I ran the numbers from the company's latest 10-K filing. This is what I found.

Short-Term Value
My short-term (3-8 week hold) target price for the stock is $76.17, with an initial trailing stop set at $65.75. With a current price of $66.75, upward price movement will find resistance at $68.20 and again at $69.33, with final resistance found at $72.16. There is no downward price movement support.

Long-Term Value
Everything that follows is for long-term, buy and hold investors, the folks that understand that price determines return and that there is no substitute for one's own due diligence.

Average Volume
The average volume number is simply an average of the number of shares traded over a specific period of time, in this case the prior 50 days. The lower the number the greater the volatility the markets can impact on the stock price. For Emerson the most recent ADV number is 3.582 million shares.

Days to Cover
The most recent days to cover number is 2. The days to cover number is a measure of the company's outstanding shares that are currently shorted, expressed as the number of days required to close out all the short positions. The number is determined by dividing the number of outstanding shares currently shorted by the average daily volume. The days to cover number is updated twice per month and is sometimes used along with the beta ratio as a volatility precursor for a stock.

Beta Ratio
The beta ratio is a measure of the systemic risk of ownership of a particular stock as compared to the systemic risk of ownership of the market as a whole. The higher the beta ratio, the more volatile the stock. For Emerson the current beta ratio is 1.15.

Unrelated Income
Income unrelated to a company's day to day operation, such as income tax benefits or income from other sources will distort a company's earnings and consequently its fair value. Investors should always explore the sources of a company's earnings to better understand potential valuation impacts. For Emerson none of the company's operating income came from income tax benefits or "other" sources.

Insider Transactions
The SEC classifies insiders as the "management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their "insider" knowledge. In the past 12 months, the company has reported 76 insider trades involving 704,513 shares of stock. Of those 76 insider trades, 33 were Buys involving 428,995 shares of stock, and 43 were Sells involving 275,518 shares of stock, creating an insider buy to sell ratio of 1.6 to 1.

Year-Over-Year Metrics
Several year over year metrics that are of interest to many investors are revenue growth, free cash flow growth, earnings growth, debt growth, price growth, and price growth. For EPC, revenue increased by 14%, earnings increased by 46%, free cash flow increased by 30%, debt increased by 2%, and the stock price increased by 18%. Year to date the stock price is down 13%.

Rates of Return
I calculate rates of return for any equity investment by multiplying the a company's stock specific beta by the yield for a 10-year treasury and then adding my equity risk premium to that result. The equity risk premium is the excess return I want to receive for investing in an equity as opposed to a risk free investment such as a treasury. My calculated rate of return for Emerson is 6.50%.

Other Value Considerations
Other value considerations that many investors like to consider include the PE Ratio, the PEG Ratio, Return on Assets, Return on Equity, Return on Capital Employed, Return on Invested Capital, Cash Flow From Invested Capital, and Tangible Book Value. For EMR, the PE Ratio is 16, the PEG Ratio is 2, Return on Assets is 12.6%, Return on Equity is 28.7%, Return on Capital Employed is 18.8%, Cash Flow From Invested Capital is 25.6%, Book Value is $$14.36, and Tangible Book Value is $(0.34).

Baseline and Fair Value
As an on-going concern, my current baseline valuation for the company is $42. Baseline valuations are based on free cash flow value, net current asset value, book value, and tangible book value. My current fair value estimate for the stock is $51. The fair value estimate is my current valuation for a stock based on earnings, earnings growth, and the current 5-year yield of a AAA rated corporate bond. Value investing initiate, reduce, and terminate targets are derivatives of fair value.

Future Value
My future (5 year hold) target price for the stock is $93, which is an average annual return of 8%. A prior five year hold of the stock (FY2014- FY2018) would have returned an average of 4% per year. Past and future gains are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Any investment has the potential for loss, and past performance is no guarantee of future results.

My Investment Summary
Sell Half - The stock is currently trading at levels above my most recent $51 fair value estimate, but below my most recent $82 terminate target.

Disclosure
I am not a licensed or registered investment professional, nor am I qualified to provide investment advice. I also hold no shares in the stock mentioned in this post.

Wax