Discounted Cash Flow Calculation for ASX:NEW using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
New Energy Solar
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
ASX:NEW DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
New Energy Solar
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
New Energy Solar
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
New Energy Solar's share price is below the future cash flow value, but not at a moderate discount (< 20%).
New Energy Solar's share price is below the future cash flow value, but not at a substantial discount (< 40%).
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
New Energy Solar's
is considered below, and whether this is a fair price.
Price based on past earnings
New Energy Solar's earnings available for a low price, and how does
this compare to other companies in the same industry?
Unable to determine if New Energy Solar is high growth as no earnings estimate data is available.
New Energy Solar's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
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.
New Energy Solar'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.
New Energy Solar
has a total score of
1/6, 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
New Energy Solar's finances.
The net worth of a company is the difference between its assets and liabilities.
New Energy Solar is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
New Energy Solar has no long term commitments.
This treemap shows a more detailed breakdown of
New Energy Solar'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.
New Energy Solar 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.
Is Buying New Energy Solar Limited (ASX:NEW) For Its Upcoming AU$0.037 Dividend A Good Choice?
On the 15 August 2018, New Energy Solar Limited (ASX:NEW) will be paying shareholders an upcoming dividend amount of AU$0.037 per share. … Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine New Energy Solar's latest financial data to analyse its dividend characteristics. … When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
What Does New Energy Solar Limited's (ASX:NEW) Ownership Structure Look Like?
In this article, I will take a quick look at New Energy Solar Limited’s (ASX:NEW) recent ownership structure – an unconventional investing subject, but an important one. … With this size of ownership, retail investors can collectively play a role in major company policies that affect shareholders returns, including executive remuneration and the appointment of directors. … Private Company Ownership Potential investors in NEW should also look at another important group of investors: private companies, with a stake of 1.68%, who are primarily invested because of strategic and capital gain interests.
New Energy Solar Limited acquires, owns and manages large scale solar generation facilities. The firm may also invest in other renewable energy assets including wind, geothermal, hydro-electricity, hybrid solutions and owns and manages large scale solar generation facilities. New Energy Solar Limited was established in 2015 and is based in Sydney, Australia.
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