Discounted Cash Flow Calculation for LSE:MCLS using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
McColl's Retail Group
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.
LSE:MCLS DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
McColl's Retail Group
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
McColl's Retail Group
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
McColl's Retail Group's share price is below the future cash flow value, and at a moderate discount (> 20%).
McColl's Retail Group'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
McColl's Retail Group's
is considered below, and whether this is a fair price.
Price based on past earnings
McColl's Retail Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
McColl's Retail Group's earnings are expected to grow by 7.4% yearly, however this is not considered high growth (20% yearly).
McColl's Retail Group's revenue is expected to grow by 2.5% 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.
McColl's Retail Group'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.
McColl's Retail Group
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.
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
McColl's Retail Group's finances.
The net worth of a company is the difference between its assets and liabilities.
McColl's Retail Group's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
McColl's Retail Group's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
McColl's Retail Group'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 covered by short term assets, assets are 1.2x 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. Jonathan Miller, FCA, has been the Chief Executive Officer at McColl's Retail Group plc since April 01, 2016 and was its Secretary. Mr. Miller served as the Chief Financial Officer at McColl's Retail Group plc since 2004. Mr. Miller has overall responsibility for financial performance and also oversees Finance, Buying, Marketing, Human Resources, Information Technology and Store Development. He joined McColl's Retail Group plc in 1991 and served as its Finance Director of the Retail Businesses since 1998. He has been an Executive Director of McColl's Retail Group plc since February 3, 2014. Mr. Miller trained as a Chartered Accountant with Deloittes.
Jonathan's compensation has been consistent with company performance over the past year, both up more than 20%.
Jonathan's remuneration is higher than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure
Average tenure of the
McColl's Retail Group
management team in years:
The tenure for the McColl's Retail Group management team is about average.
CEO & Executive Director
COO & Executive Director
CFO & Director
Head of Investor Relations
Board of Directors Tenure
Average tenure and age of the
McColl's Retail Group
board of directors in years:
The tenure for the McColl's Retail Group board of directors is about average.
What You Should Know About McColl's Retail Group plc's (LON:MCLS) Financial Strength
MCLS’s Debt (And Cash Flows) Over the past year, MCLS has reduced its debt from UK£157m to UK£127m , which also accounts for long term debt. … On top of this, MCLS has produced cash from operations of UK£62m over the same time period, resulting in an operating cash to total debt ratio of 49%, signalling that MCLS’s operating cash is sufficient to cover its debt. … At the current liabilities level of UK£221m, it seems that the business may not be able to easily meet these obligations given the level of current assets of UK£148m, with a current ratio of 0.67x.
What We Think Of McColl's Retail Group plc’s (LON:MCLS) Investment Potential
Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Return On Capital Employed (ROCE): What is it? … ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business.
Should Income Investors Look At McColl's Retail Group plc (LON:MCLS) Before Its Ex-Dividend?
On the 06 June 2019, McColl's Retail Group plc (LON:MCLS) will be paying shareholders an upcoming dividend amount of UK£0.006 per share. … Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine McColl's Retail Group's latest financial data to analyse its dividend characteristics. … Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Before You Buy McColl's Retail Group plc (LON:MCLS), Consider Its Volatility
If you're interested in McColl's Retail Group plc (LON:MCLS), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. … Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). … A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market.
What Does McColl's Retail Group plc's (LON:MCLS) Share Price Indicate?
McColl's Retail Group plc (LON:MCLS), which is in the consumer retailing business, and is based in United Kingdom,. … Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing? … Today I will analyse the most recent data on McColl's Retail Group’s outlook and valuation to see if the opportunity still exists
Should McColl's Retail Group plc (LON:MCLS) Be Part Of Your Dividend Portfolio?
Historically, McColl's Retail Group plc (LON:MCLS) has paid a dividend to shareholders. … Let's dig deeper into whether McColl's Retail Group should have a place in your portfolio. … Check out our latest analysis for McColl's Retail Group
How Much is McColl's Retail Group plc's (LON:MCLS) CEO Getting Paid?
Jonathan Miller has been the CEO of McColl's Retail Group plc (LON:MCLS) since 2016. … This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … How Does Jonathan Miller's Compensation Compare With Similar Sized Companies?
Does McColl's Retail Group plc's (LON:MCLS) P/E Ratio Signal A Buying Opportunity?
To keep it practical, we'll show how McColl's Retail Group plc's (LON:MCLS) P/E ratio could help you assess the value on offer. … Based on the last twelve months, McColl's Retail Group's P/E ratio is 5.18. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
How McColl's Retail Group plc (LON:MCLS) Can Impact Your Portfolio Volatility
If you're interested in McColl's Retail Group plc (LON:MCLS), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. … Beta is a widely used metric to measure a stock's exposure to market risk (volatility). … The first thing to understand about beta is that the beta of the overall market is one.
McColl's Retail Group plc (LON:MCLS)'s Return on Capital
and want a simplistic look at the return on McColl's Retail Group plc (LON:MCLS) stock. … Your equity share is granted in return for the capital provided to the business to operate, and in order for an investment to be successful the business has to create earnings from the funds that make up this capital. … Therefore, looking at how efficiently McColl's Retail Group is able to use capital to create earnings will help us understand your potential return.
McColl's Retail Group plc operates as a neighborhood retailer in the United Kingdom. The company operates convenience and newsagent stores that offer fruits and vegetables, milk, chilled foods, alcohol, confectionery, tobacco and e-cigarettes, canned and packaged grocery, soft-drinks, non-food, household, hot food-to-go, and newspapers, as well as provides post office and ATM services. As of November 26, 2017, it operated 1,611 neighborhood stores, including 1,279 McColl's branded convenience stores and 332 Martin’s branded newsagents stores in England, Scotland, and Wales. The company was founded in 1973 and is headquartered in Brentwood, the United Kingdom.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.