As of June 12, 2025, Scottish Investment Trust PLC's estimated intrinsic value ranges from $166.25 to $841.60 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $841.60 | -6.0% |
| Discounted Cash Flow (5Y) | $796.60 | -11.0% |
| Dividend Discount Model (Multi-Stage) | $569.74 | -36.3% |
| Dividend Discount Model (Stable) | $610.04 | -31.8% |
| Earnings Power Value | $166.25 | -81.4% |
Is Scottish Investment Trust PLC (SCIN.L) undervalued or overvalued?
With the current market price at $895.00, 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 Scottish Investment Trust PLC'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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.91 | 0.96 |
| Cost of equity | 9.4% | 11.7% |
| Cost of debt | 4.9% | 5.8% |
| Tax rate | 2.8% | 9.6% |
| Debt/Equity ratio | 0.14 | 0.14 |
| After-tax WACC | 8.8% | 10.9% |
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 | $797 | $531M | 69.9% |
| 10-Year Growth | $842 | $561M | 48.5% |
| 5-Year EBITDA | $525 | $349M | 54.3% |
| 10-Year EBITDA | $641 | $427M | 32.4% |
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 | $11M |
| Discount Rate (WACC) | 10.9% - 8.8% |
| Enterprise Value | $98M - $120M |
| Net Debt | $(2)M |
| Equity Value | $100M - $122M |
| Outstanding Shares | 1M |
| Fair Value | $149 - $183 |
| Selected Fair Value | $166.25 |
| Metric | Value |
|---|---|
| Market Capitalization | $599M |
| Enterprise Value | $597M |
| Trailing P/E | 15.11 |
| Forward P/E | 14.61 |
| Trailing EV/EBITDA | 6.40 |
| Current Dividend Yield | 205.72% |
| Dividend Growth Rate (5Y) | -6.81% |
| Debt-to-Equity Ratio | 0.14 |
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% | $252.48 |
| Discounted Cash Flow (5Y) | 25% | $199.15 |
| Dividend Discount Model (Multi-Stage) | 20% | $113.95 |
| Dividend Discount Model (Stable) | 15% | $91.51 |
| Earnings Power Value | 10% | $16.62 |
| Weighted Average | 100% | $673.71 |
Based on our comprehensive valuation analysis, Scottish Investment Trust PLC's weighted average intrinsic value is $673.71, which is approximately 24.7% below the current market price of $895.00.
Key investment considerations:
Given these factors, we believe Scottish Investment Trust PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.