Discounted Cash Flow Calculation for OTCPK:SRXX.F using Excess Returns Model Model
The calculations below outline how an intrinsic value for SPARX Group 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
SPARX Group'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 SPARX Group 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
expected to grow at an
Unable to compare SPARX Group's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare SPARX Group's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare SPARX Group's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if SPARX Group is high growth as no earnings estimate data is available.
Unable to determine if SPARX Group 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.
While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access SPARX Group's filings and announcements here.
SPARX 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.
has a total score of
3/6, 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. Shuhei Abe is the Founder of SPARX Asset Management Co., Ltd and has been President and Chief Executive Officer at SPARX Group Co., Ltd., since October 2006 and April 2011 respectively. Previously, he founded Abe Capital Research, in 1985, where he managed Japanese equity investments for U.S. and European investors. Prior to that, Mr. Abe worked in Japanese equity sales at Nomura Securities International. He served as the President, Chief Executive Officer, Chief Investment Officer, Portfolio Manager and Chairman of SPARX Asset Management Co., Ltd. He served as President, Chief Executive Officer, Chief Investment Officer and Representative Director at LO Funds - Japanese Small and Mid Caps. He served as Chairman of SPARX Group Co., Ltd since December 2008 and has been its Director since June 1989. He began his career as an analyst at Nomura Research Institute. Mr. Abe holds an M.B.A. from Babson College and a B.A. in Economics from Sophia University.
Insufficient data for Shuhei to compare compensation growth.
Insufficient data for Shuhei to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Chief Executive Officer
Group Executive Officer and Head of Corporate Division
Group Executive Officer & Representative Director
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the SPARX Group board of directors is about average.
SPARX Group Co., Ltd. is a publicly owned asset management holding company. Through its subsidiaries, it offers asset management and investment advisory services. It invests in real estate. The firm primarily provides its services to corporate pension annuities, government entities, private and trust banks, and public pension funds. SPARX Group Co., Ltd. was founded on July 1, 1989 and is based in Tokyo, Japan.
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