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Richardson Electronics Ltd (NAS:RELL)
Intrinsic Value: Projected FCF
\$-1.54 (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, Richardson Electronics Ltd's projected FCF intrinsic value is \$-1.54. The stock price of Richardson Electronics Ltd is \$5.96. Therefore, Richardson Electronics Ltd'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 Richardson Electronics Ltd was 28.79. The lowest was 0.00. And the median was 1.51.

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 Richardson Electronics Ltd's FCF(6 year avg) is calculate as

Richardson Electronics Ltd Quarterly Data

 201408 201411 201502 201505 201508 201511 201602 201605 201608 201611 total_freecashflow -1.2 -3.1 -7 -3.2 -7.5 -3.1 -7.0 -0.8 -3.7 -1.5 201202 201205 201208 201211 201302 201305 201308 201311 201402 201405 total_freecashflow -5.6 3.7 -3.4 5.7 1.5 3.2 -1.6 -0.3 -1.3 5.1 201102 201105 201108 201111 total_freecashflow -9.8 8.6 -47.7 0.6

Add all the Free Cash Flow together and divide 6 will get Richardson Electronics Ltd's FCF(6 year avg) = \$-13.24.

Richardson Electronics Ltd's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Nov16) * 0.8) / Shares Outstanding = (9.52035159596 * -13.2351666667 + 132.836 * 0.8) / 12.844 = -1.54

* 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.

Richardson Electronics 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 = 5.96 / -1.5364870833 =

* 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.

Richardson Electronics Ltd Annual Data

 May07 May08 May09 May10 May11 May12 May13 May14 May15 May16 Projected FCF 6.21 8.43 6.68 8.63 13.42 7.48 9.56 9.24 5.61 0.00

Richardson Electronics Ltd Quarterly Data

 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Projected FCF 9.22 8.07 7.27 5.61 4.76 3.46 0.44 0.00 -0.66 -1.54
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