Sealed Air Valuation Case Study

This is one of the tougher valuation assignments that you will encounter. Place an approximate value on Sealed Air (SEE) 1998.

Use the 10-K:

My class notes on valuing Sealed Air are here but avoid viewing until after you complete your valuation.

Class handout on doing the valuation:

The video on this valuation can be found in the Value Vault.

Just email me at and put: VALUE VAULT in the heading of your email and I will send you the link to the video on valuing Sealed Air.

My hat is off to you if you are able to do this valuation. If you are stuck then I suggest that you go through this blog and read other postings to learn about valuation.

Good luck!

6 responses to “Sealed Air Valuation Case Study

  1. John –

    Thanks for sharing this information. Greenwald’s book “Value Investing” was excellent, especially the first-half which explains the asset value-earnings power-future growth equation.

    I have a few questions from the handout, which maybe you can clarify?

    1. Any accounting adjustments. Did Greenwald provide any examples to illustrate his point in this or other lectures? If not, can you give me a few examples that you do in your analysis?

    2. Where in the financials do you look for unconsolidated subsidiaries? (Balance sheet, I assume.) If you find an unconsolidated sub, what adjustments do you make?

    4. What does Greenwald mean by “Adjustment for excess depreciation.”

    5. What is his point about replacing the sales force? “I hire and train new people, since it has been expensed, then this must be added back.”

    6. What are the adjustments to “replace buildings (over depreciation) and new machinery (cost to replace going down due to new technology).”

    I have a free new newsletter, Checklist Investor Quarterly, coming out in January. I’d like to include a link to your Sealed Air notes, if you do not mind.

    Thanks in advance.
    Hewitt Heiserman

    • I will take your questions in random order:

      Feel free to link, post or use any material here with or without attribution or retribution.

      Other Greenwald Lectures found here:

      And his other video lectures at in the value vault. If you do not have access, then
      email me at with the subject title: Value Vault. I will email you the link.

      Found in the financial footnotes. Unconsolidated subsidiary is a subsidiary showing individual financial statements that are not presented in the consolidated financial statement of the group to which it belongs. Usually the equity method of accounting is used for unconsolidated subsidiaries. A subsidiary is treated as not consolidated even though more than fifty percent of voting common stock is owned by the parent when:

      The parent is not in actual control of subsidiary;
      The parent has only temporary control of the subsidiary;
      The nature of the subsidiary’s operation is significantly different than those of the parent.
      More detail here:

      It has been a long time since I viewed the notes/videos. Greenwald says excess depreciation is added back (the difference) between its true capex and depreciation rate if depreciation is greater. Usually not meaningful but depends upon depreciation method.

      Prof. Greenwald is trying to get at replacement cost of the business. If you were going to compete against this business you would have to lay out money to recruit, train and retain a sales force. So he wants to get at the full cost to replace a sales force from scratch. Not recommended for businesses in secular decline or that will go away.

      On question 6: I don’t know how to answer that one. You really are talking about specific domain expertise, I believe, to maintain owner’s earnings.

      If the other two lectures and materials in the value vault do not answer your questions, then please repost your questions.

      Thanks for asking. I enjoyed your book, It’s Earnings That Count.

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  4. I’m trying to following the valuation but found some of the numbers from 10-K don’t match with the hand written notes from Pro. Greenwald. Also, I can’t find the video of the Sealed Air valuation. If anyone know where the video is location please let me know, thanks.

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