Discounted Cash Flow Calculation for LSE:0R9H using Excess Returns Model Model
The calculations below outline how an intrinsic value for Banca Sistema 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.
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.
Banca Sistema's share price is below the future cash flow value, and at a moderate discount (> 20%).
Banca Sistema's share price is below the future cash flow value, but not 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
Banca Sistema's earnings available for a low price, and how does
this compare to other companies in the same industry?
Banca Sistema's earnings are expected to grow by 10.9% yearly, however this is not considered high growth (20% yearly).
Banca Sistema's revenue is expected to grow by 12.1% 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.
Banca Sistema'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.
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
Dr. Gianluca Garbi has been the Chief Executive Officer of Banca Sistema S.p.A. since April 22, 2014 and has been its General Manager since April 22, 2014 and serves as its Managing Director. Dr. Garbi served as Managing Director and Head of Global Public Sector of Dresdner Kleinwort since July 2007. Dr. Garbi was responsible for coordinating the existing activities of the bank in the public sector space and taking it to the next level across all the product areas and regions. He served as Chief Executive Officer of EuroMTS Ltd. for MTS España and MTS Inc. He served as the Chairman and Member of Management Board of EuroMTS Ltd. He served as Chief Executive Officer, Chairman and Member of Management Board of MTS S.p.A and BondVision. Dr. Garbi was responsible for the operations of the MTS Group of companies in Europe, collectively known as the "European Bond Exchange" and of BondVision. Under his direction, the MTS Group has become the leading electronic fixed income market with the most extensive network in Europe and with daily average volumes at €85 billion for MTS and €3 billion for BondVision. He led the MTS Group of companies in its continuous expansion. He served as Head of Tax Planning of JP Morgan from 1994 to 1995. He served positions at Banque Paribas, in charge of Agency services and American Depository Receipt contracts from 1995 to 1997. He serves as a Director of Banca Sistema S.p.A. He served as a Member of the Council of Economic Advisers. He was involved in forging the direction of macro-economic and issuance policies of the Italian Treasury from 1997 to 1998. Dr. Garbi was Lecture at the John Hopkins University, the London Business School, SAID University, Oxford, Università di Tor Vergata and Università Cattolica di Sacro Cuore, Milan. He has a Degree in Economics and Business from Università Cattolica del Sacro Cuore.
Gianluca's compensation has increased by more than 20% in the past year.
Gianluca's remuneration is lower than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure
Average tenure of the
management team in years:
The tenure for the Banca Sistema management team is about average.
Head of Finance & CFO
Head of Operations & COO
Carlo Di Pierro
Head of Investor Relations
Head of Commercial Division
Deputy Head of Commercial Division
Head of Media Relations
Head of Internal Audit
Head of Credit
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Banca Sistema board of directors is less than 3 years, this suggests a new board.
Banca Sistema S.p.A. provides various banking products and services to companies and private customers in Italy. The company operates Factoring and Banking segments. It engages in financing and managing trade receivables owed by the Italian Public Administrations. The company offers current accounts, time deposits, securities deposit, salary and pension backed loans, guarantees, and pawnbroking services. It also provides recourse, non-recourse, maturity, and reverse factoring services; certification of public administration credits; and VAT refunds. In addition, the company engages in the purchase and management of non-performing financial and trade receivables, as well as management and debt recovery from individual. Banca Sistema S.p.A. was founded in 2011 and is based in Milan, Italy.
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