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As of Sep20, The Goldfield's earnings power value is $-0.84. *
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.
Margin of Safety is N/A.
The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.
The historical data trend for The Goldfield's Earnings Power Value (EPV) 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.
The Goldfield Annual Data | |||||||||||||||||||||
Trend | Dec10 | Dec11 | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | |||||||||||
Earnings Power Value (EPV) | Get a 7-Day Free Trial | 0.26 | 0.99 | 0.51 | -0.05 | 0.37 |
The Goldfield Quarterly Data | ||||||||||||||||||||
Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | |
Earnings Power Value (EPV) | Get a 7-Day Free Trial | -0.04 | 0.37 | 0.12 | 0.20 | -0.84 |
For the Engineering & Construction subindustry, The Goldfield's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) 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.
For the Construction industry and Industrials sector, The Goldfield's Earnings Power Value (EPV) distribution charts can be found below:
* The bar in red indicates where The Goldfield's Earnings Power Value (EPV) falls into.
Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.
The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.
The Goldfield's "Earning Power" Calculation:
Average of Last 20 Quarters | Last Quarter | |
Revenue | 146.7 | |
DDA | 8.7 | |
Operating Margin % | 8.70 | |
SGA * 25% | 2.0 | |
Tax Rate % | 18.34 | |
Maintenance Capex | 11.1 | |
Cash and Cash Equivalents | 20.6 | |
Short-Term Debt | 17.8 | |
Long-Term Debt | 42.1 | |
Shares Outstanding (Diluted) | 24.6 |
1. Start with "Earnings" not including accounting adjustments (one-time charges not excluded unless policy has changed). "Earnings" are "Operating Income.
2. Look at average margins over a business/Industry cycle: Average Operating Margin = 8.70%
To normalize margins and eliminate the effects on profitability of valuing the firm at different points in the business cycle, it is usually best to take a long-term average of operating margins. Ideally this would be as long as 10 years and include at least one economic downturn. However, since most of companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year margin.
3. Multiply average margins by sustainable revenues and then adjust for maintenance SGA. This yields "normalized" EBIT:
To be conservative, GuruFocus uses an average of the 5 year revenues as the sustainable revenue.
EPV analysis recognises that part of SG&A expenditure is made to maintain and replace the existing assets, while part is made to grow sales. Since EPV is only interested in what it costs a going concern to maintain its existing asset base, it adds back a percentage of SG&A (between 15% and 50% - this is a matter of judgment and industry knowledge) to make up for the fact that some of this expenditure went to fund growth and shouldn't be accounted for. To start off, we assume 25% for the sake of prudence.
Sustainable Revenue = $146.7 Mil, Average Operating Margin = 8.70%, Average Adjusted SGA = 2.0,
therefore "Normalized" EBIT = Sustainable Revenue * Average Operating Margin + Average Adjusted SGA = 146.7 * 8.70% +2.0 = $14.7241499 Mil.
4. Multiply by one minus Average Tax Rate (NOPAT):
Same as average operating margin calculation, GuruFocus takes an average of the 5 years tax rates.
Average Tax Rate = 18.34%, and "Normalized" EBIT = $14.7241499 Mil,
therefore After-tax "Normalized" EBIT = "Normalized" EBIT * ( 1 - Average Tax Rate ) = 14.7241499 * ( 1 - 18.34% ) = $12.023078221594 Mil.
5. Add back Excess Depreciation (after tax at 1/2 average tax rate). This yields "normalized" Earnings:
Excess Depreciation = Average DDA * % of Excess Depreciation (after tax at 1/2 average tax rate) = 8.7 * 0.5 * 18.34% = $0.795711032 Mil.
"Normalized" Earnings = After-tax "Normalized" EBIT + Excess Depreciation = 12.023078221594 + 0.795711032 = $12.818789253594 Mil.
6. Adjusted for Maintenance Capital Expenditure:
First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Third, calculate Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
Fourth, GuruFocus uses an average of the 5 year maintenance capital expenditures as maintenance CAPEX.
The Goldfield's Average Maintenance CAPEX = $11.1 Mil *.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.
7. Investors require a return of "WACC" for the risk they are taking: WACC = 9%
8. The Goldfield's current cash and cash equivalent = $20.6 Mil.
The Goldfield's current interest bearing debt = Long-Term Debt & Capital Lease Obligation + Short-Term Debt & Capital Lease Obligation = 42.1 + 17.8 = $59.889 Mil.
The Goldfield's current Shares Outstanding (Diluted Average) = 24.6 Mil.
The Goldfield's Earnings Power Value (EPV) for Sep20 is calculated as:
EPV | = | ( ( Norm. Earnings | - | Maint. CAPEX *) | / | WACC | + | CashandEquiv | - | Int. Bearing Debt ) | / | Shares Outstanding (Diluted Average) |
= | ( ( 12.818789253594 | - | 11.1) | / | 9% | + | 20.6 | - | 59.889 ) | / | 24.6 | |
= | -0.84 |
Margin of Safety (EPV) | = | ( Earnings Power Value (EPV) | - | Current Price ) | / | Earnings Power Value (EPV) |
= | ( -0.84293156417398 | - | 0.142 ) | / | -0.84293156417398 | |
= | N/A |
* 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.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.
The Goldfield (AMEX:GV) Earnings Power Value (EPV) Explanation
Assumption: Current profitability is sustainable.
Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.
Be Aware
Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.
Thank you for viewing the detailed overview of The Goldfield's Earnings Power Value (EPV) provided by GuruFocus.com. Please click on the following links to see related term pages.
Jason M Spivey | officer: CoCEO,President of PCA,SEP,PFI | 7401 SUNNYSIDE DRIVE LEESBURG FL 34748-9169 |
Stephen R Wherry | officer: CoCEO,Sr.VP,CFO,Tres,AsstSec | 1684 W. HIBISCUS BLVD. MELBOURNE FL 32901-2631 |
Stephen L Appel | director | 1616 SUNNYSIDE DRIVE WINTER PARK FL 32789-1456 |
John H Sottile | director, officer: President and CEO | 7825 SOUTH TROPICAL TRAIL MERRITT ISLAND FL 32952 |
Ronald Gregory Crutchfield | officer: President of PCA and SEP | 6460 LONGLAKE DR PORT ORANGE FL 32128-7187 |
Robert L Jones | officer: President of PCA and SEP | 708 GRAPE IVY LN NEW SMYRNA BEACH FL 32168 |
Davis John W Iii | officer: President of Power Corporation | 35651 GREEN FOREST DRIVE EUSTIS FL 32736 |
James F Adelson | 10 percent owner | 15 EAST 5TH STREET, SUITE 3200, TULSA OK 74103 |
Stephen J Heyman | 10 percent owner | 15 EAST 5TH STREET, SUITE 3200, TULSA OK 74103 |
Ellbar Partners Management, Llc | 10 percent owner | 15 E 5TH STREET-SUITE 3200, TULSA OK 74103 |
Jeffrey E. Eberwein | director | 53 FOREST AVENUE, SUITE 101, OLD GREENWICH CT 06870 |
David P Bicks | director | C/O DUANE MORRIS LLP 1540 BROADWAY NEW YORK NY 10036 |
Al M Marino | director | 1483 MAIN ST WEYMOUTH MA 02190 |
Dwight W Severs | director | 1308 RIVERSIDE DRIVE TITUSVILLE FL 32780 |
Boston Avenue Capital Llc | 10 percent owner | 15 EAST 5TH STREET, SUITE 3200, TULSA OK 74103 |
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