Discounted Cash Flow Calculation for BST:4CK 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.
BST:4CK 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.
Chikaranomoto HoldingsLtd's share price is below the future cash flow value, and at a moderate discount (> 20%).
Chikaranomoto HoldingsLtd'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
Chikaranomoto HoldingsLtd's earnings available for a low price, and how does
this compare to other companies in the same industry?
Chikaranomoto HoldingsLtd's earnings are expected to grow by 10.7% yearly, however this is not considered high growth (20% yearly).
Chikaranomoto HoldingsLtd's revenue is expected to grow by 9.5% 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.
Chikaranomoto HoldingsLtd'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
2/6, 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
Chikaranomoto HoldingsLtd's finances.
The net worth of a company is the difference between its assets and liabilities.
Chikaranomoto HoldingsLtd is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Chikaranomoto HoldingsLtd's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Chikaranomoto HoldingsLtd'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.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.8x debt.
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
Mr. Shigemi Kawahara has been President and Representative Director of Chikaranomoto Partners Co., Ltd. since November 2016. Mr. Kawahara has been Chairman, President and Representative Director of K.K. Watanabe Seimen since August 2016 and served as its Chief Executive Officer since January 2014. He has been Managing Director of Chikaranomoto Global Holdings Pte. Ltd. since November 2013. He serves as Chairman of Chikaranomoto Holdings Co.,Ltd. and has been its Chief Executive Officer since January 2014. Mr. Kawahara founded Ippudo Hong Kong Company Limited in 2011. He serves as a Director of Ippudo USA Holdings, Inc. He became interested in the restaurant and hospitality industry after graduating from college and consequently worked and trained in a number of European restaurants in Japan. In 1979, Mr. Kawahara opened his first restaurant and bar. He opened the first IPPUDO, with seating for ten, in his hometown in October 1985.
Insufficient data for Shigemi to compare compensation growth.
Insufficient data for Shigemi to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Chikaranomoto HoldingsLtd management team is about average.
Chikaranomoto Holdings Co.,Ltd. operates restaurants in Japan and internationally. The company operates restaurants under the Ippudo, IPPUDO RAMEN EXPRESS, Five lines, Najima Minoru, Shiro store, Bread junction, PANDA EXPRESS, Inaba Udon, and Ichika Tachika brand names. It also conducts various events and technical guidance classes; manages a bakery shop; and offers education, training, and seminar administration services. In addition, the company manufactures and sells noodles; and soups, soup stock, and seasonings. Chikaranomoto Holdings Co.,Ltd. was founded in 1979 and is headquartered in Fukuoka, Japan.
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