17/30

Criteria	Values	Score
Criteria # 1: Debt settlement capacity Free cash flow Long-term debt Current ratio D/E ratio Interest coverage ratio Working capital to total debt ratio	6,972,070,897 8,945,381,143 1.27 0.27 26.04 0.54	8
Criteria # 2: Cash to current assets Current Recent	0.54 0.49	2
Criteria # 3: Inventory to current assets Current Recent	0.20 0.19	4
Criteria # 4: Accounts receivable to current assets Current Recent	0.12 0.13	4
Criteria # 5: Accounts payable to current assets Current Recent	0.73 0.73	-4
TOTAL POINTS		14/25

Criteria	Values	Score
Criteria # 1: Piotroski F-Score	8	8
Criteria # 2: Altman Z-Score	7.16	10
TOTAL POINTS		18/20

Criteria	Values	Score
Criteria # 1: Dividend payout ratio	36.67%	5
Criteria # 2: Dividend yield	0.86%	1
TOTAL POINTS		6/10

Criteria	Values	Score
Criteria # 1: PEGY ratio	4.16	0
TOTAL POINTS		0/15

Stock Rating	Score
Final Score	55/100
Stock Ranking	3

Piotroski F-Score

The Piotroski F-Score is a financial metric model that's helpful in spotting turnaround businesses. For more information, you may read about it here.

Scoring Criteria:

7 to 9 points: Wonderful business
5 to 6 points: Average business
1 to 4 points: Weak business

Piotroski F-Score (1-16-2017 3Q2016 PERIOD)

Piotroski F-Score	Values
Profitability:
1: Net income 2: Operating cash flow 3: Return on assets 4: Quality of earnings	1 1 1 1
Leverage:
5: Long-term debt vs. assets 6: Current ratio 7: Shares outstanding	1 0 1
Operating efficiency:
8: Gross margin 9: Asset turnover	1 1
Piotroski F-Score	8

Altman Z-Score

The Altman Z-Score is a bankruptcy prediction model that's helpful in spotting low quality companies. More information about it can be found in this post here.

Scoring Criteria:

Z > 2.99; “SAFE” Zone (Healthy business)
Z < 1.81; “DISTRESS” Zone (Troubled business)
1.81 > Z > 2.99; “GREY” Zone (Warrants more investigation)

Altman Z-Score (1-16-2017 3Q2016 PERIOD)

Altman Z-Score	Values
X1 (Working capital / Total assets)	0.0831
X2 (Retained earnings / Total assets)	0.4357
X3 (EBIT / Total assets)	0.1044
X4 (Market capitalization / Total liabilities)	6.7554
X5 (Revenue / Total assets)	1.6455
Altman Z-Score	7.16

Estimated Growth Rates

Estimated growth rates are calculated using exponential chart trend line formula.

Estimated Growth Rates (3Q2016)

Growth Rate	3-yr. (%)	5-yr. (%)
Revenue	10.54%	11.42%
Net income	3.83%	10.28%
Earnings per share	3.14%	9.36%
Operating cash flow	26.23%	12.41%

Intrinsic Value Calculations

The figures and all other variables used in order to get the intrinsic value are listed in detail below for reference purposes so that cross-checking can be made to verify the values obtained.

Intrinsic Value Calculations (1-16-2017 3Q2016 PERIOD)

WACC Variables	Values
Risk free rate Stock beta Market risk premium Cost of equity (Re)	4.364% 0.5800 8.10% 9.06%
Shares Price Market value of equity	1,075,083,542 212.00 227,917,710,904
Interest rate Tax rate Cost of debt (Rd)	2.06% 30.00% 1.44%
Debt book value Adjustment Market value of debt	10,345,816,668 1.20 12,414,980,002
Total capital Weighted average cost of capital (WACC)	240,332,690,906 8.67%

DCF Variables	Values
Free cash flow	6,972,070,897
Projected growth rate	9.36%
Shares outstanding (diluted)	1,075,083,542
Discount rate (WACC)	8.67%
Perpetuity growth rate	7.00%
Margin of safety	25.00%
Intrinsic value per share	242.09
Adjusted intrinsic value per share	181.57

P/E Valuation Model Variables	Values
Input data:
Earnings per share (TTM) P/E ratio (TTM) Growth rate Discount rate	4.99 42.48 9.36% 8.67%
Calculations:
Year	EPS x Growth
1 2 3 4 5 6 7 8 9 10	4.99 5.46 5.97 6.53 7.14 7.81 8.54 9.33 10.21 11.16
Value in 10 years	474.31
Margin of safety	25.00%
Intrinsic value	206.56
Adjusted intrinsic value	154.92

Valuations By Top Leading Brokers

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Jollibee Foods Corporation (JFC) Stock Analysis

Value Screen Scorecard

Scoring Criteria:

Value Scorecard (1-16-2017 3Q2016 PERIOD)

Profitability & Growth

Financial Health

Quality

Dividend Assessment

Valuation

Final Score & Ranking

Final Score

55/100

Stock Ranking

3

Piotroski F-Score

Scoring Criteria:

Piotroski F-Score (1-16-2017 3Q2016 PERIOD)

Altman Z-Score

Scoring Criteria:

Altman Z-Score (1-16-2017 3Q2016 PERIOD)

Estimated Growth Rates

Estimated Growth Rates (3Q2016)

Intrinsic Value Calculations

Intrinsic Value Calculations (1-16-2017 3Q2016 PERIOD)

Weighted Average Cost Of Capital (WACC) Calculations

Discounted Cash Flow (DCF) Calculations

P/E Valuation Model

Valuations By Top Leading Brokers

We love to hear your thoughts! Share them on the comments section below. Happy investing!

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