As of May 28, 2025, Bloom Select Income Fund's estimated intrinsic value ranges from $1.11 to $4.73 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1.86 | -76.5% |
| Discounted Cash Flow (5Y) | $1.79 | -77.4% |
| Dividend Discount Model (Multi-Stage) | $1.85 | -76.6% |
| Dividend Discount Model (Stable) | $1.11 | -86.0% |
| Earnings Power Value | $4.73 | -40.2% |
Is Bloom Select Income Fund (BLB.UN.TO) undervalued or overvalued?
With the current market price at $7.91, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Bloom Select Income Fund's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.77 | 0.94 |
| Cost of equity | 7.1% | 9.9% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 5.4% | 6.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $2 | $1M | 81.8% |
| 10-Year Growth | $2 | $2M | 67.4% |
| 5-Year EBITDA | $2 | $1M | 77.8% |
| 10-Year EBITDA | $2 | $1M | 61.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $0M |
| Discount Rate (WACC) | 6.8% - 5.4% |
| Enterprise Value | $4M - $5M |
| Net Debt | $(0)M |
| Equity Value | $4M - $5M |
| Outstanding Shares | 1M |
| Fair Value | $4 - $5 |
| Selected Fair Value | $4.73 |
| Metric | Value |
|---|---|
| Market Capitalization | $8M |
| Enterprise Value | $8M |
| Trailing P/E | 107.16 |
| Forward P/E | 138.66 |
| Trailing EV/EBITDA | 14.35 |
| Current Dividend Yield | 704.60% |
| Dividend Growth Rate (5Y) | -7.53% |
| Debt-to-Equity Ratio | 1.11 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $0.56 |
| Discounted Cash Flow (5Y) | 25% | $0.45 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.37 |
| Dividend Discount Model (Stable) | 15% | $0.17 |
| Earnings Power Value | 10% | $0.47 |
| Weighted Average | 100% | $2.01 |
Based on our comprehensive valuation analysis, Bloom Select Income Fund's weighted average intrinsic value is $2.01, which is approximately 74.5% below the current market price of $7.91.
Key investment considerations:
Given these factors, we believe Bloom Select Income Fund is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.