Discounted Cash Flow Calculation for NasdaqCM:INSU using Excess Returns Model Model
The calculations below outline how an intrinsic value for Insurance Acquisition is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
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
Insurance 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 Insurance 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 Capital Markets industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Insurance Acquisition's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Insurance Acquisition's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare Insurance Acquisition's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if Insurance Acquisition is high growth as no earnings estimate data is available.
Unable to determine if Insurance 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.
Insurance 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
1/6, 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
Insurance Acquisition's finances.
The net worth of a company is the difference between its assets and liabilities.
Insurance Acquisition's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Insurance Acquisition's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Insurance 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.
Insurance Acquisition has no debt, it does not need to be 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. John Miles Butler has been Chief Executive Officer and President of Insurance Acquisition Corp. since March 2018. Mr. Butler has been Managing Director of U.S. Insurance Strategy at Cohen & Company Inc., since November 1, 2017. Mr. Butler oversees the development of Cohen & Company's U.S. Insurance Asset Management Platform and Global ILS Program. He has 20 years of industry experience and joined Cohen & Company from Twelve Capital, a Swiss-based insurance specialist and asset manager, where he served as Managing Partner and Head of Investment Management, as well as Chief Executive Officer of Twelve Capital's UK operations and President of its U.S. subsidiary. During his tenure at Twelve Capital, Mr. Butler oversaw global investments in insurance companies as well as investments in Insurance Linked Securities and specialized in the origination, analysis, structuring and portfolio management of private fixed income, catastrophe bond and reinsurance related transactions. Mr. Butler held senior positions at Hannover Re Bermuda and White Mountains Reinsurance Group, where he worked in senior underwriting roles managing portfolios covering a diverse range of business lines. Mr. Butler began his career at the Imperial Fire & Marine Reinsurance Company in London as assistant to the marine and energy treaty underwriter. Mr. Butler holds an honors degree in Law from the School of Oriental and African Studies, University of London. He is ACII qualified, a Chartered Insurer and a member of the Insurance Institute of Ireland.
Insufficient data for John to compare compensation growth.
Insufficient data for John to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Insurance Acquisition management team is about average.
CEO & President
Chief Financial Officer
Chief Accounting Officer & Treasurer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Insurance Acquisition board of directors is less than 3 years, this suggests a new board.
Board of Directors
Chairman of the Board
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Could The Insurance Acquisition Corp. (NASDAQ:INSU) Ownership Structure Tell Us Something Useful?
Insurance Acquisition is a smaller company with a market capitalization of US$153m, so it may still be flying under the radar of many institutional investors. … See our latest analysis for Insurance Acquisition NasdaqCM:INSU Ownership Summary, August 1st 2019 What Does The Institutional Ownership Tell Us About Insurance Acquisition? … Private Company Ownership Our data indicates that Private Companies hold 50%, of the company's shares.
Insurance Acquisition Corp. does not have significant operations. It intends to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business transaction with one or more operating businesses or assets in the insurance sector. The company was founded in 2018 and is based in Philadelphia, Pennsylvania.
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