Discounted Cash Flow Calculation for NasdaqCM:PACQ.U using Excess Returns Model Model
The calculations below outline how an intrinsic value for Pure 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
Pure 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 Pure 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 Pure Acquisition's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Pure Acquisition's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare Pure Acquisition's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if Pure Acquisition is high growth as no earnings estimate data is available.
Unable to determine if Pure 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.
Pure 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
Pure Acquisition's finances.
The net worth of a company is the difference between its assets and liabilities.
Pure Acquisition's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Pure Acquisition's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Pure 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.
Debt is not covered by short term assets, assets are 0.1x 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. Jack D. Hightower has been Chairman of the Board and Chief Executive Officer since November 2017 and served as President since November 2017 until December 2019 of Pure Acquisition Corp. Mr. Hightower serves as Chairman, Chief Executive Officer, President at HighPeak Energy Management, LLC. He serves as the Chief Executive Officer and President of Celero Energy, Management LP. He served as President and Chief Executive Officer of Titan Exploration, Inc. since March 1995. He served as the Chief Executive Officer and President at Celero Energy Company, LP. He served as President and Chief Executive Officer of Pure Resources, Inc. since May 2000. He served as Chief Executive Officer of United Oil Services, Inc. from 1986 to January 1996, an oil field service Company serving customers in the Permian Basin. He served as President of Amber Energy, Inc. from 1978 to 1995, a Company formed to identify oil and gas exploration prospects. He served as Chief Executive Officer and President of Enertex, Inc. from 1991 to 1994. He serves as the Chairman of Celero Energy, LP. He served as Chairman of Titan Exploration, Inc. since March 1995, Pure Resources Inc. since May 2000, United Oil Services, Inc. from 1986 to January 1996, Enertex, Inc. from 1991 to 1994 and Amber Energy, Inc. from 1978 to 1995. Mr. Hightower has been a Director of Chase Bank of Texas, N.A., Midland since 1990. He served as Chairman of Celero Energy Company, LP. He served as a Director of Titan Exploration, Inc. since March 1995. He served as a Director of Pure Resources Inc. Mr. Hightower earned a BBA in Administrative Finance and a B.B.A. in Money, Banking and Investments in 1970, both from Texas Tech University. He holds industry experience as a chief executive across a broad range of market conditions and Industry cycles.
Insufficient data for Jack to compare compensation growth.
Insufficient data for Jack 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 Pure Acquisition management team is about average.
Chairman & CEO
Chief Financial Officer
COO & Director
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Pure Acquisition board of directors is less than 3 years, this suggests a new board.
Board of Directors
Chairman & CEO
COO & Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Pure Acquisition Corp. does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization, or similar business combination with one or more target businesses. The company was founded in 2017 and is based in Fort Worth, Texas.
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.