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GuruFocus has detected 4 Warning Signs with First Trust Energy Income & Growth Fund $FEN.
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First Trust Energy Income & Growth Fund (AMEX:FEN)
Intrinsic Value: Projected FCF
$7.68 (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, First Trust Energy Income & Growth Fund's projected FCF intrinsic value is $7.68. The stock price of First Trust Energy Income & Growth Fund is $26.26. Therefore, First Trust Energy Income & Growth Fund's Price to Intrinsic Value: Projected FCF Ratio of today is 3.4.

FEN' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 3.42   Max: 3.42
Current: 3.41

During the past 7 years, the highest Price to Intrinsic Value: Projected FCF Ratio of First Trust Energy Income & Growth Fund was 3.42. The lowest was 3.42. And the median was 3.42.

FEN's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than
90% of the 434 Companies
in the Global Asset Management industry.

( Industry Median: 1.07 vs. FEN: 3.41 )

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 First Trust Energy Income & Growth Fund's FCF(6 year avg) is calculate as

First Trust Energy Income & Growth Fund Annual Data

201111201211201311201411201511201611
total_freecashflow -108.37-80.82-60.3525.0854.4760.56

Add all the adjusted EPS together and divide 6 will get First Trust Energy Income & Growth Fund's FCF(6 year avg) = $-18.24.

First Trust Energy Income & Growth Fund'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
=(13.3192423265*-18.2391666667+489.743*0.8)/19.379
=7.68

* 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.

First Trust Energy Income & Growth Fund'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
=26.26/7.68164091718
=3.42

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


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

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

First Trust Energy Income & Growth Fund Annual Data

Nov10Nov11Nov12Nov13Nov14Nov15Nov16
Projected FCF 0.000.000.000.000.000.000.000.00-18.397.68

First Trust Energy Income & Growth Fund Semi-Annual Data

May12Nov12May13Nov13May14Nov14May15Nov15May16Nov16
Projected FCF 0.000.000.000.000.000.000.00-18.390.007.68
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