Market Cap : 166.6 M | Enterprise Value : 250.1 M | PE Ratio : 20.28 | PB Ratio : 0.72 |
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As of today (2022-05-23), Western Asset Global High Fd's intrinsic value calculated from the Discounted Cash Flow model is $11.09.
Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
Western Asset Global High Fd's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.
Margin of Safety (FCF Based) using Discounted Cash Flow model for Western Asset Global High Fd is 33.81%.
The industry rank for Western Asset Global High Fd's Intrinsic Value: DCF (FCF Based) or its related term are showing as below:
The historical data trend for Western Asset Global High Fd's Intrinsic Value: DCF (FCF Based) 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.
This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.
Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 9%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. We used the 10-Year Treasury Constant Maturity Rate as the risk free rate and rounded up to the nearest integer, then added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 5%
Growth Rate in the growth stage = average free cash flow growth rate in the past 10 years. If it is higher than 20%, we use 20%. If it is less than 5%, we use 5% instead. =>
For companies with Average Free Cash Flow Growth Rate in the past 10 years less than 5%, GuruFocus defaults => Growth Rate: 5%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. Free Cash Flow per Share: fcf = $0.818.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
Western Asset Global High Fd's Intrinsic Value: DCF (FCF Based) for today is calculated as
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[(1+g1)/(1+d) | + | (1+g1)^2/(1+d)^2 | + | ... | + | (1+g1)^10/(1+d)^10] |
+ | (1+g1)^10/(1+d)^10 | * | [(1+g2)/(1+d) | + | (1+g2)^2/(1+d)^2 | + | ... | + | (1+g2)^10/(1+d)^10]} |
set x = (1+g1)/(1+d) = (1+0.05)/(1+0.09) = 0.96330275229358
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.09) = 0.95412844036697
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[x | + | x^2 | + | ... | + | x^10] | + | x^10 | * | [y | + | y^2 | + | ... | + | y^10]} |
= | Free Cash Flow per Share | * | [x | * | (1-x^10) | / | (1-x) | + | x^10 | * | y | * | (1-y^10) | / | (1-y)] | |||||
= | 0.818 | * | 13.5514 | |||||||||||||||||
= | 11.09 |
Margin of Safety (FCF Based) | = | (Intrinsic Value: DCF (FCF Based) | - | Current Price) | / | Intrinsic Value: DCF (FCF Based) |
= | (11.09 | - | 7.34) | / | 11.09 | |
= | 33.81 % |
* 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.
Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
What you need to know about the DCF model:
1. The DCF model evaluates a company based on its future earnings powerYou can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Thank you for viewing the detailed overview of Western Asset Global High Fd's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Fergerson Laura F | other: Manager/Investment Manager | 3310 QUALITY DRIVE 2ND FLOOR RANCHO CORDOVA CA 95670 |
Eakes Brian | other: Manager/Investment Manager | 100 INTERNATIONAL DRIVE BALTIMORE MD 21202 |
Hoyt George P. | officer: Secretary and Ch Lgl Officer | C/O FRANKLIN TEMPLETON 100 FIRST STAMFORD PLACE STAMFORD CT 06902 |
Nicholls Matthew | other: Director of Sub-Adviser | ONE FRANKLIN PARKWAY SAN MATEO CA 94403 |
Bolt Jennifer J | other: Director of Sub-Adviser | C/O FRANKLIN RESOURCES, INC. ONE FRANKLIN PARKWAY SAN MATEO CA 94403-1906 |
Plafker Jed A. | other: Director of Sub-Adviser | ONE FRANKLIN PARKWAY SAN MATEO CA 94403 |
Saba Capital Management, L.p. | 10 percent owner | 405 LEXINGTON AVENUE 58TH FLOOR NEW YORK NY 10174 |
Weinstein Boaz | 10 percent owner | 405 LEXINGTON AVENUE 58TH FLOOR NEW YORK NY 10174 |
Jensen Fred Steven | officer: Chief Compliance Officer | LEGG MASON 620 EIGHTH AVENUE, 49TH FLOOR NEW YORK NY 10018 |
Cronin Daniel P | director | 235 EAST 42ND ST NEW YORK NY 10017 |
Hutchinson William R | director | 535 N MICHIGAN STE 1012 CHICAGO IL 60611 |
Berarducci Christopher | officer: Treas/Principal Finan Officer | LEGG MASON 620 EIGHTH AVENUE NEW YORK NY 10018 |
Kumar Nisha | director | 1735 MARKET STREET 32ND FLOOR PHILADELPHIA PA 19103 |
Berg Jennifer S | officer: Treasurer | 100 INTERNATIONAL DRIVE 7TH FLOOR BALTIMORE MD 21202 |
Kuehl Todd F | officer: Chief Compliance Officer | 1555 PEACHTREE STREET NE ATLANTA 2Q 30309 |
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