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Primus Guaranty Ltd (OTCPK:PRSG)
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, Primus Guaranty Ltd's projected FCF intrinsic value is \$0.00. The stock price of Primus Guaranty Ltd is \$0.11. Therefore, Primus Guaranty Ltd'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 Primus Guaranty Ltd's FCF(6 year avg) is calculate as

Primus Guaranty Ltd Quarterly Data

 200909 200912 201003 201006 201009 201012 201103 201106 201109 201112 total_freecashflow -6.88 -106.24 -71.99 10.6 1.03 33.10 -7.68 7.62 15.56 12.18 200703 200706 200709 200712 200803 200806 200809 200812 200903 200906 total_freecashflow -56.36 -265.29 390.82 -3.28 13.25 24.77 24.86 -140.01 -7.12 6.91 200603 200606 200609 200612 total_freecashflow 7.35 13.51 8.99 9.26

Add all the Free Cash Flow together and divide 6 will get Primus Guaranty Ltd's FCF(6 year avg) = \$-14.18.

Primus Guaranty Ltd's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Dec11) / 0.8) / Shares Outstanding = (9.52035159596 * -14.1776666667 + -145.638 / 0.8) / 36.849 = -8.60

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

Primus Guaranty Ltd'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 = 0.11 / -8.60332360382 =

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Primus Guaranty Ltd Annual Data

 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Projected FCF 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -5.95 -8.73

Primus Guaranty Ltd Quarterly Data

 Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Projected FCF 0.00 0.00 0.00 0.00 0.00 -5.95 0.00 0.00 0.00 -8.73
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