Discounted Cash Flow Calculation for ASX:VG1 using Excess Returns Model Model
The calculations below outline how an intrinsic value for VGI Partners Global Investments is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
The current share price of
VGI Partners Global Investments
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
VGI Partners Global Investments's
is considered below, and whether this is a fair price.
Price based on past earnings
VGI Partners Global Investments's earnings available for a low price, and how does
this compare to other companies in the same industry?
VGI Partners Global Investments's earnings are expected to grow by 17.5% yearly, however this is not considered high growth (20% yearly).
Unable to determine if VGI Partners Global Investments is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
VGI Partners Global Investments's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
VGI Partners Global Investments
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
VGI Partners Global Investments's finances.
The net worth of a company is the difference between its assets and liabilities.
VGI Partners Global Investments is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
VGI Partners Global Investments's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
VGI Partners Global Investments's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
VGI Partners Global Investments has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
VGI Partners Global Investments Limited (ASX:VG1) And The Financial Sector Outlook 2018
VGI Partners Global Investments Limited (ASX:VG1), a AU$580.80M small-cap, is a capital market firm operating in an industry, which has recently been facing serious existential threats resulting from potential disintermediation and disruption from new technology. … See our latest analysis for VGI Partners Global Investments What’s the catalyst for VGI Partners Global Investments's sector growth? … Given the lack of analyst consensus in VGI Partners Global Investments’s outlook, we could potentially assume the stock’s growth rate broadly follows its capital markets industry peers.
VGI Partners Global Investments Limited provides investors with the opportunity to access the investment strategy of VGI Partners. Its investment portfolio comprises global listed securities, holding a combination of long and short positions, and cash. The company was incorporated in 2017 and is based in Sydney, Australia.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.