Discounted Cash Flow Calculation for DB:A3B 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 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.
DB:A3B DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
ACCO Brands's share price is below the future cash flow value, and at a moderate discount (> 20%).
ACCO Brands's share price is below the future cash flow value, and 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
is considered below, and whether this is a fair price.
Price based on past earnings
ACCO Brands's earnings available for a low price, and how does
this compare to other companies in the same industry?
ACCO Brands's earnings are expected to grow by 10.2% yearly, however this is not considered high growth (20% yearly).
ACCO Brands'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.
ACCO Brands'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.
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. Boris Y. Elisman has been the President of ACCO Brands Corporation since December 2010 and has been its Chief Executive Officer since March 31, 2013. Mr. Elisman served as the President of Kensington Technology Group since November 2004. Mr. Elisman served as the President of Americas Operation art ACCO Brands Corporation from October 2008 to January 10, 2011. He is a 15-year veteran. He served as an Executive Vice President of ACCO Brands Corporation. He served as the President of Kensington Computer Products Group at ACCO Brands Corporation since 2005. He served as President of Global Office Products Group of ACCO Brands Corp. from April 2008 to October 2008. He served as the President of Kensington Computer Accessories from November 2004 to August 2005. Mr. Elisman served as Vice President of Marketing and Sales for Supplies Business Unit, Imaging and Printing Supplies Organization (IPS) from 2003 to November 2004, where he was responsible for leading the IPS marketing function across the regions and divisions, as well as management and execution of marketing, communication and customer insight programs. He served as a Vice President and General Manager of Emerging Businesses Organization of Hewlett-Packard Corporation from 2001 to 2003, was responsible for leading the creation and development of new technology businesses. He also served as Group Marketing Manager of Embedded and Personal Systems Organization of Hewlett-Packard Corporation. Prior to joining Hewlett-Packard Corporation in 1989, he served as a Member of the Technical Staff at&T Bell Laboratories. He has been the Chairman of ACCO Brands Corporation since May 11, 2016 and has been its Director since March 31, 2013. His undergraduate and graduate degrees are from Brown University and he holds a Master's Degree in Business Administration from Stanford University Graduate School of Business.
Boris's compensation has been consistent with company performance over the past year.
Boris'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 average tenure for the ACCO Brands management team is over 5 years, this suggests they are a seasoned and experienced team.
Executive VP & CFO
Executive VP & President of ACCO Brands North America
Executive VP & President of ACCO Brands EMEA
Senior Vice President of Global Products & Operations
Senior VP & Chief Information Officer
Vice President of Investor Relations
Vice President of Corporate Communications
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the ACCO Brands board of directors is about average.
ACCO Brands Corporation designs, manufactures, and markets consumer and business products. It operates through three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International. The company offers school notebooks, calendars, janitorial supplies, and whiteboards; storage and organization products, such as three-ring and lever-arch binders, sheet protectors, and indexes; laminating, binding, and shredding machines, as well as related consumable supplies; writing instruments; stapling and punching products; do-it-yourself tools; and computer accessories and others used in schools, homes, and businesses. It offers its products primarily under the AT-A-GLANCE, Five Star, GBC, Hilroy, Kensington, Mead, Quartet, Swingline, Derwent, Esselte, Leitz, NOBO, Rapid, Rexel, Artline, Barrilito, Marbig, Tilibra, and Wilson Jones brands. The company markets and sells its products through various channels, including mass retailers; e-tailers; discount, drug/grocery, and variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; wholesalers; and contract stationers, as well as sells products directly to commercial and consumer end-users through its e-commerce platform and direct sales organization. ACCO Brands Corporation is headquartered in Lake Zurich, Illinois.
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