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MicroFinancial Inc (NAS:MFI)
Intrinsic Value: Projected FCF
\$0.00 (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, MicroFinancial Inc's projected FCF intrinsic value is \$0.00. The stock price of MicroFinancial Inc is \$10.43. Therefore, MicroFinancial Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

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 MicroFinancial Inc's FCF(6 year avg) is calculate as

MicroFinancial Inc Quarterly Data

 201206 201209 201212 201303 201306 201309 201312 201403 201406 201409 total_freecashflow 19.04 23.97 25.38 21.18 23.51 24.27 22.85 26.39 19.90 24.90 200912 201003 201006 201009 201012 201103 201106 201109 201112 201203 total_freecashflow 15.86 17.04 17.88 19.16 18.92 20.07 20.96 21.10 -57.18 22.17 200812 200903 200906 200909 total_freecashflow 11.85 12.73 14.23 14.71

Add all the Free Cash Flow together and divide 6 will get MicroFinancial Inc's FCF(6 year avg) = \$66.81.

MicroFinancial Inc's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Sep14) * 0.8) / Shares Outstanding = (14.6603468047 * 66.8145 + 93.004 * 0.8) / 14.736 = 71.52

* 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.

MicroFinancial Inc'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 = 10.43 / 71.5205579248 = 0.15

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

Related Terms

Historical Data

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

MicroFinancial Inc Annual Data

 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Projected FCF 28.06 30.05 33.73 33.91 32.53 28.39 31.03 33.54 45.36 65.27

MicroFinancial Inc Quarterly Data

 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Projected FCF 38.17 40.54 45.36 46.21 47.00 48.20 65.27 67.92 69.67 71.52
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