As of June 21, 2025, Gulf Investment Fund PLC's estimated intrinsic value ranges from $2.79 to $7.11 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $6.59 | +191.6% |
| Discounted Cash Flow (5Y) | $5.81 | +157.3% |
| Dividend Discount Model (Multi-Stage) | $2.79 | +23.4% |
| Dividend Discount Model (Stable) | $4.25 | +88.2% |
| Earnings Power Value | $7.11 | +214.8% |
Is Gulf Investment Fund PLC (GIF.L) undervalued or overvalued?
With the current market price at $2.26, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Gulf Investment Fund PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 1.43 | 1.46 |
| Cost of equity | 11.8% | 14.5% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 0.2% | 0.3% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 8.4% | 9.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $6 | $225M | 68.6% |
| 10-Year Growth | $7 | $256M | 48.1% |
| 5-Year EBITDA | $4 | $143M | 50.5% |
| 10-Year EBITDA | $5 | $190M | 30.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $25M |
| Discount Rate (WACC) | 9.7% - 8.4% |
| Enterprise Value | $256M - $296M |
| Net Debt | $(1)M |
| Equity Value | $257M - $297M |
| Outstanding Shares | 39M |
| Fair Value | $7 - $8 |
| Selected Fair Value | $7.11 |
| Metric | Value |
|---|---|
| Market Capitalization | $88M |
| Enterprise Value | $87M |
| Trailing P/E | 3.49 |
| Forward P/E | 4.98 |
| Trailing EV/EBITDA | 5.45 |
| Current Dividend Yield | 354.44% |
| Dividend Growth Rate (5Y) | 0.96% |
| Debt-to-Equity Ratio | 1.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $1.98 |
| Discounted Cash Flow (5Y) | 25% | $1.45 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.56 |
| Dividend Discount Model (Stable) | 15% | $0.64 |
| Earnings Power Value | 10% | $0.71 |
| Weighted Average | 100% | $5.34 |
Based on our comprehensive valuation analysis, Gulf Investment Fund PLC's weighted average intrinsic value is $5.34, which is approximately 136.2% above the current market price of $2.26.
Key investment considerations:
Given these factors, we believe Gulf Investment Fund PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.