Discounted Cash Flow Calculation for DB:1SP 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:1SP DCF 1st Stage: Next 5 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.
Surgery Partners's share price is below the future cash flow value, and at a moderate discount (> 20%).
Surgery Partners'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
Surgery Partners's earnings available for a low price, and how does
this compare to other companies in the same industry?
Surgery Partners's earnings are expected to grow significantly at over 20% yearly.
Surgery Partners's revenue is expected to grow by 7.5% 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.
Surgery Partners'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
0/6, 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
Surgery Partners's finances.
The net worth of a company is the difference between its assets and liabilities.
Surgery Partners is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Surgery Partners's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Surgery Partners'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.
Debt is not covered by short term assets, assets are 0.2x 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. Wayne Scott DeVeydt has been the Chief Executive Officer and Director of Surgery Partners, Inc. since January 4, 2018. Mr. DeVedyt served as a Senior Advisor to the Global Healthcare division of Bain Capital Private Equity, LP, the investment advisor of BCPE Seminole Holdings LP, the Company's controlling shareholder, from January 2017 until January 3, 2018. Mr. DeVeydt is also on the board of directors of Grupo Notre Dame Intermedica. Mr. DeVeydt served as the Chief Financial Officer and Executive Vice President of Anthem, Inc (formerly, WellPoint Inc.) from May 31, 2007 to May 31, 2016. Mr. DeVeydt served as the Head of Investor Relations at WellPoint Inc. since January 25, 2006 and also served as its Chief Staff Officer from 2006 to 2007. He served as a Senior Vice President and Chief Accounting Officer of Wellpoint Inc., since joining in March 16, 2005. Prior to joining Wellpoint Inc., in 2005, he served with PricewaterhouseCoopers LLP (public accounting firm) in many roles since 1996. He was a Partner at PricewaterhouseCoopers LLP. He was a Lead Engagement Partner for a number of large, national managed care and insurance companies including WHN. He served as a Financial Services Site Leader for both the St. Louis and Southern Illinois markets. Mr. DeVeydt has been a Member of Board of Governors at Boys & Girls Clubs of America, Inc. since January 2015. He has been an Independent Director of NiSource Inc. since March 22, 2016. He served as Non-Executive Director of Myovant Sciences Ltd. since September 2016 until July 23, 2018. He serves as Director of Indiana Health Information Exchange, Inc. He served as Director of BCS Financial Corporation until June 13, 2016. He also sits on the board of U.S. Chamber of Commerce and Cancer Support Community. He served as a Board Member of The Children's Museum of Indianapolis. He served as a Board Member for the YMCA of Greater Indianapolis. Mr. DeVeydt received a B.S. in business administration in Accounting from the University of Missouri in St. Louis.
Insufficient data for Wayne to compare compensation growth.
Insufficient data for Wayne 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 average tenure for the Surgery Partners management team is less than 2 years, this suggests a new team.
Executive VP & Chief Legal Officer
Consultant & Director
CEO & Director
Senior Vice President of Operations
Executive VP & Chief Human Resources Officer
Senior VP & Chief Development Officer
Executive VP and Chief Strategy & Transformation Officer
Senior VP & Chief Clinical Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Surgery Partners board of directors is less than 3 years, this suggests a new board.
Surgery Partners, Inc., through its subsidiaries, operates surgical facilities in the United States. The company operates through three segments: Surgical Facility Services, Ancillary Services, and Optical Services. Its surgical facilities comprise ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including gastroenterology, general surgery, ophthalmology, orthopedics, and pain management. The company’s surgical hospitals also provide ancillary services, such as diagnostic imaging, pharmacy, laboratory, obstetrics, oncology, physical therapy, and wound care; and a suite of ancillary services, which consist of a diagnostic laboratory, multi-specialty physician practices, urgent care facilities, anesthesia services, and optical services. It also operates optical laboratory that manufactures eyewear. As of March 12, 2018, the company operated approximately 180 locations in 32 states, including ambulatory surgery centers, surgical hospitals, a diagnostic laboratory, multi-specialty physician practices, and urgent care facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.
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