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Investors Real Estate Trust (NYSE:IRET)
Intrinsic Value: Projected FCF
$-4.77 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Investors Real Estate Trust's projected FCF intrinsic value is $-4.77. The stock price of Investors Real Estate Trust is $6.13. Therefore, Investors Real Estate Trust's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Investors Real Estate Trust was 33.68. The lowest was 17.38. And the median was 18.02.


Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Investors Real Estate Trust's FCF(6 year avg) is calculate as

Investors Real Estate Trust Quarterly Data

201307201310201401201404201407201410201501201504201507201510
total_freecashflow -19.5-55.4-21.7-7.8-34.1-39.9-37.6-34.4-24.4-110.5
201101201104201107201110201201201204201207201210201301201304
total_freecashflow -18.913.0-1.9-51.0-4.5-19.30.00.00.00.0
201001201004201007201010
total_freecashflow -35.311.4-0.32.1

Add all the Free Cash Flow together and divide 6 will get Investors Real Estate Trust's FCF(6 year avg) = $-81.64.

Investors Real Estate Trust's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Oct15)*0.8)/Shares Outstanding
=(9.52035159596*-81.6441666667+620.059*0.8)/138.565
=-2.03

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Investors Real Estate Trust's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=6.13/-2.02961766987
=

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Investors Real Estate Trust Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
Projected FCF -9.09-4.14-6.29-5.39-2.45-1.21-1.370.56-1.76-3.00

Investors Real Estate Trust Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Projected FCF 0.47-0.23-0.37-1.76-1.92-2.18-2.61-3.00-3.35-4.77
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