Discounted Cash Flow Calculation for NasdaqCM:LCA using Excess Returns Model Model
The calculations below outline how an intrinsic value for Landcadia Holdings 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.
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
Landcadia Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Landcadia Holdings's earnings are expected to grow significantly at over 20% yearly.
Unable to determine if Landcadia Holdings is high growth as no revenue estimate data is available.
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.
Landcadia Holdings'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
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
Landcadia Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Landcadia Holdings's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Landcadia Holdings's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Landcadia Holdings'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 0.9x 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. Tilman J. Fertitta has been Co-Chairman and Chief Executive Officer of Landcadia Holdings, Inc. since September 15, 2015. Mr. Fertitta has been Chairman and Chief Executive Officer of Fertitta Entertainment, Inc. since August 2010. He has been President of Morton's Restaurant Group, Inc. since February 2012. He is the Owner of Golden Nugget Atlantic City, LLC. Mr. Fertitta serves as the President of Fertitta Hospitality, Inc. He has been the Chief Executive Officer and President of Landry's, Inc. (also known as Landry's Restaurants Inc.) since 1987 and also serves as its Chairman of the Board. He serves as President of T-Rex Cafe, Inc. Mr. Fertitta serves as Chief Executive Officer and President at Landry's Holdings, Inc. Mr. Fertitta serves as the Chairman of the Board, President and Chief Executive Officer of Golden Nugget, Inc. He was a Limited Partner of Houston NFL Holdings, LP. Mr. Fertitta has been Director of Landry's Restaurants Inc. since 1993 and McCormick & Schmick's Seafood Restaurants, Inc. since January 03, 2012. He serves as Chairman of the Houston Children’s Charity and the Houston Police Foundation. He serves as the Chairman of the Board of Regents for the University of Houston. Mr. Fertitta serves on the boards of the Houston Livestock Show and Rodeo, Space Center Houston, the Museum of Fine Arts, Texas Heart Institute and the Greater Houston Partnership and Visitor's Bureau, the Better Business Bureau of Houston, the Childress Foundation and the National Forest Foundation. He is a Minority Partner in the Houston Texans National Football League team. Mr. Fertitta has been frequently featured in the nation's top financial and industry publications. He is a frequent guest of prominent national business programs on networks like CNBC and Fox Business News. He is one of the foremost authorities in the dining, hospitality, entertainment and gaming industries. Mr. Fertitta's many personal honors include receiving the Houston Entrepreneur of the Year Award from Ernst & Young and induction into the Texas Business Hall of Fame as the second-youngest inductee. In 2012, he was named Amusement Today's Person of the Year, in 2013, he was named Casino Journal's Executive of the Year and in 2015, he was named to Nation's Restaurant News's Power List for 2015. Mr. Fertitta debuted on the Forbes 400 list in 2012.
Insufficient data for Tilman to compare compensation growth.
Insufficient data for Tilman to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Landcadia Holdings management team is about average.
Co-Chairman & CEO
Co-Chairman & President
VP & CFO
VP, General Counsel & Secretary
Vice President of Acquisitions
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Landcadia Holdings board of directors is less than 3 years, this suggests a new board.
Should You Be Concerned About Landcadia Holdings Inc's (NASDAQ:LCA) Shareholders?
For example, an active institutional investor may be more likely to hold a company accountable for certain actions whereas a passive fund will move in and out of stocks without regards to corporate governance. … For LCA shareholders, the potential of this type of share price volatility shouldn't be as concerning as hedge fund ownership is is not significant,indicating few chances of such sudden price moves. … Thus, potential investors should look into these business relations and check how it can impact long-term shareholder returns.Next Steps: LCA's considerably high level of institutional ownership calls for further analysis into its margin of safety.
Why Landcadia Holdings Inc's (NASDAQ:LCA) Ownership Structure Is Important
Today, I will be analyzing Landcadia Holdings Inc’s (NASDAQ:LCA) recent ownership structure, an important but not-so-popular subject among individual investors. … Public Company Ownership Another important group of owners for potential investors in LCA are other public companies that hold a stake of 41.24% in LCA. … Thus, potential investors should look into these business relations and check how it can impact long-term shareholder returns.What this means for you: The company's high institutional ownership makes margin of safety a very important consideration to existing investors since long bull and bear trends often emerge when these big-ticket investors see a change in long-term potential of the company.
Landcadia Holdings, Inc. does not have significant business operations. It focuses to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization, or similar business combination with one or more businesses. It intends to identify a business opportunity in the dining, hospitality, entertainment, and gaming industries in the United States. The company was formerly known as Leucadia Development Corporation and changed its name to Landcadia Holdings, Inc. in September 2015. Landcadia Holdings, Inc. was founded in 2008 and is based in Houston, Texas.
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.