On the four Ms, Technipfmc Plc earns 76 for management and 72 for moat. The management score rests on a return on invested capital of 19.6% and a gross margin of 22.0% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.60x equity.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 8.7% a year, below the 9.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 17.5x. That produces an intrinsic value of $28.81, a 10-CAP price of $40.74 and a payback time price of $48.41, with the value zone set at the highest of the three, $48.41. Today's price of $68.85 is 42% above it.
A wonderful business at the wrong price is still the wrong price. Technipfmc Plc scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $68.85 |
| Market cap | $27.0B |
| P/E ratio | 23.9x |
| Return on invested capital | 19.6% |
| Gross margin | 22.0% |
| Debt to equity | 0.60x |
| Free cash flow yield | 7.8% |
| Growth rate used | 8.7% |
| Growth rate measured | 9.0% |
| Exit multiple assumed | 17.5x |
| Company | Moat | Buy price |
| Halliburton Company (HAL) | 45 | $29.10 |
| NOV Inc. (NOV) | 35 | $20.62 |
| Weatherford International Pl (WFRD) | 60 | $84.39 |
| Tidewater Inc (TDW) | 73 | $87.13 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Technipfmc Plc rather than accepting ours.