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Clorox Company is fairly valued with a margin of safety

|Includes: The Clorox Company (CLX)

I believe CLX, at approximately $63/share is fairly valued with a margin of safety on a cash flow valuation basis.

For nearly 100 years, Clorox has operated in the household product industry, expanding its portfolio to include such leading brands as Clorox, Glad, Hidden Valley, and Kingsford. The firm distributes its products through mass merchants, grocery stores, and other retail outlets. With its acquisition of Burt's Bees in 2007, Clorox gained entry into the fast-growing natural personal-care category. International sales amount to 20% of the firm's consolidated total.
(Source: Morningstar.com)
 

I estimated the firm's WACC at 6.38% using the Capital Asset Pricing Model and the company's recent SEC filings.    
 
Recent free cash flows and noted growth rates:

Year FCF $Millions
2001 555
2002 699
2003 598
2004 727
2005 614
2006 342
2007 562
2008 560
2009 541
2010 616
TTM 670

Average Annual Growth: approx 5%
CAGR: approx. 1%
Internal Growth Rate: approx. 8%
Consensus Forecast Industry 5-Year Growth: approx. 11% per year
Consensus Forecast Company 5-Year Growth: approx. 9% per year

Assume the company achieves a lower 5-year growth rate of 5% per year, and assume that after the next five years, the company achieves no growth or 0% growth per year forever.

Discounted Cash Flow Valuation:

Year FCF $ Millions
0 670
1 704
2 739
3 776
4 814
5 855
Terminal Value 14073

The firm's future cash flows, discounted at a WACC of 6.38%, give a present value for the entire firm (Debt + Equity) of $13,552 million. If the firm's fair value of debt is estimated at $2,930 million, then the fair value of the firm's equity could be $10,622 million.

$10,622 million / 139 million outstanding shares is approx $76 per share. A 20% margin of safety from here is approx $61 so I'd buy CLX today at $61 or less.  I believe CLX at $63/share is fairly valued with a margin of safety on a cash flow valuation basis.