Finding the Value of CaesarStone Company, Research Paper Example

CSTE Valuation

Subsequent to the substantial global budget crisis of 2008, the economy of the United States seemed to be back on track with regards to the production of employment. It is anticipated that this progress will extend in 2014 and beyond.  The unemployment rate in 2013 dropped to its lowest level since the beginning of the economic crisis in 2008. The unemployment rate dropped to 7.0% in 2013. It is anticipated that at the current rate, the unemployment level in the United States will decrease to 5.7% by the end of 2015. The corporate profits are rising and the corporations are reaping the benefits by creating a number of employment positions which are low salaried.

Israeli Economic Perspective

Israel operates a market based economy. The rating which is experienced by the State of Israel is rated sixteenth on a scale of one hundred and eighty seven nations. This infers that Israel is an extremely well developed nation.  Israel is deficient in natural resources and is reliant on the importation of a number of items. The discovery of fossil fuel reserves which are located off the coast of Israel may cause an assertive economic impact.  Industrial products are a classification of stock investments which have increasing merchandise which is used in conjunction with production and assembling. This category of the Israeli economy includes metal manufacturing, concrete, lumber and machinery products.

Organization

Caesarstone Sdot Yam Ltd.  manufactures constructed stone finishes in two zones in the State of Israel. These zones are the Bar Lev industrial area and the Kibbutz Sdot Yam which are in the vicinity of Kamiel. The products which are manufactured by Caesarstone Sdot Yam Ltd. are marketed in forty nations and are a feasible option for stone treatments which are applied as the interior decor of the residential and commercial establishments. The conventional application of Caesarstone Sdot Yam products includes kitchen countertops, vanity top; treatments sinks and tiles. The competitors in the global market include DuPont Safety and Protection Products, Creative Touch Interiors and Cold Spring Granite.

History

In the decade of the 1980s, the financial situation of Kibbutz Sdot Yam was dire. Obligations were rising and the members of the group were departing. The plant which has been founded by Amos Amir was dismantled and reassembled in the early 1990s. The Caesarstone Sdot Yam Ltd. had been reorganized as strategic partnerships were formed with clients in Australia and Italy. These aspects enabled the restoration of the Caesarstone Plant. These progresses were attributed to Moshe Narkis, who had been a teacher at Technion. He had been able to find the correct formula for the development of quartz furnishings. A production facility was instated in 2005 in the Bar Lev industrial area. The company received an infusion from TENE Investments in 2006 in exchange for a 21.6% ownership of the facility. This enabled the development of a second manufacturing facility and raised the number of manufacturing facilities which were operated by Caesarstone Sdot Yam Ltd.to four.

Financial Production

Caesarstone Sdot Yam’s functions are reliant on the home construction market. In 2012, Caesarstone possessed a 13% global market share. The largest numbers of clients are located in Australia which is followed by the United States and Israel. Caesarstone had been able to increase its market presence at an annual rate of 30% between 2002 and 2008. In 2009, Caesarstone posted a net income of $162 million. In 2009, $15 million had been paid to shareholders. This income represented an increase of $150 million from the previous year. In 2011, the net income which had been realized by Caesarstone reached $260 million which demonstrated a 31% increase from the previous year. The net benefits to shareholders which had been paid by Caesarstone in 2011 totaled to $29 million. The 2012 revenues at Caesarstone totaled to $296.6 and the benefits which were paid to shareholders amounted to $39.6 million. These aspects represented a 36.4 % increase from the previous year. A financial projection of Caesarstone Sdot Yam ltd. is demonstrated on the following page.

Five Year Financial Projection for CSTE Based on Growth from 2012- 2013