As of May 24, 2025, JPmorgan US Smaller Companies Investment Trust PLC's estimated intrinsic value ranges from $217.36 to $342.81 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $342.81 | -11.9% |
| Discounted Cash Flow (5Y) | $324.38 | -16.6% |
| Dividend Discount Model (Multi-Stage) | $217.36 | -44.1% |
| Dividend Discount Model (Stable) | $241.35 | -38.0% |
| Earnings Power Value | $258.46 | -33.6% |
Is JPmorgan US Smaller Companies Investment Trust PLC (JUSC.L) undervalued or overvalued?
With the current market price at $389.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate JPmorgan US Smaller Companies Investment Trust 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 | 6.0% | 7.0% |
| Adjusted beta | 0.87 | 0.97 |
| Cost of equity | 9.2% | 11.8% |
| Cost of debt | 4.0% | 5.2% |
| Tax rate | 1.2% | 1.5% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 8.7% | 11.1% |
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 | $324 | $166M | 70.1% |
| 10-Year Growth | $343 | $176M | 48.7% |
| 5-Year EBITDA | $184 | $91M | 45.5% |
| 10-Year EBITDA | $240 | $121M | 25.3% |
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 | $13M |
| Discount Rate (WACC) | 11.1% - 8.7% |
| Enterprise Value | $115M - $147M |
| Net Debt | $(7)M |
| Equity Value | $122M - $154M |
| Outstanding Shares | 1M |
| Fair Value | $228 - $288 |
| Selected Fair Value | $258.46 |
| Metric | Value |
|---|---|
| Market Capitalization | $208M |
| Enterprise Value | $200M |
| Trailing P/E | 16.93 |
| Forward P/E | 16.09 |
| Trailing EV/EBITDA | 4.55 |
| Current Dividend Yield | 86.12% |
| Dividend Growth Rate (5Y) | 2.82% |
| Debt-to-Equity Ratio | 0.11 |
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% | $102.84 |
| Discounted Cash Flow (5Y) | 25% | $81.09 |
| Dividend Discount Model (Multi-Stage) | 20% | $43.47 |
| Dividend Discount Model (Stable) | 15% | $36.20 |
| Earnings Power Value | 10% | $25.85 |
| Weighted Average | 100% | $289.46 |
Based on our comprehensive valuation analysis, JPmorgan US Smaller Companies Investment Trust PLC's weighted average intrinsic value is $289.46, which is approximately 25.6% below the current market price of $389.00.
Key investment considerations:
Given these factors, we believe JPmorgan US Smaller Companies Investment Trust PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.