New Zealand to Replace Petrol Tax in Major Road Funding Reform
The government will abolish the tax and replace it with road user charges for all light vehicles, Transport Minister Chris Bishop said Wednesday in Wellington. Legislation will be introduced in 2026 to allow a new system to be ready in 2027, but no firm implementation date has been set, he said.
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Yahoo
4 minutes ago
- Yahoo
Are Investors Undervaluing Service Stream Limited (ASX:SSM) By 37%?
Key Insights Service Stream's estimated fair value is AU$3.21 based on 2 Stage Free Cash Flow to Equity Service Stream is estimated to be 37% undervalued based on current share price of AU$2.01 Our fair value estimate is 53% higher than Service Stream's analyst price target of AU$2.10 Today we will run through one way of estimating the intrinsic value of Service Stream Limited (ASX:SSM) by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. The Calculation We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (A$, Millions) AU$92.2m AU$101.4m AU$102.3m AU$103.9m AU$106.0m AU$108.4m AU$111.2m AU$114.2m AU$117.5m AU$120.9m Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x1 Est @ 1.53% Est @ 2.00% Est @ 2.33% Est @ 2.57% Est @ 2.73% Est @ 2.84% Est @ 2.92% Present Value (A$, Millions) Discounted @ 7.8% AU$85.5 AU$87.2 AU$81.6 AU$76.9 AU$72.7 AU$69.0 AU$65.6 AU$62.5 AU$59.7 AU$56.9 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = AU$718m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.1%. We discount the terminal cash flows to today's value at a cost of equity of 7.8%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = AU$121m× (1 + 3.1%) ÷ (7.8%– 3.1%) = AU$2.6b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= AU$2.6b÷ ( 1 + 7.8%)10= AU$1.2b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is AU$2.0b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of AU$2.0, the company appears quite good value at a 37% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. The Assumptions The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Service Stream as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.8%, which is based on a levered beta of 1.119. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Service Stream SWOT Analysis for Service Stream Strength Earnings growth over the past year exceeded the industry. Currently debt free. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Construction market. Opportunity Annual earnings are forecast to grow for the next 4 years. Trading below our estimate of fair value by more than 20%. Threat Annual earnings are forecast to grow slower than the Australian market. Looking Ahead: Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Service Stream, we've compiled three further items you should consider: Risks: As an example, we've found 1 warning sign for Service Stream that you need to consider before investing here. Future Earnings: How does SSM's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Australian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Washington Post
6 minutes ago
- Washington Post
Dispute over a major port contract threatens Haiti's fragile political stability
PORT-AU-PRINCE, Haiti — The leader of Haiti's transitional presidential council claimed Wednesday that one of its communications employees was threatened and forced to publish a press release about a key contract involving the country's biggest port and two well-known members of its elite. The incident has deepened infighting within the council and further strained relations between Haiti's government and its private sector as a wealthy businessman prepares to take over the council's presidency on Thursday.
Associated Press
6 minutes ago
- Associated Press
Dispute over a major port contract threatens Haiti's fragile political stability
PORT-AU-PRINCE, Haiti (AP) — The leader of Haiti's transitional presidential council claimed Wednesday that one of its communications employees was threatened and forced to publish a press release about a key contract involving the country's biggest port and two well-known members of its elite. The incident has deepened infighting within the council and further strained relations between Haiti's government and its private sector as a wealthy businessman prepares to take over the council's presidency on Thursday. Fritz Alphonse Jean, the council's current president, said in a statement that the Aug. 4 press release was published without his approval and despite his objections. He also said he was informed about pressure exerted by unidentified council members to dismiss another communications official who 'had refused to publish the note without his authorization.' Jean said a judge would determine whether to grant a 27-year lease to Caribbean Port Services instead of nine years as originally planned. 'Without this opinion, suspicions of corruption could further tarnish the (council's) credibility,' he said. Jean also demanded that Prime Minister Alix Didier Fils-Aimé provide the council with explanations previously requested regarding the lease of the Port-au-Prince International Port, located in an area long controlled by powerful gangs. The press release that Jean condemned states the council met with Philippe Coles, president of Caribbean Port Services, and Edouard Baussan, a wealthy businessman with strong ties to Haiti's most powerful politicians. The release claimed that the 'fruitful discussions, conducted in complete transparency,' found that 'all necessary clarifications have been provided' and that the contract between the government and the company is legal. Caribbean Port Services is a private maritime logistics company that operates the international port in partnership with Haiti's Port Authority. It handles about 80% of the port's cargo container volume, according to its website. On Thursday, Jean will step down as council president as part of a rotation. He recently told The Associated Press that starting on Aug. 7, Haiti's two executive branches will be controlled by its private sector. Bocchit Edmond, a former ambassador to the U.S., said a businessman taking leadership of the council is an opportunity for the private sector to prove itself. He also condemned Jean's statement on Wednesday. 'I'm against the public bashing of the private sector,' he said. 'It's not a good thing at all for the country, for its political stability.' However, Jean said that some private sector members 'were active operators of the chaos in which Haiti is currently engulfed.' Some of Haiti's wealthy elites and powerful politicians have long been accused of financing and arming dozens of gangs, which the United Nations has noted in its reports. Gangs now control 90% of the capital, Port-au-Prince, and continue to launch attacks in a bid to control more territory. Jean's announcement comes less than a week after U.S. officials announced they were aware of 'reported bribery attempts' aimed at destabilizing Haiti. In remarks to the AP, Jean called it 'a desperate and trivial effort to attract the sympathy of American congressmen and women, and the U.S. administration.' The council was created following the resignation of former Prime Minister Ariel Henry after gangs launched a series of attacks last year against critical government infrastructure. It is tasked with holding elections by February 2026. ___ Coto reported from San Juan, Puerto Rico
