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Flowserve Corp

FLSAbove valueExpectations · demanding

Held by 2 superinvestors.

Price$80.56
Holders2
Total value$223.9M

SEC 10-K · fundamentals

Business quality

as of 2025-12-31

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+3.8%
Net margin
7.3%
ROE
15.8%
FCF margin
9.2%
Revenue $3.73B → $4.73B · 6y
What makes a business high quality

Valuation · value band

Above fair value

$23/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$81
cheaperpricier

Zero-growth floor

$15

Central IV

$23

Optimistic top

$59

Flowserve Corp (FLS): Two methods value the business — a conservative owner-earnings DCF and a growth-credited Greenwald estimate, $15–$59 / sh. Today’s price sits above both (price $81 as of 2026-08-25).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

Revenue growth 2% (lower of historical trend and fundamental cap, capped by moat) · moat 20 yr · discount 11.6% · Zero-growth downside $15

Price as of 2026-08-25 · yahoo · DGS10 4.7% @ 2026-08-24.

Method & numbers

Model cautions

  • The two methods’ midpoints differ materially — growth assumptions warrant review (over 20%).

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $17.77 – $26.76 · Greenwald $31.91 – $58.88 (neutral $46.57) · zero-growth base $21.77 · reproduction $2.28

Moat Franchise (moat) · terminal value 16% of present value · owner-earnings yield 3% vs 10Y 4.7%.

Graham earnings-power value (normalized NOPAT)$15.40 – $21.26 / sh

Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 54% (> 50%); estimate is degraded. Share-based compensation is left as a real expense (not added back).

Buffett owner-earnings value$18.14 – $21.77 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 10.0–12.0% band (9–11% base + 1.0pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 54% (> 50%); estimate is degraded. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 1.0pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 5.0 years of owner earnings, adding 1.0pp of cost-of-equity risk premium.

Reproduction value = tangible net assets $169.50M + capitalized R&D $123.50M（FY 2026, 2024, 2023, 2022） = $2.28 / sh. Reproduction value = tangible net assets (equity − goodwill − intangibles) + capitalized R&D (5y straight-line), ÷ diluted shares.

Moat reading: Franchise test compares earnings power (EPV) against reproduction value on both AV_conservative (tangible + capitalized R&D) and AV_reproduction (conservative + acquired-reset proxy). Both must clear the franchise multiple for a moat signal; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a wide moat · competitive-advantage period ≈ 20 years (earnings intact, ROIC stable over history).

Growth value: if the moat holds for 20 yr at ROIIC ≈ 599%, $10.14–$37.12 / sh (neutral $24.81). Conservative, not a forecast.

Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 6% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.

Baseline 9%–11%, net debt ≈ 5.0 years of owner earnings → +1.0pp cost-of-equity premium → effective 10.0%–12.0%.

Owner-earnings DCF: growth g₁ 2% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 10.21%–13.01% (DGS10 +4.5% to a 12% strict end, each +1.01pp for leverage premium, as of 2026-08-24). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp. Two-method midpoint gap 68%.

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about 18.8% a year in owner-earnings for the next few years. Revenue actually grew 6.3% a year.

The market wants it well ahead of its own track record.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

2 holders · $223.9M combined · this quarter +0 opened / -0 exited

This quarter1 added1 trimmed
Holders 1 → 2 · last 6q

SEC 13F · notes

Written summary

Flowserve Corp (FLS) is held by 2 of the superinvestors tracked on Compounder, with a combined $223.9M in reported 13F value. The largest position belongs to Henry Ellenbogen, where it makes up 2.1% of the portfolio.

Other notable holders by value include Ray Dalio (0.0% of its book).

Over the latest quarter, 0 of the tracked filers opened a new position in FLS, 1 added to existing ones, 1 trimmed, and 0 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

Also held by these investors

Investors holding Flowserve Corp (FLS) also commonly hold →

FLS's price is not below its conservative value band. See current strike-zone stocks

Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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