Discounted Cash Flow Calculation for NYSE:FPAC using Excess Returns Model Model
The calculations below outline how an intrinsic value for Far Point Acquisition 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
Far Point Acquisition
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
Far Point Acquisition's
is considered below, and whether this is a fair price.
Price based on past earnings
Far Point Acquisition's earnings available for a low price, and how does
this compare to other companies in the same industry?
Far Point Acquisition's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Unable to determine if Far Point Acquisition 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.
Far Point Acquisition'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.
Far Point Acquisition
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
Far Point Acquisition's finances.
The net worth of a company is the difference between its assets and liabilities.
Far Point Acquisition's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Far Point Acquisition's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Far Point Acquisition'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.
Far Point Acquisition has no debt, it does not need to be covered by short term assets.
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. Thomas W. Farley, also known as Tom, has been the Chairman, Chief Executive Officer and President of Far Point Acquisition Corporation since May 2018. Mr. Farley was the President of NYSE Holdings LLC (Alternate Name, NYSE Group) at Intercontinental Exchange, Inc. (alternative name, IntercontinentalExchange Group, Inc.) from May 2014 until May 25, 2018. Mr. Farley served as Group President at New York Stock Exchange LLC until May 25, 2018. He served as the Chief Operating Officer of NYSE at Intercontinental Exchange, Inc. since November 12, 2013 until May 2014. He served as Senior Vice President of Financial Markets and President of ICE Futures U.S., Inc. (formerly, New York Board of Trade Inc., (NYBOT)) of Intercontinental Exchange, Inc. since February 20, 2007. He served as the Chief Operating Officer of ICE Futures U.S., Inc. from February 20, 2007 to July 2011. Prior to NYBOT, he served as President of FIS Kiodex LLC, (formerly known as SunGard Kiodex LLC) from July 2006 to January 2007 and its Chief Financial Officer from October 2000 to July 2006 and Chief Operating Officer from January 2003 to July 2006. Prior to Kiodex, Mr. Farley held positions in investment banking and private equity. He worked for Gryphon Investors. He served as a Corporate Finance Investment Banker of Montgomery Securities. He serves as a Director of The Partnership for New York City, Inc. He served as Representative Director of The Options Clearing Corporation from March 12, 2014 to May 2018. He served as a Director of New York Board of Trade, Inc. and ICE Futures U.S., Inc. since February 2007. He holds a Bachelor of Arts in Political Science from Georgetown University and is a Chartered Financial Analyst.
Insufficient data for Tom to compare compensation growth.
Insufficient data for Tom to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
CFO & Director
Board of Directors Tenure
Average tenure and age of the
Far Point Acquisition
board of directors in years:
The average tenure for the Far Point Acquisition board of directors is less than 3 years, this suggests a new board.
Far Point Acquisition Corporation does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses in the financial technology, technology, or financial services industries. The company was founded in 2018 and is based in New York, New York.
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