This set of assumptions results in an estimated intrinsic value per share of about $30, which is right around where the shares are trading as of this writing. Assuming this is a reasonable scenario, I’d start getting interested in the stock at around $24, which would be a 20 percent discount to my estimated intrinsic value. I’m not looking for much of a margin of safety because Biomet’s strong balance sheet, excellent industry prospects, and solid profitability all make it less likely that something will go horribly wrong with my assumptions.
