What is Roundys Forward Rate of Return (Yacktman) %?
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Roundys's forward rate of return for was 0.00%.
The historical rank and industry rank for Roundys's Forward Rate of Return (Yacktman) % or its related term are showing as below:
RNDY's Forward Rate of Return (Yacktman) % is not ranked *
in the Retail - Defensive industry.
Industry Median: 16.055 * Ranked among companies with meaningful Forward Rate of Return (Yacktman) % only.
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Roundys Forward Rate of Return (Yacktman) % Historical Data
The historical data trend for Roundys's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Roundys's Forward Rate of Return (Yacktman) %
For the Grocery Stores subindustry, Roundys's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Roundys's Forward Rate of Return (Yacktman) % Distribution in the Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Roundys's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Roundys's Forward Rate of Return (Yacktman) % falls into.
Roundys Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Roundys (NYSE:RNDY) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Roundys Forward Rate of Return (Yacktman) % Related Terms
Thank you for viewing the detailed overview of Roundys's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Roundys, Inc. is a Midwest supermarket founded in 1872 as a privately owned food wholesaling company. The Company is a food retailer in the state of Wisconsin. It owns and operates 163 retail grocery stores, of which 121 are located in Wisconsin, 29 are located in Minnesota and 13 are located in Illinois. It also distributes a full line of food and non-food products from three wholesale distribution centers and provides services to one independent licensee retail grocery store in Wisconsin. The Company completed the initial public offering on February 13, 2012. Its stores feature expansive meat, produce, deli and other perishable products and specialty and prepared foods departments. It also offers a line of health and beauty care products and a selection of seasonal merchandise to maximize the conveniences offered to its customers. The Company operates retail grocery stores under its Pick 'n Save, Rainbow, Copps, Metro Market and Mariano's retail banners. Many of its product categories include natural and organic options, catering to its customers' focus on healthier eating choices. It provides its customers with a compelling one-stop shopping experience featuring a level of customer service in its attractive and convenient stores. The Company's products can be classified as non-perishable, perishable and non-food. Non-perishable food categories consist of grocery, frozen, and dairy products. Perishable categories include produce, meat, seafood, deli, bakery and floral. Non-food includes general merchandise, health and beauty care, pharmacy, and alcohol. It distributes personalized offers to customers via email/ digital communication, in-store coupons and direct mail communications based on specific behaviors, measured through its loyalty card activity. The Company competes with conventional, national and regional supercenters such as; New Albertson's, Inc., Costco, Target and Wal-Mart, Woodman's and Meijer's, Festival Foods and Piggly Wiggly, Aldi, Trader Joe's and Whole Foods, and local supermarkets, natural foods stores, smaller specialty stores and farmers' markets. The Company is subject to federal, state and local laws and regulations relating to zoning, land use, environmental protection, work place safety, public health, community right-to-know, alcoholic beverage sales, tobacco sales and pharmaceutical sales.
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