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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. AEP Industries's forward rate of return for was 16.98%.
The historical rank and industry rank for AEP Industries's Forward Rate of Return (Yacktman) % or its related term are showing as below:
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
The historical data trend for AEP Industries's Forward Rate of Return (Yacktman) % 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.
AEP Industries Annual Data | |||||||||||||||||||||
Trend | Oct07 | Oct08 | Oct09 | Oct10 | Oct11 | Oct12 | Oct13 | Oct14 | Oct15 | Oct16 | |||||||||||
Forward Rate of Return (Yacktman) % | Get a 7-Day Free Trial | 18.29 | 24.31 | 11.15 | 15.29 | 16.98 |
AEP Industries Quarterly Data | ||||||||||||||||||||
Jan12 | Apr12 | Jul12 | Oct12 | Jan13 | Apr13 | Jul13 | Oct13 | Jan14 | Apr14 | Jul14 | Oct14 | Jan15 | Apr15 | Jul15 | Oct15 | Jan16 | Apr16 | Jul16 | Oct16 | |
Forward Rate of Return (Yacktman) % | Get a 7-Day Free Trial | 15.29 | 14.00 | 18.05 | 19.11 | 16.98 |
For the Auto Parts subindustry, AEP Industries's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % 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 Vehicles & Parts industry and Consumer Cyclical sector, AEP Industries's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where AEP Industries's Forward Rate of Return (Yacktman) % falls into.
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
AEP Industries's Forward Rate of Return of Oct. 2016 is
Forward Rate of Return | = | Normalized Free Cash Flow | / | Price | + | 5-Year EBITDA Growth Rate |
= | 6.052 | / | 109.55 | + | 0.1146 | |
= | 16.98 % |
* 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.
AEP Industries (NAS:AEPI) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Thank you for viewing the detailed overview of AEP Industries's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lee C Stewart | director | PO BOX 816, SHARON CT 06069 |
Daniel Khoshaba | 10 percent owner | 67 EAST PARK PLACE, 8TH FLOOR, SUITE 800, MORRISTOWN NJ 07960 |
Jmb Capital Partners Master Fund L.p. | 10 percent owner | 1999 AVENUE OF THE STARS, SUITE 2040, LOS ANGELES CA 90067 |
Jonathan Brooks | 10 percent owner | 2201 NORTH BEVERLY DR., BEVERLY HILLS CA 90210 |
Smithwood Partners Llc | 10 percent owner | 1999 AVENUE OF THE STARS, SUITE 2040, LOS ANGELES CA 90067 |
Smithwood General Partner, Llc | 10 percent owner | 1999 AVENUE OF THE STARS, SUITE 2040, LOS ANGELES CA 90067-6022 |
Smithwood Advisers, L.p. | 10 percent owner | 1999 AVENUE OF THE STARS, SUITE 2040, LOS ANGELES CA 90067-6022 |
Third Point Llc | 10 percent owner | 55 HUDSON YARDS, NEW YORK NY 10001 |
Daniel S Loeb | 10 percent owner | THIRD POINT LLC, 390 PARK AVENUE, NEW YORK NY 10022 |
Bradley Louis Radoff | other: See Remarks Below | 2727 KIRBY DRIVE, UNIT 29L, HOUSTON TX 77098 |
Matthew Constantino | other: Former Director (1) | 120 FIFTH AVENUE, 3RD FLOOR, NEW YORK NY 10011 |
Eric Press | other: Former Director (1) | 1301 AVENUE OF THE AMERICA 38TH FLOOR, NEW YORK NY 10019 |
Apollo Investment Fund V Lp | 10 percent owner | 2 MANHATTANVILLE RD, C/O APOLLO ADVISORS LP, PURCHASE NY 10577 |
Apollo Advisors V Lp | 10 percent owner | 2 MANHATTANVILLE RD, C/O APOLLO ADVISORS LP, PURCHASE NY 10577 |
Apollo Management V Lp | 10 percent owner | 2 MANHATTANVILLE RD, C/O APOLLO ADVISORS LP, PURCHASE NY 10577 |
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