Discounted Cash Flow Calculation for TSX:RET using Dividend Discount Model Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future dividends to their present value. This
approach is used for finance firms where free cash flow is difficult to estimate
(e.g. Banks/ Insurance firms).
If the firm does not pay the majority of its earnings out as a dividend this
method will often arrive at a value significantly lower than the share price.
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.
Reitmans (Canada)'s share price is below the future cash flow value, and at a moderate discount (> 20%).
Reitmans (Canada)'s share price is below the future cash flow value, and 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
Reitmans (Canada)'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 Reitmans (Canada) 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 Specialty Retail industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Reitmans (Canada)'s earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Reitmans (Canada)'s earnings growth to the Canada market average as no estimate data is available.
Unable to compare Reitmans (Canada)'s revenue growth to the Canada market average as no estimate data is available.
Unable to determine if Reitmans (Canada) is high growth as no earnings estimate data is available.
Unable to determine if Reitmans (Canada) 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.
Reitmans (Canada)'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
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
Reitmans (Canada)'s finances.
The net worth of a company is the difference between its assets and liabilities.
Reitmans (Canada) is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Reitmans (Canada)'s cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Reitmans (Canada)'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 not covered by short term assets, assets are -9.352569051165E+15x 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. Stephen F. Reitman has been the Chief Executive Officer and President of Reitmans (Canada) Limited since January 15, 2020 and June 2010 respectively. Mr. Reitman served as the Chief Operating Officer of Reitmans (Canada) Limited since November 20, 2017 until January 15, 2020. Mr. Reitman served as the Chief Operating Officer of Reitmans Canada Ltd. from 1984 to June 2014 and Executive Vice President from 1984 to June 2010. He served as an Executive Vice President and Chief Operating Officer at Shirmax Fashions Ltd. From 1971 to 1984, he held various management positions with Reitmans. He has been an Independent Director of Global Brands Acquisition Corp. since October 2007. He has been a Director of Reitmans Canada Ltd., since 1984 and Capri Holdings Limited since December 2011 and Michael Kors (USA), Inc., since December 2011. He serves as a Director of Celio International S.A and Simone Perele Canada Ltd. He served as a Director of Shirmax Fashions Ltd. He served as a Director of Cookie Jar Entertainment Inc. and CINAR Corp. Mr. Reitman received an M.B.A. degree from the Wharton School of the University of Pennsylvania in 1971.
Stephen's compensation has increased whilst company is loss making.
Stephen's remuneration is higher than average for companies of similar size in Canada.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Reitmans (Canada) management team is less than 2 years, this suggests a new team.
CEO, President & Director
VP of Finance & CFO
President of RW & CO and Thyme Maternity
Chief Information Officer
Vice President of Legal & Secretary
Director of Corporate Communications
Chief Human Resources Officer
President of Reitmans banner
President of Addition Elle & Penningtons
VP & Comptroller
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Reitmans (Canada) board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors
CEO, President & Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Reitmans (Canada) Limited primarily engages in the retail of women’s wearing apparel in Canada. Its products include shirts, blouses, pants, dresses, skirts, sweaters, outerwear, activewear, lingerie, and accessories. The company also offers apparel for men. It serves customers through retail and e-commerce channels, under the Reitmans, Addition Elle, Penningtons, RW & CO., Thyme Maternity, and Hyba brand names. Reitmans (Canada) Limited was founded in 1926 and is based in Toronto, Canada.
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