Discounted Cash Flow Calculation for BST:1Y2 using Excess Returns Model Model
The calculations below outline how an intrinsic value for Hypothekarbank Lenzburg 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
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
is considered below, and whether this is a fair price.
Price based on past earnings
Hypothekarbank Lenzburg's earnings available for a low price, and how does
this compare to other companies in the same industry?
Hypothekarbank Lenzburg's earnings are expected to grow by 14.7% yearly, however this is not considered high growth (20% yearly).
Unable to determine if Hypothekarbank Lenzburg 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.
Hypothekarbank Lenzburg'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.
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.
Fundamentally a bank's business is based upon borrowing and lending money, for
this reason they typically have high levels of debt and we analyse them
This treemap shows a more detailed breakdown of
Hypothekarbank Lenzburg'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.
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.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Ms. Marianne Wildi serves as Chairwoman of the Management Board at Hypothekarbank Lenzburg AG. Ms. Wildi serves as Director of Leadership & Computer Science and Chief Executive Officer at Hypothekarbank Lenzburg AG and served as its Director of Services, Informatics & Logistics and Head of The Corporate Services, IT and Logistics Departments. She served as Chief Executive Officer at Hypothekarbank Lenzburg AG since January 20, 2010 and served as its Head of Services Informatics. She has been a Member of the Management Board at Hypothekarbank Lenzburg AG since 2010.
Marianne's compensation has been consistent with company performance over the past year, both up more than 20%.
Marianne's remuneration is lower than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Hypothekarbank Lenzburg management team is about average.
Chairwoman of the Executive Board
Director of Finance & Risk Management and Member of the Executive Board
Director of Private & Corporate Clients and Member of the Executive Board
Member of the Executive Board & Director of Market Services
Director of Operations & Member of the Executive Board
A ndré Renfer
Director of Services & Member of the Executive Board
Head of the Accounting Department & Authorised Officer
Technical Head of the Loans & Syndicated Financing Department and Vice Director
Head of Compliance & Deputy Director
Head of the Marketing & Communication Department and Authorised Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Hypothekarbank Lenzburg board of directors is about average.
Hypothekarbank Lenzburg AG provides various banking services and products to private, corporate, and investor customers in Switzerland. It offers accounts, real estate and mortgage loans, credit and debit cards, pension/financial planning services, and securities solutions; and foreign exchange, direct debit, safe box, and e-banking and mobile banking services. The company operates through its headquarters and has 12 branches, as well as operates 23 ATMs. Hypothekarbank Lenzburg AG was founded in 1868 and is headquartered in Lenzburg, Switzerland.
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