Discounted Cash Flow Calculation for OTCPK:HLMA.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:HLMA.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
Halma's earnings available for a low price, and how does
this compare to other companies in the same industry?
Halma's earnings are expected to grow by 8.3% yearly, however this is not considered high growth (20% yearly).
Halma's revenue is expected to grow by 6.2% 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.
Halma'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
4/6, 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. Andrew J. Williams has been the Group Chief Executive Officer of Halma plc since February 2005 and has been Member its Executive Board since April 2002. Mr. Williams serves as Chief Executive of a FTSE 250 company. He has been an Executive Director of Halma Plc since July 13, 2004. He served as Deputy Chief Executive of Halma plc from December 1, 2004 to March 1, 2005. He joined Halma PLC in 1994 as Manufacturing Director of Reten Acoustics (now Palmer Environmental) and served as its Managing Director since 1997. Mr. Williams served as an Assistant Divisional Chief Executive of the Optics and Water Instrumentation Division since 2001. He served as the Chief Executive Officer of the Optics and Water Instrumentation Division at Halma plc since 2002. He has been Non-Executive Director of Capita Health and Wellbeing Limited since January 2015. He has been a Non-Executive Independent Director of Capita plc since January 1, 2015. He has been a Non-Executive Director at Capita Business Services Ltd. since January 2015. Mr. Williams is a Chartered Engineer and is a Production Engineering graduate of Birmingham University. He attended the Advanced Management Program at Wharton Business School, University of Pennsylvania in 2004.
Andrew's compensation has increased by more than 20% in the past year.
Andrew'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 Halma management team is about average.
Chief Executive of Medical & Environmental Sectors
Group Talent & Communications Director
Group CFO & Executive Director
Chief Executive of Infrastructure Safety Sector & Member of Executive Management Board
Chief Innovation & Digital Officer and Member of Executive Board
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Halma board of directors is about average.
Board of Directors
Chief Executive of Medical & Environmental Sectors
Halma plc provides process and infrastructure safety, medical, and environmental and analysis products worldwide. Its Process Safety segment offers safety systems for warehousing and hazardous industrial processes; gas detection instruments; pressure management products; interlocking systems for safeguarding dangerous machines; pipeline corrosion monitoring products and systems; and process safety systems. The company’s Infrastructure Safety segment provides networked fire detectors and control panels; smoke and heat detectors, sounders, beacons, and interfaces; wireless and wired fire detection devices; solutions for people and vehicle flow; flame detectors, beam smoke detectors, and specialist fire extinguishing systems; automatic fire detection and suppression systems; and electronic security systems and signaling products. Its Medical segment offers mechanical and fluidic components; ophthalmic diagnostic and surgical equipment, and pharmaceutical products; peristaltic, syringe, piston, and gear pumps; miniature valves, micro pumps, and fluid components; real-time location systems; specialized components and fluid transfer subassemblies; diagnostic medical devices; clinical grade non-invasive blood pressure monitoring products and technologies; and lenses as aids to diagnosis and surgery. The company’s Environmental & Analysis segment provides mass flow meters and controllers, and pressure controllers; ultraviolet disinfection and water treatment systems; optical and high temperature metallized fibers; multispectral and digital imaging systems; multi-utility M2M solutions; equipment and software to monitor and analyze water cycle; radiometric and photometric systems and software; spectrometers and spectral sensors; water and environmental analysis equipment; moisture management products; electrochemical sensors; opto-electronic solutions; and camera systems and devices. Halma plc was founded in 1894 and is headquartered in Amersham, the United Kingdom.
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