Discounted Cash Flow Calculation for DB:GHO 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.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
DB:GHO 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.
Adelaide Brighton's share price is below the future cash flow value, and at a moderate discount (> 20%).
Adelaide Brighton'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
Adelaide Brighton's earnings available for a low price, and how does
this compare to other companies in the same industry?
Adelaide Brighton's earnings are expected to grow significantly at over 20% yearly.
Adelaide Brighton's revenue is expected to grow by 0.8% 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.
Adelaide Brighton'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
Adelaide Brighton's finances.
The net worth of a company is the difference between its assets and liabilities.
Adelaide Brighton is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Adelaide Brighton's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Adelaide Brighton'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 1x 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. Nicholas D. Miller, also known as Nick, NZCE(Civil), BE(Hons), FIPENZ, GAICD, has been Chief Executive Officer of Adelaide Brighton Limited since January 30, 2019. He is a Board member of the Australian Contractors Association (ACA). Mr. Miller was Managing Director and Chief Executive Officer at Broadspectrum since May 2018 until November, 2018 and was its Director since 2018 until November, 2018. He served as the Managing Director of Fulton Hogan Limited since January 2010 until September 2017 and also served as Managing Director of Fulton Hogan Construction Pty Ltd., and Fulton Hogan Industries Pty Ltd. Mr. Miller served as Managing Director and Director of Fulton Hogan Australia Pty. Ltd. Mr. Miller served as Chief Executive of Fulton Hogan Pty Ltd. He was a Director of a number of Fulton Hogan subsidiaries and joint ventures, including Blackhead Quarries Ltd, Allied FH Ltd, WFH Properties Ltd., and Pokeno Village Holdings Ltd. He has over 20 years experience in various civil engineering and management roles, including as Chief Executive of Isaac Construction. He served as Deputy Managing Director of Fulton Hogan Limited. Mr. Miller served as the Chairman of Orion New Zealand Ltd. since February, 2017 until April, 2018 and also served as its Director since September 15, 2016. He served as a Director of Fulton Hogan Construction Pty Ltd. He served as an Executive Director of Fulton Hogan Limited until October 31, 2017. His qualifications include a BE in Civil Engineering (Hons) from Canterbury University and a New Zealand Certificate of Engineering.
Insufficient data for Nick to compare compensation growth.
Nick's remuneration is about average for companies of similar size in Germany.
Management Team Tenure
Average tenure of the
management team in years:
The tenure for the Adelaide Brighton management team is about average.
Chief Executive Officer
Chief Financial Officer
Executive General Manager of Concrete Products
Executive General Manager of Cement and Lime
GM of Corporate Finance & Investor Relations and Additional Company Secretary
Marcus R. Clayton
General Counsel & Company Secretary
Executive General Manager of Marketing & International Trade
Executive General Manager of Human Resources
Executive General Manager of Concrete & Aggregates
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Adelaide Brighton board of directors is less than 3 years, this suggests a new board.
Board of Directors
Deputy Chairman & Lead Independent Director
Independent Non-Executive Director
Independent Non-Executive Director
Non-Independent Non Executive Director
Independent Non-Executive Director
Who owns this company?
Recent Insider Trading
More shares have been bought than sold by Adelaide Brighton individual insiders in the past 3 months.
Adelaide Brighton Limited produces, imports, distributes, and markets construction materials in Australia. The company operates in two segments, Cement, Lime, Concrete and Aggregates; and Concrete Products. It offers cement, cementitious products, lime, premixed concrete, aggregates, and sand, as well as concrete bricks, blocks, pavers, retaining walls, erosion control products, architectural masonry products, and reconstituted stone veneers. The company offers its products to residential and non-residential construction, engineering construction, alumina production, and mining markets. Adelaide Brighton Limited was founded in 1882 and is headquartered in Adelaide, Australia.
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