Leon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada.
The last earnings update was 52 days ago.
Discounted Cash Flow Calculation for OTCPK:LEFU.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:LEFU.F DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Leon's Furniture's share price is below the future cash flow value, and at a moderate discount (> 20%).
Leon's Furniture's share price is below the future cash flow value, but not at a substantial discount (< 40%).
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
Leon's Furniture's earnings available for a low price, and how does
this compare to other companies in the same industry?
Leon's Furniture's earnings are expected to grow by 5% yearly, however this is not considered high growth (20% yearly).
Leon's Furniture's revenue is expected to grow by 1.4% yearly, however this is not considered high growth (20% yearly).
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.
Leon's Furniture'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
Leon's Furniture's finances.
The net worth of a company is the difference between its assets and liabilities.
Leon's Furniture is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Leon's Furniture's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Leon's Furniture'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.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 3.3x 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. Edward Florian Leon has been Chief Executive Officer at Leon's Furniture Ltd. since October 1, 2018. Mr. Leon has been President of Leon's Furniture Ltd. since June 17, 2015 and served as its Chief Operating Officer since June 2015 until October 1, 2018. Mr. Leon served as Vice President of Merchandising of Leon's Furniture from May 2002 to June 17, 2015. Mr. Leon served as Director of Merchandising at Leon's Furniture Ltd. He has been a Director of Leon's Furniture Ltd. since 2001.
Edward's compensation has been consistent with company performance over the past year.
Edward's remuneration is about average for companies of similar size in United States of America.
Management Team Tenure
Average tenure of the
management team in years:
The tenure for the Leon's Furniture management team is about average.
CEO, President & Director
Chief Financial Officer
President of the Leon's Division
President of the Brick Division
VP of Legal & Corporate Secretary
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Leon's Furniture board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors
CEO, President & Director
Peter B. Eby
Who owns this company?
Recent Insider Trading
More shares have been bought than sold by Leon's Furniture insiders in the past 3 months.
Leon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada. The company also operates as a commercial retailer of appliances to builders, developers, hotels, and property management companies. It also offers household furniture, electronics, and appliance repair services; and insurance products. The company sells its products through a network of 303 retail stores under the Leon’s, The Brick, The Brick Mattress Store, and The Brick Outlet banners, as well as through Websites comprising leons.ca, thebrick.com, and furniture.ca. Leon's Furniture Limited was founded in 1909 and is headquartered in Toronto, Canada.
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.