Sentences with phrase «future cash flow stream»

The intrinsic value approach relies on estimating value based on a combination of the net present value of the future cash flow stream of a business and any excess assets not used to generate those cash flows.

Even if that multiple is based on historical ranges (medians or averages) or is comparable to industry peers or the market as a whole, investors fall short of capturing the uniqueness of a company's future cash flow stream and balance sheet via a discounted cash flow process, which considers all of the qualitative factors of a company — from a competitive assessment to the company's efficiency initiatives and beyond.

Clearly, the current valuation of NFLX implies a future cash flow stream that even the strongest of business models would be challenged to achieve.

One of the key inputs to valuation is the risk adjusted cost of capital applied in discounting the future cash flow streams, whether it be applied to dividends or the company's free cash flow.

I want to share with you a brief look back at the passed year focusing on my achievements in terms of passive income and I will also make some projections regarding future cash flow streams.

Not exact matches

Over the years, I've emphasized what I call the Iron Law of Valuation: the every security is a claim on an expected stream of future cash flows, and given that expected stream of future cash flows, the current price of the security moves opposite to the expected future return on that security.

Now there's no doubt that something has, indeed, gone badly wrong with capitalism in the recent economic cycle, but we hasten to add that stocks are not only a claim on one year or one cycle of cash flows, but are claims on a stream of future deliverable cash flows with an effective duration of about 50 years.

This follows from the Iron Law of Valuation — the higher the price an investor pays for a given stream of expected future cash flows, the lower the long - term return one should expect.

The higher the price an investor pays for a given stream of future cash flows, the lower the long - term return an investor can expect.

Yes, if you have a stream of future expected cash flows and need to estimate a fair price, interest rates should inform your choice of an appropriate discount rate.

Short - term financial disappointments may contribute, but stocks are a claim on an infinite stream of future cash flows.

I've often called it the Iron Law of Valuation: the higher the price you pay today for a given stream of future cash flows, the lower your rate of return over the life of the investment.

But again, the true «wealth» represented by any security is in the stream of future cash flows it delivers over time, and in the value - added production that generates those cash flows.

The main points here are that QE has encouraged the dramatic overvaluation of virtually every class of investments; that these elevated valuations don't represent «wealth» (which is embodied in the future stream of deliverable cash flows, not in the current price); that extreme valuations promise dismal future outcomes for investors over a 10 - 12 year horizon; and that until a clear improvement in market internals conveys a resumption of speculative risk - seeking by investors, the current combination of extreme valuations and increasing risk - aversion, coming off of an extended top formation after persistent «overvalued, overbought, overbullish» extremes, represents the singularly most negative return / risk classification we identify.

No - the true «wealth» is in the stream of future cash flows and value - added production that generates those future cash flows.

The essential point, however, is that these elevated valuations don't change the stream of future cash flows.

Over the full cycle, the market recognizes reasonably - valued stocks that throw off a reliable stream of cash to shareholders (especially those that exhibit enough investor sponsorship so that future cash flows aren't called into question on the basis of others» information).

Furthermore, even if book sales were to decline, it is our belief that the discounted value of the future stream of cash flows that BKS could expect to generate, otherwise known as its intrinsic value, would far exceed the current enterprise value of the Company.

That imbalance of eagerness between buyers and sellers has clearly affected prices of risky assets, but it does not generate new cash flows - it simply raises the valuation that the market places on existing streams of future cash flows, and thereby lowers the subsequent rate of return on holding those securities.

What does matter is finding new products and processes that change the value of the future free cash flow stream.

Think of assets as a stream of future cash flows.

However, even though defined benefits are expressed as monthly income, they have a present value, which is simply the stream of their expected future cash flows expressed as a discounted lump sum.

This should be intuitive if you think about a present value calculation — when you change the discount rate used on a stream of future cash flows, the longer until a cash flow is received, the more its present value is affected.

Pay off the debt and use the monthly cash flow savings to build a future stream of retirement income.

It can occur in assets when people and institutions become maniacal, and push the price of an asset class well beyond where its future stream of cash flow would warrant.

The goal is to find a reasonable price for a future stream of cash flows and compare it to a risk - free rate of return, usually US treasuries.

RCFP provides investors with an additional income stream by way of regular cash flow to take care of future projected needs.

Typically your real estate software will employ an industry - standard discounted cash flow (DCF) methodology to project and then discount future expected cash flow streams to their nominal value in today's dollars.