Discounted Cash Flow Calculation for AMEX:GRF using Excess Returns Model Model
The calculations below outline how an intrinsic value for Eagle Capital Growth Fund 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
Eagle Capital Growth Fund
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
Eagle Capital Growth Fund's
is considered below, and whether this is a fair price.
Price based on past earnings
Eagle Capital Growth Fund's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Eagle Capital Growth Fund has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Capital Markets industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Eagle Capital Growth Fund
expected to grow at an
Unable to compare Eagle Capital Growth Fund's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Eagle Capital Growth Fund's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare Eagle Capital Growth Fund's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if Eagle Capital Growth Fund is high growth as no earnings estimate data is available.
Unable to determine if Eagle Capital Growth Fund 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.
Eagle Capital Growth Fund'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.
Eagle Capital Growth Fund
has a total score of
0/6, 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
Eagle Capital Growth Fund's finances.
The net worth of a company is the difference between its assets and liabilities.
Eagle Capital Growth Fund is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Eagle Capital Growth Fund has no long term commitments.
This treemap shows a more detailed breakdown of
Eagle Capital Growth Fund'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.
Eagle Capital Growth Fund 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.
Mr. Luke Edward Sims serves as the Chairman of the Board and Manager at Sims Capital Management, L.L.C. Previously, Mr. Sims was working at Foley & Lardner LLP. Mr. Sims serves as the Chief Executive Officer and President of Eagle Capital Growth Fund, Inc. Mr. Sims retired in 2010 after spending 34 years at the firm. He was a Partner of the Eagle Capital Growth Fund since 1984 and also served as its Attorney since 1976. Mr. Sims’s specialties included securities law, mergers and acquisitions (including leveraged buyouts), private equity and corporate law generally. From 1997 through 2004, he headed the national transactional and securities practice group, which covers securities laws, mergers and acquisitions, tender offers, takeover defense and corporate law generally. He has been a Director of Eagle Capital Growth Fund, Inc. since 2002. Mr. Sims serves as a Director of Wilson-Hurd Mfg. Co. and Notre Dame Middle School Inc. He is also a Director of a privately held company. Mr. Sims served as an Independent Director of Lacrosse Footwear Inc. from December 1985 to October 28, 2009. He was regularly included in The Best Lawyers in America in the fields of corporate law, leveraged buyouts and private equity law, mergers and acquisitions and securities law and in Chambers USA: America’s Leading Business Lawyers. While at Georgetown Law School, Mr. Sims was active with the Georgetown Law Journal as a staff member, author, editor and a Member of the Executive Board. He received his undergraduate (1972) and legal education (1976) at Georgetown University.
Insufficient data for Luke to compare compensation growth.
Insufficient data for Luke to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Chief Executive Officer
Chief Financial Officer
Board of Directors Tenure
Average tenure and age of the
Eagle Capital Growth Fund
board of directors in years:
The average tenure for the Eagle Capital Growth Fund board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Eagle Capital Growth Fund, Inc. is a closed-end equity mutual fund launched and managed by Sims Capital Management LLC. The fund invests in the public equity markets of the United States. It makes its investments in the stocks of companies operating across diversified sectors. The fund benchmarks the performance of its portfolio against the S&P 500 Index. It was previously known as NAIC Growth Fund, Inc. Eagle Capital Growth Fund, Inc. was formed on April 11, 1989 and is domiciled in the United States.
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.