Enterprise Products Partners LP Valuation – July 2018 $EPD

Company Profile (excerpt from Reuters): Enterprise Products Partners L.P. (Enterprise), incorporated on April 9, 1998, is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company owns and operates certain NGLs related businesses of Enterprise Products Company (EPCO). The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EPD – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $60,574,911,153 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.77 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 75.66% Pass
6. Moderate PEmg Ratio PEmg < 20 20.61 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.62 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.77 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -11.24 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.34
MG Growth Estimate 0.11%
MG Value $11.70
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $19.47
MG Value based on 0% Growth $11.41
Market Implied Growth Rate 6.05%
Current Price $27.67
% of Intrinsic Value 236.40%

Enterprise Products Partners L.P. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.33 in 2014 to an estimated $1.34 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.05% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Enterprise Products Partners L.P. revealed the company was trading above its Graham Number of $18.58. The company pays a dividend of $1.67 per share, for a yield of 6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.61, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-11.82.

Enterprise Products Partners L.P. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$11.82
Graham Number $18.58
PEmg 20.61
Current Ratio 0.77
PB Ratio 2.62
Current Dividend $1.67
Dividend Yield 6.03%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $6,791,000,000
Total Current Liabilities $8,839,600,000
Long-Term Debt $23,016,400,000
Total Assets $55,482,300,000
Intangible Assets $9,481,600,000
Total Liabilities $32,517,400,000
Shares Outstanding (Diluted Average) 2,177,200,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.47
Dec2017 $1.30
Dec2016 $1.20
Dec2015 $1.26
Dec2014 $1.47
Dec2013 $1.41
Dec2012 $1.35
Dec2011 $1.19
Dec2010 $0.58
Dec2009 $0.50
Dec2008 $0.92
Dec2007 $0.48
Dec2006 $0.61
Dec2005 $0.46
Dec2004 $0.44
Dec2003 $0.21
Dec2002 $0.24
Dec2001 $0.70
Dec2000 $0.66
Dec1999 $0.41
Dec1998 $0.05

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.34
Dec2017 $1.30
Dec2016 $1.31
Dec2015 $1.35
Dec2014 $1.33
Dec2013 $1.18
Dec2012 $1.01
Dec2011 $0.80
Dec2010 $0.61
Dec2009 $0.62
Dec2008 $0.65
Dec2007 $0.49
Dec2006 $0.46
Dec2005 $0.39
Dec2004 $0.38
Dec2003 $0.39
Dec2002 $0.46

Recommended Reading:

Other ModernGraham posts about the company

Enterprise Products Partners LP Valuation – August 2016 $EPD
Enterprise Products Partners LP Analysis – Initial Coverage $EPD

Other ModernGraham posts about related companies

Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG
Nabors Industries Ltd Valuation – June 2018 $NBR
QEP Resources Inc Valuation – June 2018 $QEP
Pioneer Natural Resources Co Valuation – June 2018 $PXD
Schlumberger Ltd Valuation – June 2018 $SLB
Anadarko Petroleum Corp Valuation – June 2018 $APC
Apache Corp Valuation – June 2018 $APA

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Enterprise Products Partners LP Valuation – August 2016 $EPD

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Enterprise Products Partners LP (EPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; offshore production platforms; petrochemical and refined products transportation, storage and terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico.

EPD Chart

EPD data by YCharts

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Downloadable PDF version of this valuation:

ModernGraham Valuation of EPD – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $55,863,105,086 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.85 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 102.64% Pass
6. Moderate PEmg Ratio PEmg < 20 20.81 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.55 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.85 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -20.75 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPD value chart August 2016

EPSmg $1.28
MG Growth Estimate 3.99%
MG Value $21.05
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $18.53
MG Value based on 0% Growth $10.86
Market Implied Growth Rate 6.15%
Current Price $26.59
% of Intrinsic Value 126.30%

Enterprise Products Partners L.P. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.01 in 2012 to an estimated $1.28 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.15% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Enterprise Products Partners L.P. revealed the company was trading above its Graham Number of $16.1. The company pays a dividend of $1.55 per share, for a yield of 5.8%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.81, which was below the industry average of 55.24, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-11.37.

Enterprise Products Partners L.P. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

EPD charts August 2016

Net Current Asset Value (NCAV) -$11.37
Graham Number $16.10
PEmg 20.81
Current Ratio 0.85
PB Ratio 2.55
Current Dividend $1.55
Dividend Yield 5.83%
Number of Consecutive Years of Dividend Growth 20

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Total Current Assets $5,969,700,000
Total Current Liabilities $7,026,000,000
Long-Term Debt $21,922,100,000
Total Assets $51,400,800,000
Intangible Assets $9,693,500,000
Total Liabilities $29,676,600,000
Shares Outstanding (Diluted Average) 2,085,100,000

Earnings Per Share History

Next Fiscal Year Estimate $1.11
Dec2015 $1.26
Dec2014 $1.47
Dec2013 $1.41
Dec2012 $1.35
Dec2011 $1.19
Dec2010 $0.58
Dec2009 $0.50
Dec2008 $0.92
Dec2007 $0.48
Dec2006 $0.61
Dec2005 $0.46
Dec2004 $0.44
Dec2003 $0.21
Dec2002 $0.24
Dec2001 $0.70
Dec2000 $0.66
Dec1999 $0.41
Dec1998 $0.05

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.28
Dec2015 $1.35
Dec2014 $1.33
Dec2013 $1.18
Dec2012 $1.01
Dec2011 $0.80
Dec2010 $0.61
Dec2009 $0.62
Dec2008 $0.65
Dec2007 $0.49
Dec2006 $0.46
Dec2005 $0.39
Dec2004 $0.38
Dec2003 $0.39
Dec2002 $0.46
Dec2001 $0.50
Dec2000 $0.34

Recommended Reading:

Other ModernGraham posts about the company

Enterprise Products Partners LP Analysis – Initial Coverage $EPD

Other ModernGraham posts about related companies

Tidewater Inc Valuation – August 2016 $TDW
Occidental Petroleum Corp Valuation – August 2016 $OXY
Valero Energy Corporation – August 2016 $VLO
Chevron Corp Valuation – August 2016 $CVX
Exxon Mobil Corporation Valuation – August 2016 $XOM
National-Oilwell Varco Inc Valuation – August 2016 $NOV
Newfield Exploration Co Valuation – August 2016 $NFX
EOG Resources Inc Valuation – July 2016 $EOG
Noble Corp PLC Valuation – July 2016 $NE
Baker Hughes Inc Valuation – July 2016 $BHI

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Enterprise Products Partners LP Analysis – Initial Coverage $EPD

Enterprise_products_logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – July 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Enterprise Products Partners LP (EPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Enterprise Products Partners L.P. is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products. The Company operates in five segments: NGL Pipelines & Services segment includes its natural gas processing plants and related NGL marketing activities; Onshore Natural Gas Pipelines & Services segment includes approximately 19,300 miles of onshore natural gas pipeline systems; Onshore Crude Oil Pipelines & Services segment includes approximately 5,400 miles of onshore crude oil pipelines, crude oil storage terminals; Offshore Pipelines & Services segment serves drilling and development regions, including deepwater production fields and Petrochemical & Refined Products Services segment includes propylene fractionation and related operations, including approximately 680 miles of pipelines. Its asset portfolio includes 24 natural gas processing plants and 22 NGL and propylene fractionators.

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Defensive Investor – must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – FAIL
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 3/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – FAIL
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – FAIL
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $28.01
MG Value $37.09
MG Opinion Fairly Valued
Value Based on 3% Growth $19.26
Value Based on 0% Growth $11.29
Market Implied Growth Rate 6.30%
Net Current Asset Value (NCAV) -$11.31
PEmg 21.09
Current Ratio 0.75
PB Ratio 2.78

Balance Sheet – March 2015

Current Assets $4,435,000,000
Current Liabilities $5,876,000,000
Total Debt $20,192,000,000
Total Assets $46,505,000,000
Intangible Assets $8,458,000,000
Total Liabilities $26,670,000,000
Outstanding Shares 1,966,700,000

Earnings Per Share

2015 (estimate) $1.18
2014 $1.47
2013 $1.41
2012 $1.36
2011 $1.19
2010 $0.58
2009 $0.50
2008 $0.92
2007 $0.48
2006 $0.61
2005 $0.46

Earnings Per Share – ModernGraham

2015 (estimate) $1.33
2014 $1.34
2013 $1.18
2012 $1.01
2011 $0.81
2010 $0.62

Dividend History

Free Cash Flow

Conclusion:

Enterprise Products Partners LP is not suitable for either the Defensive Investor or the Enterprising Investor.  The Defensive Investor is concerned with the low current ratio, along with the high PEmg and PB ratios.  The Enterprising Investor is concerned with the level of debt relative to the current assets.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should explore other opportunities or proceed cautiously with a speculative attitude.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.81 in 2011 to an estimated $1.33 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 6.3% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Enterprise Products Partners LP (EPD)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

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Flowserve Corp Valuation – January 2019 $FLS

Company Profile (excerpt from Reuters): Flowserve Corporation, incorporated on May 1, 1912, is a manufacturer and aftermarket service provider of flow control systems. The Company’s segments include Engineered Product Division (EPD), Industrial Product Division (IPD) and Flow Control Division (FCD). The Company’s geographic segment includes North America, Europe, Asia Pacific, Middle East and Africa, and Latin America. The Company develops and manufactures precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in its customer’s critical processes. The Company’s product portfolio of pumps, valves, seals, automation and aftermarket services supports infrastructure industries, including oil and gas, chemical, power generation (including nuclear, fossil and renewable) and water management, as well as certain general industrial markets where its products and services add value. The Company offers a range of aftermarket equipment services, such as installation, diagnostics, repair and retrofitting through manufacturing platform and network of Quick Response Centers (QRCs). The Company’s products include oil and gas, general industries, chemical, power generation and water management.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FLS – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,975,183,199 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.24 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -72.74% Fail
6. Moderate PEmg Ratio PEmg < 20 36.58 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.06 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.24 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.12 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.04
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $15.07
MG Value based on 0% Growth $8.83
Market Implied Growth Rate 14.04%
Current Price $38.02
% of Intrinsic Value N/A

Flowserve Corp does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $3.21 in 2014 to an estimated $1.04 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 14.04% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Flowserve Corp revealed the company was trading above its Graham Number of $16.73. The company pays a dividend of $0.76 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 36.58, which was above the industry average of 20.63. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-4.95.

Flowserve Corp scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$4.95
Graham Number $16.73
PEmg 36.58
Current Ratio 2.24
PB Ratio 3.06
Current Dividend $0.76
Dividend Yield 2.00%
Number of Consecutive Years of Dividend Growth 11

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $2,324,667,000
Total Current Liabilities $1,040,080,000
Long-Term Debt $1,436,746,000
Total Assets $4,605,064,000
Intangible Assets $1,399,632,000
Total Liabilities $2,974,337,000
Shares Outstanding (Diluted Average) 131,350,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.98
Dec2017 $0.02
Dec2016 $1.01
Dec2015 $1.93
Dec2014 $3.72
Dec2013 $3.41
Dec2012 $2.84
Dec2011 $2.55
Dec2010 $2.29
Dec2009 $2.53
Dec2008 $2.58
Dec2007 $1.49
Dec2006 $0.67
Dec2005 $0.10
Dec2004 $0.16
Dec2003 $0.27
Dec2002 $0.16
Dec2001 -$0.14
Dec2000 $0.12
Dec1999 $0.11
Dec1998 $0.41

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.04
Dec2017 $1.39
Dec2016 $2.24
Dec2015 $2.87
Dec2014 $3.21
Dec2013 $2.88
Dec2012 $2.59
Dec2011 $2.41
Dec2010 $2.20
Dec2009 $1.93
Dec2008 $1.42
Dec2007 $0.73
Dec2006 $0.33
Dec2005 $0.14
Dec2004 $0.15
Dec2003 $0.13
Dec2002 $0.08

Recommended Reading:

Other ModernGraham posts about the company

Flowserve Corp Valuation – February 2018 $FLS
Flowserve Corporation Valuation – May 2016 $FLS
11 Best Stocks For Value Investors This Week – 11/21/15
Flowserve Corp Valuation – November 2015 Update $FLS
The Best Companies of the Construction Industry – October 2015

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SNC-Lavalin Group Inc Valuation – August 2018 $TSE:SNC
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Aecon Group Inc Valuation – July 2018 $TSE:ARE

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Surge Energy Inc Valuation – July 2018 $TSE:SGY

Company Profile (excerpt from Reuters): Surge Energy Inc is a Canada-based exploration and production company (E&P). The Company is positioned to provide shareholders with long term sustainability by exploiting its assets in a financially disciplined manner and by acquiring additional long life oil and gas assets of a similar nature. Its assets are comprised primarily of operated oil-weighted properties characterized by a promising original oil-in-place (OOIP) crude oil reservoirs with low recovery factors and an inventory of around 700 gross low risk development drilling locations and several water flood projects. The Company continues to identify and pursue acquisitions with synergistic characteristics such as existing long life producing assets or opportunities with low risk upside potential.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SGY – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $563,587,892 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.98 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -80.00% Fail
6. Moderate PEmg Ratio PEmg < 20 -17.50 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.74 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.98 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -333.81 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg -$0.14
MG Growth Estimate 6.32%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth -$2.03
MG Value based on 0% Growth -$1.19
Market Implied Growth Rate -13.00%
Current Price $2.45
% of Intrinsic Value N/A

Surge Energy Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-0.24 in 2014 to an estimated $-0.14 for 2018. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Surge Energy Inc revealed the company was trading below its Graham Number of $2.87. The company pays a dividend of $0.09 per share, for a yield of 3.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was -17.5, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.84.

Surge Energy Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$1.84
Graham Number $2.87
PEmg -17.50
Current Ratio 0.98
PB Ratio 0.74
Current Dividend $0.09
Dividend Yield 3.71%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $41,398,000
Total Current Liabilities $42,175,000
Long-Term Debt $259,370,000
Total Assets $1,237,370,000
Intangible Assets $0
Total Liabilities $470,240,000
Shares Outstanding (Diluted Average) 233,007,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.11
Dec2017 -$0.03
Dec2016 -$0.14
Dec2015 -$0.97
Dec2014 -$0.17
Dec2013 -$0.10
Dec2012 -$0.75
Dec2011 $0.04
Dec2010 -$0.21
Dec2009 -$0.13
Dec2008 $0.45
Dec2007 $0.11
Dec2006 $0.34
Dec2005 $0.61
Dec2004 $0.46
Dec2003 $0.29
Dec2002 $0.06
Dec2001 $0.18
Dec2000 $0.18
Dec1999 $0.02
Dec1998 -$0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.14
Dec2017 -$0.27
Dec2016 -$0.40
Dec2015 -$0.49
Dec2014 -$0.24
Dec2013 -$0.26
Dec2012 -$0.27
Dec2011 $0.00
Dec2010 $0.02
Dec2009 $0.18
Dec2008 $0.36
Dec2007 $0.33
Dec2006 $0.41
Dec2005 $0.40
Dec2004 $0.28
Dec2003 $0.17
Dec2002 $0.11

Recommended Reading:

Other ModernGraham posts about the company

Surge Energy Inc Valuation – Initial Coverage $TSE:SGY

Other ModernGraham posts about related companies

Imperial Oil Ltd Valuation – July 2018 $IMO
CES Energy Solutions Corp – July 2018 $TSE-CEU
WPX Energy Inc Valuation – July 2018 $WPX
Magellan Midstream Partners LP Valuation – July 2018 $MMP
Ensco PLC Valuation – July 2018 $ESV
Enterprise Products Partners LP Valuation – July 2018 $EPD
Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Secure Energy Services Inc Valuation – July 2018 $TSE-SES

Company Profile (excerpt from Reuters): Secure Energy Services Inc is a Canada-based energy services company. It owns and operates midstream infrastructure and provides environmental services and products to upstream oil and natural gas companies operating in Western Canada and certain regions in the United States. It operates through three divisions. The Processing, Recovery and Disposal division owns and operates midstream infrastructure that provides processing, storing, shipping and marketing of crude oil, oilfield waste disposal and recycling. Its Drilling Services division provides equipment and product solutions for drilling, completion and production operations for oil and gas producers. Its Onsite Services division includes Environmental services, which provide pre-drilling assessment planning, drilling waste management, and remediation and reclamation assessment services; Integrated Fluid Solutions, which include water management, and pumping and storage solutions, and Projects, which include pipeline integrity.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SES – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,278,502,426 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.69 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -237.93% Fail
6. Moderate PEmg Ratio PEmg < 20 -35.73 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.49 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.69 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.17 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg -$0.22
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth -$3.19
MG Value based on 0% Growth -$1.87
Market Implied Growth Rate -22.11%
Current Price $7.86
% of Intrinsic Value N/A

Secure Energy Services Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $0.28 in 2014 to an estimated $-0.22 for 2018. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Secure Energy Services Inc revealed the company was trading above its Graham Number of $3.96. The company pays a dividend of $0.25 per share, for a yield of 3.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was -35.73, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.9.

Secure Energy Services Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$1.90
Graham Number $3.96
PEmg -35.73
Current Ratio 1.69
PB Ratio 1.49
Current Dividend $0.25
Dividend Yield 3.19%
Number of Consecutive Years of Dividend Growth 1

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $385,883,000
Total Current Liabilities $227,844,000
Long-Term Debt $342,673,000
Total Assets $1,579,907,000
Intangible Assets $58,849,000
Total Liabilities $701,374,000
Shares Outstanding (Diluted Average) 166,080,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.13
Dec2017 -$0.21
Dec2016 -$0.32
Dec2015 -$1.20
Dec2014 $0.25
Dec2013 $0.35
Dec2012 $0.33
Dec2011 $0.27
Dec2010 $0.09
Dec2009 -$0.07
Dec2008 -$0.05

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.22
Dec2017 -$0.34
Dec2016 -$0.31
Dec2015 -$0.20
Dec2014 $0.28
Dec2013 $0.27
Dec2012 $0.19
Dec2011 $0.09
Dec2010 $0.00
Dec2009 -$0.04
Dec2008 -$0.02

Recommended Reading:

Other ModernGraham posts about the company

Secure Energy Services Inc Valuation – Initial Coverage $TSE:SES

Other ModernGraham posts about related companies

Imperial Oil Ltd Valuation – July 2018 $IMO
CES Energy Solutions Corp – July 2018 $TSE-CEU
WPX Energy Inc Valuation – July 2018 $WPX
Magellan Midstream Partners LP Valuation – July 2018 $MMP
Ensco PLC Valuation – July 2018 $ESV
Enterprise Products Partners LP Valuation – July 2018 $EPD
Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

CIRCOR International Inc Valuation – July 2018 $CIR

Company Profile (excerpt from Reuters): CIRCOR International, Inc. (CIRCOR), incorporated on July 1, 1999, designs, manufactures and markets engineered products and sub-systems for markets, including oil and gas, aerospace, power and process, and industrial solutions. The Company operates through two segments: CIRCOR Energy (Energy segment (Energy)) and CIRCOR Advanced Flow Solutions (Advanced Flow Solutions segment (AFS)). The Company sells its products through approximately 800 distributors or representatives, as well as directly to end user customers. As of December 31, 2016, the Company operated 19 manufacturing facilities that are located in North America, Western Europe, Morocco and India.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CIR – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $829,949,403 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.32 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -47.63% Fail
6. Moderate PEmg Ratio PEmg < 20 62.33 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.50 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.32 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.46 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.69
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $10.03
MG Value based on 0% Growth $5.88
Market Implied Growth Rate 26.91%
Current Price $43.13
% of Intrinsic Value N/A

CIRCOR International, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings growth over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.34 in 2014 to an estimated $0.69 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 26.91% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into CIRCOR International, Inc. revealed the company was trading above its Graham Number of $15.48. The company pays a dividend of $0.15 per share, for a yield of 0.3% Its PEmg (price over earnings per share – ModernGraham) was 62.33, which was above the industry average of 49.12. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-34.01.

CIRCOR International, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$34.01
Graham Number $15.48
PEmg 62.33
Current Ratio 2.32
PB Ratio 1.50
Current Dividend $0.15
Dividend Yield 0.35%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $584,913,000
Total Current Liabilities $252,115,000
Long-Term Debt $819,779,000
Total Assets $1,839,185,000
Intangible Assets $983,308,000
Total Liabilities $1,265,192,000
Shares Outstanding (Diluted Average) 20,005,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.35
Dec2017 $0.70
Dec2016 $0.61
Dec2015 $0.58
Dec2014 $2.84
Dec2013 $2.67
Dec2012 $1.76
Dec2011 $2.10
Dec2010 $0.73
Dec2009 $0.34
Dec2008 -$3.51
Dec2007 $2.27
Dec2006 $1.80
Dec2005 $1.27
Dec2004 $0.74
Dec2003 $1.14
Dec2002 $1.00
Dec2001 $1.04
Dec2000 $0.78
Jun1999 $0.88

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.69
Dec2017 $1.07
Dec2016 $1.40
Dec2015 $1.86
Dec2014 $2.34
Dec2013 $1.90
Dec2012 $1.10
Dec2011 $0.65
Dec2010 $0.05
Dec2009 -$0.04
Dec2008 $0.01
Dec2007 $1.67
Dec2006 $1.31
Dec2005 $1.05
Dec2004 $0.94
Dec2003 $1.02
Dec2002 $0.88

Recommended Reading:

Other ModernGraham posts about the company

CIRCOR International Inc Valuation – Initial Coverage $CIR

Other ModernGraham posts about related companies

Imperial Oil Ltd Valuation – July 2018 $IMO
CES Energy Solutions Corp – July 2018 $TSE-CEU
WPX Energy Inc Valuation – July 2018 $WPX
Magellan Midstream Partners LP Valuation – July 2018 $MMP
Ensco PLC Valuation – July 2018 $ESV
Enterprise Products Partners LP Valuation – July 2018 $EPD
Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

SEACOR Holdings Inc Valuation – July 2018 $CKH

Company Profile (excerpt from Reuters): SEACOR Holdings Inc., incorporated on November 7, 1989, is a diversified holding company. The Company is engaged in the business of transportation and logistics, alcohol manufacturing, merchandising, and risk management consultancy. The Company’s segments include, Inland River Services, Shipping Services and Illinois Corn Processing. Inland River Services segment operates river transportation equipment used for moving agricultural and industrial commodities and petroleum and chemical products. Shipping Services segment operates a fleet of United States flag marine transportation related assets. Illinois Corn Processing segment produces alcohol used in the food, beverage, industrial and petrochemical end-markets. The Company also offers emergency and crisis services, lending and leasing activities, and noncontrolling investments in various other businesses.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CKH – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $964,152,488 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.00 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -130.82% Fail
6. Moderate PEmg Ratio PEmg < 20 -70.31 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.47 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 4.00 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.27 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg -$0.76
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$10.98
MG Value based on 0% Growth -$6.44
Market Implied Growth Rate -39.41%
Current Price $53.25
% of Intrinsic Value N/A

Seacor Holdings, Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $3.65 in 2014 to an estimated $-0.76 for 2018. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Seacor Holdings, Inc. revealed the company was trading above its Graham Number of $51.34. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -70.31, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-12.52.

Seacor Holdings, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$12.52
Graham Number $51.34
PEmg -70.31
Current Ratio 4.00
PB Ratio 1.47
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $555,187,000
Total Current Liabilities $138,759,000
Long-Term Debt $530,909,000
Total Assets $1,655,924,000
Intangible Assets $59,672,000
Total Liabilities $838,088,000
Shares Outstanding (Diluted Average) 22,588,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.37
Dec2017 $3.31
Dec2016 -$12.76
Dec2015 -$3.94
Dec2014 $4.71
Dec2013 $1.82
Dec2012 $2.95
Dec2011 $1.91
Dec2010 $11.25
Dec2009 $6.57
Dec2008 $9.25
Dec2007 $9.04
Dec2006 $8.44
Dec2005 $6.95
Dec2004 $1.08
Dec2003 $0.63
Dec2002 $2.28
Dec2001 $3.43
Dec2000 $1.92
Dec1999 $1.69
Dec1998 $5.50

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.76
Dec2017 -$2.34
Dec2016 -$3.92
Dec2015 $0.83
Dec2014 $3.65
Dec2013 $3.71
Dec2012 $5.24
Dec2011 $6.79
Dec2010 $9.12
Dec2009 $8.05
Dec2008 $8.18
Dec2007 $6.84
Dec2006 $5.12
Dec2005 $3.26
Dec2004 $1.57
Dec2003 $1.87
Dec2002 $2.65

Recommended Reading:

Other ModernGraham posts about the company

Seacor Holdings Inc Valuation – Initial Coverage $CKH

Other ModernGraham posts about related companies

Imperial Oil Ltd Valuation – July 2018 $IMO
CES Energy Solutions Corp – July 2018 $TSE-CEU
WPX Energy Inc Valuation – July 2018 $WPX
Magellan Midstream Partners LP Valuation – July 2018 $MMP
Ensco PLC Valuation – July 2018 $ESV
Enterprise Products Partners LP Valuation – July 2018 $EPD
Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Inter Pipeline Ltd Valuation – July 2018 $TSE:IPL

Company Profile (excerpt from Reuters): Inter Pipeline Ltd. is a petroleum transportation, storage and natural gas liquids processing business. The Company’s segments include oil sands transportation business, conventional oil pipelines business, natural gas liquids (NGL) processing business and bulk liquid storage business. The Company geographical segments include Canada and Europe. The oil sands transportation business consists of the Cold Lake, Corridor and Polaris pipeline systems that transport petroleum products and provide related blending and handling services in Alberta. The conventional oil pipelines business involves the transportation, storage and processing of hydrocarbons, as well as midstream marketing blending and handling services. The NGL processing business consists of processing natural gas to extract NGLs and the processing of oil sands upgrader off gas to extract an NGL and olefin mix. The bulk liquid storage business involves the storage and handling of bulk liquid products.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSX-IPL – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $9,415,412,517 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.15 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 65.61% Pass
6. Moderate PEmg Ratio PEmg < 20 17.90 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.62 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.15 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -2.33 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.37
MG Growth Estimate 14.17%
MG Value $50.36
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $19.82
MG Value based on 0% Growth $11.62
Market Implied Growth Rate 4.70%
Current Price $24.47
% of Intrinsic Value 48.59%

Inter Pipeline Ltd does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.7 in 2014 to an estimated $1.37 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 4.7% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Inter Pipeline Ltd revealed the company was trading above its Graham Number of $17.37. The company pays a dividend of $1.63 per share, for a yield of 6.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 17.9, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-17.32.

Inter Pipeline Ltd receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$17.32
Graham Number $17.37
PEmg 17.90
Current Ratio 0.15
PB Ratio 2.62
Current Dividend $1.63
Dividend Yield 6.66%
Number of Consecutive Years of Dividend Growth 9

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $299,500,000
Total Current Liabilities $1,965,500,000
Long-Term Debt $3,889,800,000
Total Assets $10,496,300,000
Intangible Assets $661,900,000
Total Liabilities $6,920,300,000
Shares Outstanding (Diluted Average) 382,300,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.47
Dec2017 $1.41
Dec2016 $1.31
Dec2015 $1.28
Dec2014 $1.02
Dec2013 -$0.20
Dec2012 $1.14
Dec2011 $0.95
Dec2010 $0.92
Dec2009 $0.66
Dec2008 $1.12
Dec2007 -$0.39
Dec2006 $0.65
Dec2005 $0.48
Dec2004 $0.52
Dec2003 $0.13
Dec2002 $0.28
Dec2001 $0.11
Dec2000 $0.12
Dec1999 -$0.01
Dec1998 $0.09

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.37
Dec2017 $1.20
Dec2016 $1.03
Dec2015 $0.87
Dec2014 $0.70
Dec2013 $0.59
Dec2012 $0.98
Dec2011 $0.82
Dec2010 $0.70
Dec2009 $0.56
Dec2008 $0.50
Dec2007 $0.22
Dec2006 $0.48
Dec2005 $0.37
Dec2004 $0.29
Dec2003 $0.16
Dec2002 $0.15

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

World Fuel Services Corp Valuation – July 2018 $INT

Company Profile (excerpt from Reuters): World Fuel Services Corporation, incorporated on July 20, 1984, is engaged in providing aviation, marine and land energy, logistics and technology solutions to customers and suppliers around the world. The Company operates through three segments: Aviation, Marine and Land. In its Aviation segment, the Company offers fuel and related products and services to commercial airlines, second and third tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets and the United States and foreign Governments, as well as intergovernmental organizations. In its land segment, the Company offers fuel, crude oil, lubricants, power solutions through its global energy management service offerings, natural gas and related products and services to customers. Under marine segment, it offers fuel, lubricants and related products and services to customers, including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the United States and foreign governments, as well as other fuel suppliers.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of INT – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,496,629,367 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.41 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -81.95% Fail
6. Moderate PEmg Ratio PEmg < 20 25.28 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.86 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.41 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.73 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.88
MG Growth Estimate -4.25%
MG Value $1.03
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $12.83
MG Value based on 0% Growth $7.52
Market Implied Growth Rate 8.39%
Current Price $22.36
% of Intrinsic Value 2181.39%

World Fuel Services Corp does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding the low current ratio, and the lack of earnings stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.85 in 2014 to an estimated $0.88 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.39% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into World Fuel Services Corp revealed the company was trading below its Graham Number of $33.41. The company pays a dividend of $0.24 per share, for a yield of 1.1% Its PEmg (price over earnings per share – ModernGraham) was 25.28, which was below the industry average of 49.12, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $1.03.

World Fuel Services Corp receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $1.03
Graham Number $33.41
PEmg 25.28
Current Ratio 1.41
PB Ratio 0.86
Current Dividend $0.24
Dividend Yield 1.07%
Number of Consecutive Years of Dividend Growth 0

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Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $3,770,700,000
Total Current Liabilities $2,670,100,000
Long-Term Debt $800,800,000
Total Assets $5,472,100,000
Intangible Assets $1,366,100,000
Total Liabilities $3,701,100,000
Shares Outstanding (Diluted Average) 67,900,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.95
Dec2017 -$2.50
Dec2016 $1.81
Dec2015 $2.47
Dec2014 $3.15
Dec2013 $2.83
Dec2012 $2.64
Dec2011 $2.71
Dec2010 $2.31
Dec2009 $1.96
Dec2008 $1.80
Dec2007 $1.12
Dec2006 $1.11
Dec2005 $0.79
Dec2004 $0.61
Dec2003 $0.50
Mar2002 $0.40
Mar2001 $0.25
Mar2000 $0.20
Mar1999 $0.30
Mar1998 $0.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.88
Dec2017 $0.75
Dec2016 $2.45
Dec2015 $2.76
Dec2014 $2.85
Dec2013 $2.63
Dec2012 $2.45
Dec2011 $2.23
Dec2010 $1.88
Dec2009 $1.56
Dec2008 $1.26
Dec2007 $0.94
Dec2006 $0.79
Dec2005 $0.59
Dec2004 $0.46
Dec2003 $0.37
Mar2002 $0.30

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Other ModernGraham posts about the company

World Fuel Services Corp Valuation – Initial Coverage $INT

Other ModernGraham posts about related companies

Imperial Oil Ltd Valuation – July 2018 $IMO
CES Energy Solutions Corp – July 2018 $TSE-CEU
WPX Energy Inc Valuation – July 2018 $WPX
Magellan Midstream Partners LP Valuation – July 2018 $MMP
Ensco PLC Valuation – July 2018 $ESV
Enterprise Products Partners LP Valuation – July 2018 $EPD
Noble Corp PLC Valuation – June 2018 $NE
Rowan Companies PLC Valuation – June 2018 $RDC
Diamond Offshore Drilling Inc Valuation – June 2018 $DO
Transocean Ltd Valuation – June 2018 $RIG

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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