The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in Canada, Alaska, the South Pacific, and the Caribbean.
The last earnings update was 36 days ago.
Discounted Cash Flow Calculation for OTCPK:NNWW.F 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.
OTCPK:NNWW.F 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.
North West's share price is below the future cash flow value, and at a moderate discount (> 20%).
North West'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
North West's earnings available for a low price, and how does
this compare to other companies in the same industry?
North West's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
North West's revenue is expected to grow by 3.8% 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.
North West'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
5/6, 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. Edward S. Kennedy has been the Chief Executive Officer and President of The North West Company Inc., since 1997 and its Executive since 1989 and serves as its Director since 1996. Mr. Kennedy has been the Chief Executive Officer and Chairman of Alaska Commercial Co. since 1997. Mr. Kennedy serves as the Chairman and Chief Executive Officer at Cost-U-Less, Inc. He served as the Chief Executive Officer, President and Chairman of International Operations at North West Company Inc. He served as Chairman & Chief Executive Officer of AC from 1995 to 1997 and also served as its President. Mr. Kennedy is a Canadian Top 40 under 40 recipient in 1999 and is active in Aboriginal economic development initiatives. Mr. Kennedy served as an Executive Vice-President and Chief Operating Officer of The North West Co. Inc. (NWC) from 1993 to 1995. He also served as its Vice-President of Corporate Development, Counsel and Secretary of NWC from 1989 to 1993. He served as Chairman of North West Company. He has been a Director of North West Company Inc. since 1996. He serves as a Member of Advisory Board at University of Western Ontario, Ivey School of Business. Mr. Kennedy has been a Trustee of North West Co. Fund since 2005. Mr. Kennedy serves as a Director of Balmoral Hall School, Alaska Commercial Co., Northwest Transport Ltd., Transport Nanuk Inc., The Conference Board of Canada and Business Council of Manitoba. He served as a Director of Norcraft Companies, Inc. from November 04, 2014 to May 12, 2015. He served as a Trustee of North West Company since 1996. Mr. Kennedy holds a Honours Bachelor of Arts in Business Administration from University of Western Ontario and Bachelor of Laws from Osgoode Hall Law School.
Edward's compensation has been consistent with company performance over the past year.
Edward's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the North West management team is less than 2 years, this suggests a new team.
Executive VP & CFO
President of International Retail
Executive VP & Chief Corporate Officer
Executive VP & Chief Development Officer
VP of Legal & Corporate Secretary
Vice President of Human Resources
Executive Vice President of Canadian Food Procurement & Marketing
President of Canadian Retail
President of North Star Air Ltd.
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the North West board of directors is about average.
The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in Canada, Alaska, the South Pacific, and the Caribbean. The company’s Canadian operations comprise 117 Northern stores, which offers food, financial services, and general merchandise; 5 NorthMart stores that provides fresh foods, apparel, and health products and services; 44 Giant Tiger junior discount stores, which offers family fashion, household products, and food; 22 Quickstop convenience stores that provides ready-to-eat foods, and fuel and related services; 1 Solo Market store for rural market; 1 Valu Lots discount center and direct-to-customer food distribution outlet; 2 Pharmacy and Convenience stores; and 1 North West Company Fur Marketing outlet that offers wild furs, handicrafts, and authentic Canadian heritage products. The Canadian operations also provides contract tele-pharmacist services to rural hospitals and health centers; water and air-based transportation services; and produce and fresh meats to independent grocery stores. Its International operations include 27 Alaska Commercial Company stores that provides food and general merchandise to remote and rural regions; 11 Cost-U-Less mid-size warehouse stores, which offers discount food and general merchandise; 1 Cost-U-Less Express store that provides fresh and prepared foods; 5 Quickstop convenience stores; 7 Riteway food markets; and 1 Cash and Carry store. In addition, the company offers physician services; healthcare solutions; and airline cargo and passenger services. The North West Company Inc. was founded in 1668 and is headquartered in Winnipeg, Canada.
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