Discounted Cash Flow Calculation for DB:2KX using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method. We use
analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:2KX DCF 1st Stage: Next 5 year cash flow forecast
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
KLX's earnings available for a low price, and how does
this compare to other companies in the same industry?
KLX's earnings are expected to grow significantly at over 20% yearly.
KLX's revenue is expected to grow by 5.4% yearly, however this is not considered high growth (20% yearly).
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.
KLX'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
Aerospace & Defense
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
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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
Mr. Amin J. Khoury has been the Chairman and Chief Executive Officer at KLX Inc. since December 2014. Mr. Khoury serves as an Advisor at D2K Equity Partners, LLC. Mr. Khoury co-founded B/E Aerospace Inc., in July 1987 and served as its Executive Chairman of the Board since December 17, 2014 until April 13, 2017. He served as the Chairman of B/E Aerospace Inc., July 1987. He served as the Chief Executive Officer at B/E Aerospace Inc. from July 1987 to April 1, 1996 and again from December 31, 2005 to December 31, 2013. Mr. Khoury also served as the Co-Chief Executive Officer of B/E Aerospace from January 1, 2014 to December 16, 2014. He founded Taghleef Industries Inc (formerly Applied Extrusion Technologies Inc.) and served as its Chairman from October 1986 to March 2005, Chief Executive Officer since October 2002 and President from August 1988 to November 1992. He co-founded Advanced Thermal Sciences Corporation and served as its Chief Executive Officer since July 2000. He serves as the Chairman of Advanced Thermal Sciences Corporation. He has been a Director at KLX Inc. since July 2014. He served as a Director of Advanced Thermal Sciences Corporation. He served as an Independent Director of Brooks Automation Inc., from July 1994 to May 17, 2006 and its Lead Independent Director until May 17, 2006. He served as a Non-Executive Director at Synthes Inc., from 1986 to April 2012. He served as a Director at Johnson & Johnson. He served as a Director of B/E Aerospace Inc. since 1987 until April 13, 2017. He served as a Director of Taghleef Industries Inc., since October 1986. He has been a Trustee of the Scripps Research Institute since May 2008 until July 2014. Mr. Khoury holds a Masters Professional Director Certification from the American College of Corporate Directors and an Advanced Director Certification from the Corporate Directors Group. He received Northeastern’s prestigious Medallion Achievement Award. He has founded and/or developed companies in the scientific instrument, medical services, medical devices, aerospace and semi-conductor process equipment businesses. He received an M.B.A. with distinction and holds an M.Sc. and a B.Sc. degree in Chemistry from Northeastern University.
Amin's compensation has been consistent with company performance over the past year.
Amin's remuneration is higher 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 KLX management team is about average.
Chairman & CEO
President & COO
VP, CFO & Treasurer
VP & GM of Aerospace Solutions Group
Director of Investor Relations
VP of Finance & Corporate Controller
VP of Finance & Treasurer
VP & GM of Energy Services Group
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the KLX board of directors is about average.
KLX Inc., together with its subsidiaries, provides aerospace fasteners, consumables, and logistics services worldwide. The Aerospace Solutions Group segment distributes bolts, clips, hinges, rings, screws, carbon-faced seals, gaskets, O-rings, and others; chemicals, sealants and adhesives, lubricants, paints, cleaners, and degreasers; Honeywell proprietary parts; bearings, tooling, electrical components, and clamps; and hydraulics, pneumatics, fluid connectors, filtration, electrical control systems seals, and compressors and engineered systems. This segment also provides inventory management services and technical support services, as well as operates an e-commerce site that provides customized solutions for customers. It serves commercial airlines; business jet and defense original equipment manufacturers and their subcontractors; airlines; maintenance, repair, and overhaul operators; fixed base operators; and military depots. The Energy Services Group segment offers fishing (retrieval) services and equipment; wireline services, including composite frac plug pump downs, pipe recovery and perforation, and evaluation and logging services; pressure control services and rental equipment; and onshore completion services, such as placement and removal of flow control nipples and valves, completion packers, bridge plugs, and composite flow through frac plugs, as well as downhole services tools. This segment also provides down-hole completion and production services; and mobile, customizable workforce accommodations and offices, and associated rental equipment to its customers at their remote field locations. In addition, it offers machine shop services, which consist of CNC lathes, milling machines, spindle lathes, and other machining equipment to rework and rectify damaged equipment, as well as to design/build specialized fit-for-purpose tools. It primarily serves regional or independent oil companies. KLX Inc. is headquartered in Wellington, Florida.
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