Discounted Cash Flow Calculation for OTCPK:PACQ.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:PACQ.F DCF 1st Stage: Next 10 year cash flow forecast
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
Prime Acquisition'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 Prime Acquisition 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 Real Estate industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Prime Acquisition's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Prime Acquisition's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare Prime Acquisition's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if Prime Acquisition is high growth as no earnings estimate data is available.
Unable to determine if Prime 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.
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 Prime Acquisition's filings and announcements here.
Prime 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.
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.
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
Prime Acquisition's finances.
The net worth of a company is the difference between its assets and liabilities.
Prime Acquisition's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Prime Acquisition's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Prime 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.
Prime Acquisition has negative shareholder equity (liabilities exceed assets) therefore debt is not 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. Tsu-Cheng Yu, also known as William, has been Interim Chief Executive Officer of Prime Acquisition Corp. since May 8, 2014. Mr. Yu served as the President of Prime Acquisition Corp. since April 2010 until September 30, 2013 and its Chief Financial Officer since February 24, 2010 until September 30, 2013. He served as the Principal Accounting Officer at Prime Acquisition Corp. He has been Managing Partner of Cansbridge Capital since July 2000. Mr. Yu has been a General Partner of the Shodan Company since February 2010. Mr. Yu served as the Chief Financial Officer of Spring Creek Acquisition Corp. since October 2007. He served as the Chief Financial Officer of AutoChina International Ltd. From October 2009 to January 2010, He served as Chief Financial Officer and Chief Operating Officer of Optoplex Corporation. From July 2006 to October 2008, he served as a special advisor to the Chief Executive Officer of Optoplex Corporation. From February 2002 to August 2003, he served as the Chief Financial Officer of Telos Technology Corp. Mr. Yu Co-founded Intrinsyc Software Inc., and served in various capacities including Chief Financial Officer, Executive Vice President and Chief Operating Officer from July 1996 to November 2002. From August 1994 to May 1996, he served as an Associate in the Asia Pacific corporate finance group of Marleau, Lemire Securities, Inc. From July 1991 to August 1994, he served as an Investment Portfolio Manager at Discovery Enterprises Inc. He previously worked with China-Canada Investment and Development and the Lawson Mardon Group. He has also served in various capacities with the Monte Jade Science and Technology Association, a non-profit organization supporting entrepreneurship and investment in technology companies in North America and Asia. He has been Director of Prime Acquisition Corp. since February 4, 2010. He served as a Director of Abebooks, Inc. from 2001 to 2008. Mr. Yu served as a director of Optoplex Corporation from April 2004 to January 2010. He served as a Director of Spring Creek Acquisition Corp. since October 2007. He served as a Director of Optoplex. He served as a Director of AutoChina International Ltd. until April 8, 2009. He served as Director of Intrinsyc Software Inc. from July 1996 to November 2002. Mr. Yu earned a BS in Mechanical Engineering with Honors and an MBA with Honors from Queen’s University in Canada.
William's compensation has been consistent with company performance over the past year, both up more than 20%.
William's remuneration is lower than average for companies of similar size in United States of America.
Prime Acquisition Corp. owns and operates real estate properties in Italy. Its property portfolio comprises office, commercial, and industrial properties. The company was founded in 2010 and is based in Shijiazhuang, the People’s Republic of China.
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.