Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued

GuruFocus.com
·4 min read

- By GF Value

The stock of Freedom Holding (NAS:FRHC, 30-year Financials) is believed to be significantly overvalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $56.61 per share and the market cap of $3.3 billion, Freedom Holding stock is estimated to be significantly overvalued. GF Value for Freedom Holding is shown in the chart below.


Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued
Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued

Because Freedom Holding is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth, which averaged 211.4% over the past five years.

Link: These companies may deliever higher future returns at reduced risk.

It is always important to check the financial strength of a company before buying its stock. Investing in companies with poor financial strength have a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a company. Freedom Holding has a cash-to-debt ratio of 4.21, which is in the middle range of the companies in Capital Markets industry. The overall financial strength of Freedom Holding is 4 out of 10, which indicates that the financial strength of Freedom Holding is poor. This is the debt and cash of Freedom Holding over the past years:

Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued
Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued

It poses less risk to invest in profitable companies, especially those that have demonstrated consistent profitability over the long term. A company with high profit margins is also typically a safer investment than one with low profit margins. Freedom Holding has been profitable 5 over the past 10 years. Over the past twelve months, the company had a revenue of $252.5 million and earnings of $1.56 a share. Its operating margin is 42.04%, which ranks better than 78% of the companies in Capital Markets industry. Overall, GuruFocus ranks the profitability of Freedom Holding at 4 out of 10, which indicates poor profitability. This is the revenue and net income of Freedom Holding over the past years:

Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued
Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued

Growth is probably one of the most important factors in the valuation of a company. GuruFocus' research has found that growth is closely correlated with the long-term performance of a company's stock. If a company's business is growing, the company usually creates value for its shareholders, especially if the growth is profitable. Likewise, if a company's revenue and earnings are declining, the value of the company will decrease. Freedom Holding's 3-year average revenue growth rate is better than 99% of the companies in Capital Markets industry. Freedom Holding's 3-year average EBITDA growth rate is 187.5%, which ranks better than 98% of the companies in Capital Markets industry.

Another way to look at the profitability of a company is to compare its return on invested capital and the weighted cost of capital. Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. We want to have the return on invested capital higher than the weighted cost of capital. For the past 12 months, Freedom Holding's return on invested capital is 13.08, and its cost of capital is 8.11. The historical ROIC vs WACC comparison of Freedom Holding is shown below:

Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued
Freedom Holding Stock Shows Every Sign Of Being Significantly Overvalued

Overall, Freedom Holding (NAS:FRHC, 30-year Financials) stock is estimated to be significantly overvalued. The company's financial condition is poor and its profitability is poor. Its growth ranks better than 98% of the companies in Capital Markets industry. To learn more about Freedom Holding stock, you can check out its 30-year Financials here.

To find out the high quality companies that may deliever above average returns, please check out GuruFocus High Quality Low Capex Screener.

This article first appeared on GuruFocus.

Recommended Stories

  • The website for finding 'sugar babies' that Matt Gaetz allegedly met women through was founded by an MIT grad who says 'love is a concept invented by poor people'

    Seeking Arrangement was founded in 2006 by an MIT grad who wanted to formalize what he believed were the unwritten rules of dating as a transaction.

  • Capitol Attack Suspect Ranted About the ‘End Times’ Before Allegedly Ramming Officers

    Getty/Facebook Two weeks before he allegedly rammed his car into two police officers guarding the U.S. Capitol, killing one of them, Noah Green posted an article on his Facebook page titled, “Lull Before the Storm.”“An Intro to the Honorable Elijah Muhammad and his divine warning to us all during these last days of our world as we know it. Satan’s rule over us is up,” the 25-year-old’s apocalyptic post said, linking to an article from Final Call, the official newspaper of the Nation of Islam.Green’s social media posts suggest he was spiraling in the lead up to the attack on Friday. On the eve of his alleged assault, his brother, Brendan Green, told The Washington Post, he sent a worrying text after leaving the apartment where they lived together.“I’m sorry but I’m just going to go and live and be homeless. Thank you for everything that you’ve done. I looked up to you when I was a kid. You inspired me a lot,” the text reportedly read. That message—and the deadly attack that occurred less than 24 hours later—capped off a period that was riddled with red flags. Green’s social media posts described searching for “a spiritual journey” within the Nation of Islam, a religious Muslim sect that the Southern Poverty Law Center classifies as a hate group for its “bizarre theology of innate black superiority over whites” and “deeply racist, antisemitic and anti-gay rhetoric.”Nothing indicated a clear motive for targeting the police, nor the U.S. Capitol building located hours from the stretch of Virginia he had recently called home.But as congressional staff grabbed lunch on Friday, Green allegedly rammed his dark blue sedan into two officers guarding a barricade on a road outside the Capitol.He then jumped out of the car and lunged at officers with a knife, U.S. Capitol Police Chief Yogananda Pittman said, prompting them to fatally shoot him. A senior law enforcement official confirmed to The Daily Beast that Green was the suspect, though he has not yet been officially identified by police. One Capitol Police officer, William “Billy” Evans, died, and a second officer was left hospitalized. He was said to be in stable condition late Friday.Pittman said the suspect was not known to Capitol Police before the attack and there was no indication of “any nexus” to members of Congress. She also said there was no ongoing threat and the suspect didn’t yell anything before being shot.She said that, while an investigation into motive was ongoing, it did not appear to be “terrorism-related.”With the motive still a mystery, further insight into what led to such an attack was found in a series of social media posts the 25-year-old made in the weeks leading up to the incident. In two lengthy March 17 posts on Green’s Facebook profile, which was taken down shortly after the incident, Green wrote about his recent struggles, and said it was a “major goal” to meet Nation of Islam leader Louis Farrakhan.There was no immediate indication that Friday’s attack was religiously motivated, and the Nation of Islam’s Virginia branch and D.C. headquarters did not immediately respond to requests for comment.Green also acknowledged suffering unspecified setbacks in his life recently.“To be honest these past few years have been tough, and these past few months have been tougher,” Green wrote in the March 17 post. “I have been tried with some of the biggest, unimaginable tests in my life. I am currently now unemployed after I left my job partly due to afflictions, but ultimately, in search of a spiritual journey.”Despite the lack of a job, he posted an image of a certificate that said he’d donated $1,085 to the Nation of Islam as a “Saviours’ Day 2021” gift.Green’s brother, Brendan, told the Post that Noah had become paranoid in 2019 and accused football teammates of drugging him with Xanax. He moved out to his own apartment and then abruptly moved to Indianapolis, where he believed there were intruders getting into his apartment. It was around that time that Brendan said he flew out to see his brother and realized his “mind didn’t seem right.”More recently, his brother said, Green up and moved to Botswana and suggested he had tried to take his own life by jumping in front of a car. After he returned home, Noah Green appeared to view the Nation of Islam as a way to keep himself anchored. In his most recent social media posts, Green wrote that he had been faced with “fear, hunger, loss of wealth, and diminution of fruit” in recent months, and was being sustained by faith “centered on the belief of the Honorable Minister Louis Farrakhan as Jesus, the Messiah.”He also alluded to more mainstream trappings of young adulthood. He posted that he had graduated with distinction, landed a good job out of college, and pursued a graduate degree “despite not growing up in the best of circumstances.”Green played football in high school, and a bio from Christopher Newport University said he was born in Fairlea, West Virginia, and has seven brothers and two sisters. Calls to his siblings and parents went unanswered on Friday.Public records show he enrolled in a graduate course at Florida State University this year, after majoring in marketing at Glenville State College.In the Christopher Newport bio, he said his dream vacation spot was Jamaica and the person he’d most like to meet was Malcolm X.“He was always super sweet to me and all of his friends loved him, we were all sad to see him leave Glenville,” Alaina Funk, a friend of the suspect, told The Daily Beast.At one point, Green wrote, perhaps alluding to the alleged incident in 2019, he experienced an “array of concerning symptoms” that he believed were “side effects of drugs I was intaking unknowingly.”He also said he was on track to go into business, but his path was “thwarted.”It was unclear from his Facebook page how recently he became involved with Nation of Islam. Older posts centered around football and college rather than religion. His grandmother, who died in 2019 from a long illness, was Baptist, her obituary said.But, by March, Green’s posts appeared to be consumed by religious warnings about the end days.“I encourage everyone to study Revelations, study the signs of the end times, study who the beast is, study who the anti-Christ is, study who the false prophet is, and study the created images during those times. The Minister is here to save me and the rest of humanity, even if it means facing death,” he wrote on March 17, before ominously ending the post with, “We have a little time.”Court records in Indiana, where he was once listed as living at an Indianapolis address, show that he sought to change his name recently. In December 2020, he filed a petition to legally change his name to Noah Zaeem Muhammad. But after he failed to show up for a hearing earlier this week and the court apparently did not hear from him, the matter was dismissed and the case declared “closed.”—with reporting by Pilar MelendezRead more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.

  • These croquetas in Cuba are explosive. Maker warns about ‘violence’ if not cooked right

    Croquetas in Cuba are blowing up in people’s faces

  • How to tell if your cat has worms and what to do about it

    Cats who have symptoms like vomiting, soft stool, or a loss of appetite may have roundworms, tapeworms, hookworms, or other kinds of worms.

  • UK bans travel from 4 more nations over virus; 39 in all

    The British government is gearing up to ban international arrivals from four more countries — Bangladesh, Kenya, Pakistan and the Philippines — amid concerns over new virus variants but opted against including European nations that are facing a resurgence of the virus. The Department for Transport said Friday the number of countries on its “red list” will reach 39 when the latest restrictions take effect in England beginning April 9. Under the travel bans, international visitors who have departed from or traveled through red-list countries in the preceding 10 days are refused entry into England.

  • A woman got pregnant while she was already pregnant, and delivered her 'super twins' on the same day

    Superfetation is so rare there are only a handful of reported cases. Three extremely unlikely events need to occur to become pregnant while pregnant.

  • Jessica Simpson is still revealing details about her marriage to Nick Lachey years later. Here's a timeline of their relationship.

    Here's a complete timeline of the relationship, marriage, divorce, and recent drama surrounding the beloved early 2000s "Newlyweds" couple.

  • Power play - India wields oil 'weapon' to cut dependence on Saudi

    When India's government last month asked refiners to speed up diversification and reduce dependence on the Middle East - days after OPEC+ said it would maintain production cuts - it sent a message about its clout and foreshadowed changes to the world's energy maps. It was a move that had been in the works for years, fuelled by repeated comments from Indian Oil Minister Dharmendra Pradhan, who in 2015 called oil purchases a "weapon" for his country. When the Organisation of Oil Exporting Countries and Major Producers (OPEC+) extended the production cuts into April, India unsheathed that weapon.

  • Meet Allan Maman: The 21-year-old whose cold emails to Andrew Yang and Mike Bloomberg led to him making memes for their political campaigns

    Maman got jobs with Andrew Yang and Mike Bloomberg by cold-emailing their campaigns. Before that, the 21-year-old was a fidget spinner entrepreneur.

  • Mom killed 6-year-old with cocaine, other drugs for insurance money, Texas police say

    A Texas mom is charged with capital murder in the death of her 6-year-old son.

  • Police identify officer slain in vehicle attack on Capitol as 18-year veteran Willam Evans

    Capitol Police Officer William "Billy" Evans, who served for 18 years, is dead and another officer is injured after a male suspect rammed them with a car at a north entrance to the U.S. Capitol on Friday. The state of play: Acting Capitol Police Chief Yogananda Pittman said Friday that the suspect brandished a knife as he lunged at officers. The officers fired at the suspect, who has since been pronounced dead.Get market news worthy of your time with Axios Markets. Subscribe for free.The other officer who was struck by the car is stable, according to U.S. Capitol Police.House Speaker Nancy Pelosi (D-Calif.) has ordered Capitol flags to half-staff in honor of Evans. President Biden also ordered the White House flags to be flown at half-staff.A lockdown at the Capitol has been lifted, but the area surrounding the incident will continue to be restricted. Biden on Friday said in a statement: "[Dr. Biden] and I were heartbroken to learn of the violent attack at a security checkpoint on the U.S. Capitol grounds, which killed Officer William Evans of the U.S. Capitol Police, and left a fellow officer fighting for his life..." "I have been receiving ongoing briefings from my Homeland Security Advisor, and will be getting further updates as the investigation proceeds," the president added. The big picture: Some security fencing was removed a week ago after heightened security following the Jan 6. attack. National Guard members remain at the U.S. Capitol but in smaller numbers. Members of the Guard were seen on Friday deploying toward the Capitol barrier following the incident.As law enforcement responded to the attack, Capitol staff received a text alert from Capitol Police warning them stay away from exterior doors and windows in the Capitol and to "seek cover" if outdoors.Of note: Biden is away from D.C. and visiting Camp David. The House and Senate are out of session. Large police presence and two stretchers being brought out pic.twitter.com/EmidoLP0PT— Jacqui Heinrich (@JacquiHeinrich) April 2, 2021 🚨🚨A helicopter just landed on the east front of the Capitol. I’ve never seen anything like this before. ever. pic.twitter.com/LxV0mywRSe— Jake Sherman (@JakeSherman) April 2, 2021 Go deeper: In photos: Capitol car ramming attack leaves 2 dead, including police officerWhat they're saying: Members of Congress "horrified" by Capitol car ramming attackLike this article? Get more from Axios and subscribe to Axios Markets for free.

  • There are no victories left to win for US troops in Iraq and Syria. It's time for Biden to bring them home.

    US troops face dangers in both Syria and Iraq, and that military presence cannot influence the political outcome in either country.

  • Flat Earther Busted in Freemason Arson Spree

    Photo Illustration by The Daily Beast/ShutterstockLess than an hour after three Masonic lodges burned in Vancouver, Canada, a suspect appeared to take credit for the blazes.“I just cleaned 3 satanic club houses and nobody could do anything,” Ben Kohlman posted on Facebook on Tuesday morning.Kohlman, 42, has been charged with arson in one of the three blazes, and is expected to face similar charges in the attacks on the other two buildings, the Vancouver Sun reported. And although police have not announced a motive in the arsons, Kohlman’s Facebook page contains anti-Freemason attacks that he shared from conspiracy pages, particularly pages about flat earth theory.The incident wouldn’t even be the first time in recent years that a flat earther attempted to burn down a Masonic lodge. An Australian flat earth convention went off the rails in 2018 when an organizer was accused of the same crime.When a Flat Earther Refused to Concede and All Hell Broke LooseFlat earthers believe—wrongly—that the planet is shaped like a disk and that malevolent figures are trying to trick people into believing they live on a globe. But the conspiracy movement has not reached a consensus about who, exactly, is behind the nefarious plot. While some flat earthers blame the government or invoke anti-Semitic conspiracy theories, others falsely accuse the Freemasons (a fraternal society) of concealing the earth’s true shape.Conspiracy theories about groups like Freemasons are not without consequence. The group has been falsely accused of secretive schemes, leading to Freemasons’ persecution by the Nazi regime, during which fascists linked the fraternity to Judaism in order to allege a “Jewish-Masonic” plot.Mark Sargent, a prominent flat earther who does not advocate arson, told The Daily Beast that Freemasons had attracted some flat earthers’ attention because the group had the reputation of being a secret society, while still maintaining a public presence.“A large section of Flat Earth members are grounded in the general conspiracy world, which means they are always aware of different societies that have been accused of keeping world secrets,” Sargent told The Daily Beast via email. “I feel bad for the Masons because they are by far the most public of the secret societies. The lodges in the U.S., for example are usually large, stone, easy to spot buildings, and are in just about every town you can think of.”Also easy to spot were the three buildings around Vancouver, all of which burned in the early hours of March 30. Although no one was injured, one building was completely destroyed. Approximately 40 minutes after the last fire, Kohlman wrote his Facebook post bragging about “cleaning satanic club houses,” CTV News first reported.It was unclear on Thursday whether Kohlman, who was arrested in Burnaby, has a lawyer.Kohlman’s Facebook contained multiple recent attacks on Freemasons, including a post from a flat earth meme page that falsely implied the small fraternal organization actually controlled the world’s large tech companies, or that they were involved in plots to harm people with vaccinations. He also repeatedly promoted a large flat earth Facebook group and is Facebook friends with Mak Parhar, a prominent Canadian flat earther.Parhar, who did not return a request for comment, made headlines in 2020, first when his yoga studio was shut down after he falsely claimed that yoga could cure COVID-19. Soon thereafter, he became the subject of a criminal investigation after he filmed himself entering a hospital’s COVID-19 area without authorization. Parhar was eventually arrested in November after he allegedly traveled to the U.S. for a flat earth conference and failed to quarantine after his return to Canada. (He is currently fighting the case using a bogus legal theory that claims he doesn’t have to follow certain laws or pay taxes.)Incredibly, the Tuesday arsons were not the first time a flat earther was accused of burning a Masonic lodge. In 2018, as CNET reported at the time, a lodge fire upended Australia’s first attempted flat earth conference.While the conference was still in its planning stages, its two organizers reportedly got in an argument, prompting one (nicknamed “Tigger”) to get drunk and set fire to a Masonic lodge.“Tigger just lost the plot,” his co-organizer told CNET that year. “He tried to burn down a Masonic lodge and got arrested.”In actuality, the incident could have been worse. Tigger allegedly doused the door with a quick-burning fuel that burned out before it could spread to the rest of the building, his associate said. (Tigger confirmed the broad strokes of the incident to CNET, blaming drunkenness for the arson.)The Masonic lodge in question posted on Facebook that they’d experienced an attack, but that members didn’t know whether the arsonist was angry at their specific building, or Freemasons in general.“We don't have any idea why he carried out this act,” the lodge told CNET. “It would be nice to know why.”In Canada, a Freemason organization condemned the fires. Dave Goddard, spokesperson for the region’s Grand Lodge of B.C. and Yukon, told CTV News that Freemasons were not what Kohlman seemed to believe they were.“We as Freemasons don’t outwardly express hate toward anybody,” Goddard said. “This individual obviously has issues he needs to deal with.”Read more at The Daily Beast.Got a tip? Send it to The Daily Beast hereGet our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.

  • EXPLAINER: Who are the rebels in northern Mozambique?

    With more than a week of fierce fighting including beheaded bodies in the streets, the battle for the northern Mozambique town of Palma has highlighted the southern Africa country’s insurgency and threats to its multibillion-dollar investments. Here's a look at what is known about the rebel group and the challenges facing Mozambique. Despite rich natural resources, the province has been one of Mozambique's least developed, with low levels of education, health services, and nutrition.

  • Teens said beauty YouTuber James Charles sent them sexual messages. Here's how the explosive sexting scandal unfolded.

    Some of James Charles' early accusers were met with skepticism online, but they're being re-examined after Charles apologized.

  • AstraZeneca's COVID-19 shot will come too late for the US

    Dr. Anthony Fauci said it's "still up in the air" if the US would actually use AstraZeneca's vaccine even if regulators here authorize the shot.

  • Users are reporting that multiple Microsoft products are down

    Microsoft Office 365's status page said, "We're investigating a potential DNS issue and are evaluating our mitigation options."

  • Williams had seven seasons left on his UNC contract. It never mentions retirement.

    Williams signed a contract extension in 2018.

  • As WHO highlights COVID animal origins, China wildlife crackdown needs more teeth: experts

    China and its neighbours must not only crack down on wildlife trade but also shut legal loopholes that allow disease-prone species to be farmed, experts said after an investigation team concluded that COVID-19 most likely originated in animals. Tong Yigang, a Chinese animal disease expert involved in the joint study, said the findings vindicated Beijing's decision last year to ban trade in wildlife for human consumption. But the report also drew attention to the wildlife farms still allowed to operate legally, serving the traditional Chinese medicine (TCM) industry and the fur trade - and creating more spillover risks.

  • Michael Jordan speaks out on Roy Williams retirement: ‘He meant so much to basketball’

    Observer Exclusive: UNC legend and Charlotte Hornets owner Michael Jordan discusses Roy Williams’ retirement. His favorite Williams memories had nothing to do with basketball.