Below please find a table outlining a discounted cash flow forecast for CTIB, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Yunhong CTI Ltd ranked in the 74th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 255.5% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for CTIB, they are:
18% of the company's capital comes from equity, which is greater than only 7.36% of stocks in our cash flow based forecasting set.
As a business, Yunhong CTI Ltd experienced a tax rate of about 0% over the past twelve months; relative to its sector (Consumer Cyclical), this tax rate is higher than only 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CTIB, try CVGI, MGA, LEA, SBGI, and CNK.
The net proceeds will be used by the Company for working capital. On January 3, 2020, Yunhong CTI Ltd. (formerly known as CTI Industries Corporation, the "Company") entered into an agreement to sell up to $5 million of convertible preferred stock to a new strategic investor, LF International Pte. Ltd., ("LF") a Singapore private limited company which is controlled by Mr. Yubao Li.
"The change of our legal name is the next step in the Yunhong CTI evolution and will make our branding consistent across all audiences as we continue to execute on our strategic plan to create a leaner, more focused and profitable operation," said Frank Cesario, President and CEO of Yunhong CTI Ltd. Yunhong CTI Ltd. is one of the leading manufacturers and marketers of foil balloons and produces laminated and printed films for commercial uses.
On January 3, 2020, the Company disclosed that it had entered into a stock purchase agreement ("The Purchase Agreement"), with LF International Pte. Ltd., a Singapore private limited company (the "Investor"), for a strategic investment, which the Company expects to resolve the over advance circumstance with its primary lender and provide a confident first step in reconstructing a healthy capital structure. This initial closing is part of a larger Offering of 500,000 shares of the Company's newly created Series A Convertible Preferred Stock, no par value per share ("Series A Preferred"), with each share of Series A Preferred initially convertible into ten shares of the Company's common stock, at a purchase price of $10.00 per share, for aggregate gross proceeds of $5,000,000 (the "Offer...