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TechnipFMC PLC Valuation – February 2019 $FTI

Company Profile (excerpt from Reuters): TechnipFMC plc is engaged in the business of oil and gas projects, technologies, systems and services. The Company offers a portfolio of solutions for production and transformation of oil and gas. The Company’s integrated offerings range from individual products and services to integrated solutions with a single interface to ensure execution. The Company provides services across three distinct segments: subsea, onshore/offshore, and surface projects. The Company’s Subsea products include trees, manifolds, controls, templates, flowline systems, umbilicals, flexibles and subsea processing. The Company’s Subsea projects include front end to decommissioning; field architecture, integrated design, and engineering, procurement, construction and installation. The Company’s Subsea services include drilling; installation, completion, and life of field; asset management; well intervention and inspection maintenance and repair (IMR), and remotely operated underwater vehicles (ROVs) and manipulator systems.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FTI – February 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 $10,238,581,459 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.33 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 -68.38% Fail
6. Moderate PEmg Ratio PEmg < 20 18.06 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.81 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 1.33 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.40 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 $1.25
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $18.16
MG Value based on 0% Growth $10.65
Market Implied Growth Rate 4.78%
Current Price $22.62
% of Intrinsic Value N/A

TechnipFMC PLC 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 growth over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the 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 $5.5 in 2014 to an estimated $1.25 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 4.78% 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 TechnipFMC PLC revealed the company was trading above its Graham Number of $21.74. The company pays a dividend of $0.13 per share, for a yield of 0.6% Its PEmg (price over earnings per share – ModernGraham) was 18.06, which was below the industry average of 43.92, 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 $-4.95.

TechnipFMC PLC 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) -$4.95
Graham Number $21.74
PEmg 18.06
Current Ratio 1.33
PB Ratio 0.81
Current Dividend $0.13
Dividend Yield 0.57%
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 9/1/2018
Total Current Assets $11,563,200,000
Total Current Liabilities $8,702,800,000
Long-Term Debt $4,017,100,000
Total Assets $26,660,000,000
Intangible Assets $10,226,500,000
Total Liabilities $13,835,700,000
Shares Outstanding (Diluted Average) 459,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.73
Dec2017 $0.24
Dec2016 $3.16
Dec2015 $0.13
Dec2014 $4.44
Dec2013 $6.46
Dec2012 $5.99
Dec2011 $5.72
Dec2010 $5.07
Dec2009 $2.28
Dec2008 $5.92
Dec2007 $1.75
Dec2006 $2.48
Dec2005 $1.13
Dec2004 $1.37
Dec2003 -$0.26
Dec2002 -$0.30
Dec2001 $6.03
Dec2000 $12.07
Dec1999 $10.82
Dec1998 $51.39

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.25
Dec2017 $1.97
Dec2016 $3.24
Dec2015 $3.70
Dec2014 $5.50
Dec2013 $5.72
Dec2012 $5.23
Dec2011 $4.62
Dec2010 $3.88
Dec2009 $3.09
Dec2008 $3.18
Dec2007 $1.64
Dec2006 $1.35
Dec2005 $1.05
Dec2004 $1.93
Dec2003 $3.37
Dec2002 $8.79

Recommended Reading:

Other ModernGraham posts about the company

TechnipFMC PLC Valuation – April 2018 $FTI
FMC Technologies Inc Valuation – August 2016 $FTI
FMC Technologies Inc Valuation – March 2016 $FTI
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
12 Best Stocks For Value Investors This Week – 11/14/15

Other ModernGraham posts about related companies

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ConocoPhillips Valuation – February 2019 $COP
Devon Energy Corp Valuation – January 2019 $DVN
Noble Energy Inc Valuation – January 2019 $NBL
ONEOK Inc Valuation – January 2019 $OKE
Marathon Oil Corp Valuation – January 2019 $MRO
HollyFrontier Corp Valuation – January 2019 $HFC
Hess Corp Valuation – January 2019 $HES

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.

FMC Corp Valuation – January 2019 $FMC

Company Profile (excerpt from Reuters): FMC Corporation, incorporated on August 10, 1928, is a diversified chemical company serving agricultural, consumer and industrial markets. The Company operates in three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. As of December 31, 2016, the FMC Agricultural Solutions segment developed, marketed and sold three classes of crop protection chemicals: insecticides, herbicides and fungicides. The FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients and functional health ingredients. The Company’s FMC Lithium segment manufactures lithium for use in a range of lithium products.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FMC – 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 $10,651,447,594 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.54 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 95.65% Pass
6. Moderate PEmg Ratio PEmg < 20 21.87 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.50 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 1.54 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.13 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 $3.62
MG Growth Estimate 8.01%
MG Value $88.66
Opinion Fairly Valued
MG Grade C
MG Value based on 3% Growth $52.44
MG Value based on 0% Growth $30.74
Market Implied Growth Rate 6.69%
Current Price $79.10
% of Intrinsic Value 89.22%

FMC Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.36 in 2014 to an estimated $3.62 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 6.69% 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 within a margin of safety relative to the price.

At the time of valuation, further research into FMC Corp revealed the company was trading above its Graham Number of $46.43. The company pays a dividend of $0.66 per share, for a yield of 0.8% Its PEmg (price over earnings per share – ModernGraham) was 21.87, which was above the industry average of 20.47. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-20.81.

FMC 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) -$20.81
Graham Number $46.43
PEmg 21.87
Current Ratio 1.54
PB Ratio 3.50
Current Dividend $0.66
Dividend Yield 0.83%
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 9/1/2018
Total Current Assets $3,491,200,000
Total Current Liabilities $2,271,500,000
Long-Term Debt $2,593,300,000
Total Assets $9,406,900,000
Intangible Assets $4,206,300,000
Total Liabilities $6,328,600,000
Shares Outstanding (Diluted Average) 136,357,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.80
Dec2017 $3.99
Dec2016 $1.56
Dec2015 $3.66
Dec2014 $2.29
Dec2013 $2.16
Dec2012 $3.00
Dec2011 $2.55
Dec2010 $1.18
Dec2009 $1.56
Dec2008 $2.01
Dec2007 $0.86
Dec2006 $0.42
Dec2005 $0.36
Dec2004 $0.54
Dec2003 $0.19
Dec2002 $0.48
Dec2001 -$2.72
Dec2000 $0.88
Dec1999 $0.82
Dec1998 $0.38

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.62
Dec2017 $2.93
Dec2016 $2.44
Dec2015 $2.83
Dec2014 $2.36
Dec2013 $2.29
Dec2012 $2.26
Dec2011 $1.80
Dec2010 $1.35
Dec2009 $1.31
Dec2008 $1.07
Dec2007 $0.55
Dec2006 $0.40
Dec2005 $0.18
Dec2004 $0.02
Dec2003 -$0.18
Dec2002 -$0.25

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Other ModernGraham posts about the company

5 Great Stocks This Week – 3/12/18
FMC Corp Valuation – March 2018 $FMC
9 Best Stocks For Value Investors This Week – 7/8/16
FMC Corporation Valuation – July 2016 $FMC
10 Most Undervalued Companies for the Defensive Investor – May 2016

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PPG Industries Inc Valuation – May 2018 $PPG
Innospec Inc Valuation – April 2018 $IOSP
Innophos Holdings Inc Valuation – March 2018 $IPHS
Olin Corp Valuation – March 2018 $OLN
A Schulman Inc Valuation – March 2018 $SHLM
FMC Corp Valuation – March 2018 $FMC

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.

TechnipFMC PLC Valuation – April 2018 $FTI

Company Profile (excerpt from Reuters): TechnipFMC plc is engaged in the business of oil and gas projects, technologies, systems and services. The Company offers a portfolio of solutions for production and transformation of oil and gas. The Company’s integrated offerings range from individual products and services to integrated solutions with a single interface to ensure execution. The Company provides services across three distinct segments: subsea, onshore/offshore, and surface projects. The Company’s Subsea products include trees, manifolds, controls, templates, flowline systems, umbilicals, flexibles and subsea processing. The Company’s Subsea projects include front end to decommissioning; field architecture, integrated design, and engineering, procurement, construction and installation. The Company’s Subsea services include drilling; installation, completion, and life of field; asset management; well intervention and inspection maintenance and repair (IMR), and remotely operated underwater vehicles (ROVs) and manipulator systems.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FTI – April 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 $14,073,802,000 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.32 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 -65.93% Fail
6. Moderate PEmg Ratio PEmg < 20 23.07 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.12 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 1.32 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.20 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 $1.36
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $19.71
MG Value based on 0% Growth $11.55
Market Implied Growth Rate 7.29%
Current Price $31.36
% of Intrinsic Value N/A

TechnipFMC plc Ordinary Share 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 growth over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the 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 $5.5 in 2014 to an estimated $1.36 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 7.29% 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 TechnipFMC plc Ordinary Share revealed the company was trading above its Graham Number of $26.06. The company pays a dividend of $0.13 per share, for a yield of 0.4% Its PEmg (price over earnings per share – ModernGraham) was 23.07, which was below the industry average of 85.36, 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 $-4.71.

TechnipFMC plc Ordinary Share 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) -$4.71
Graham Number $26.06
PEmg 23.07
Current Ratio 1.32
PB Ratio 1.12
Current Dividend $0.13
Dividend Yield 0.41%
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 12/1/2017
Total Current Assets $12,977,100,000
Total Current Liabilities $9,829,400,000
Long-Term Debt $3,777,900,000
Total Assets $28,263,700,000
Intangible Assets $10,263,600,000
Total Liabilities $15,183,000,000
Shares Outstanding (Diluted Average) 468,300,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.05
Dec2017 $0.24
Dec2016 $3.16
Dec2015 $0.13
Dec2014 $4.44
Dec2013 $6.46
Dec2012 $5.99
Dec2011 $5.72
Dec2010 $5.07
Dec2009 $2.28
Dec2008 $5.92
Dec2007 $1.75
Dec2006 $2.48
Dec2005 $1.13
Dec2004 $1.37
Dec2003 -$0.26
Dec2002 -$0.30
Dec2001 $6.03
Dec2000 $12.07
Dec1999 $10.82
Dec1998 $51.39

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.36
Dec2017 $1.97
Dec2016 $3.24
Dec2015 $3.70
Dec2014 $5.50
Dec2013 $5.72
Dec2012 $5.23
Dec2011 $4.62
Dec2010 $3.88
Dec2009 $3.09
Dec2008 $3.18
Dec2007 $1.64
Dec2006 $1.35
Dec2005 $1.05
Dec2004 $1.93
Dec2003 $3.37
Dec2002 $8.79

Recommended Reading:

Other ModernGraham posts about the company

FMC Technologies Inc Valuation – March 2016 $FTI
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
12 Best Stocks For Value Investors This Week – 11/14/15
FMC Technologies Inc. Valuation – November 2015 Update $FTI
The Best Companies of the Oil & Gas Industry – August 2015

Other ModernGraham posts about related companies

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Devon Energy Corp Valuation – March 2018 $DVN
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ONEOK Inc Valuation – March 2018 $OKE
Marathon Oil Corp Valuation – March 2018 $MRO
Hess Corp Valuation – March 2018 $HES
Cimarex Energy Co Valuation – Initial Coverage $XEC
EQT Corporation Valuation – March 2018 $EQT
Helmerich & Payne Inc Valuation – March 2018 $HP

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.

FMC Corp Valuation – March 2018 $FMC

Company Profile (obtained from Marketwatch): FMC Corp. engages in the provision of innovative solutions, applications, and products for the agricultural, industrial, and consumer markets. It operates through the following segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. The FMC Agricultural Solutions segment develops, markets, and sells all three major classes of crop protection chemicals: insecticides, herbicides and fungicides. The FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients, and functional health ingredients. The Lithium segment manufactures lithium for use in lithium products, which are used primarily in energy storage, specialty polymers, and chemical synthesis application. The company was founded by John Bean in 1883 and is headquartered in Philadelphia, PA.

FMC Chart

FMC data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FMC – March 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 $11,043,028,691 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.65 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 104.91% Pass
6. Moderate PEmg Ratio PEmg < 20 21.76 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.12 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 1.65 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.07 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 $3.78
MG Growth Estimate 9.05%
MG Value $100.52
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $54.81
MG Value based on 0% Growth $32.13
Market Implied Growth Rate 6.63%
Current Price $82.25
% of Intrinsic Value 81.83%

FMC Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.36 in 2014 to an estimated $3.78 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 6.63% 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 within a margin of safety relative to the price.

At the time of valuation, further research into FMC Corp revealed the company was trading above its Graham Number of $48.75. The company pays a dividend of $0.66 per share, for a yield of 0.8% Its PEmg (price over earnings per share – ModernGraham) was 21.76, which was below the industry average of 31.55, 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 $-21.36.

FMC 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) -$21.36
Graham Number $48.75
PEmg 21.76
Current Ratio 1.65
PB Ratio 4.12
Current Dividend $0.66
Dividend Yield 0.80%
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 12/1/2017
Total Current Assets $3,652,700,000
Total Current Liabilities $2,209,400,000
Long-Term Debt $2,993,000,000
Total Assets $9,206,300,000
Intangible Assets $3,830,700,000
Total Liabilities $6,524,500,000
Shares Outstanding (Diluted Average) 134,468,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.29
Dec2017 $3.99
Dec2016 $1.56
Dec2015 $3.66
Dec2014 $2.29
Dec2013 $2.16
Dec2012 $3.00
Dec2011 $2.55
Dec2010 $1.18
Dec2009 $1.56
Dec2008 $2.01
Dec2007 $0.86
Dec2006 $0.83
Dec2005 $0.73
Dec2004 $1.07
Dec2003 $0.19
Dec2002 $0.48
Dec2001 -$2.72
Dec2000 $0.88
Dec1999 $1.64
Dec1998 $0.76

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.78
Dec2017 $2.93
Dec2016 $2.44
Dec2015 $2.83
Dec2014 $2.36
Dec2013 $2.29
Dec2012 $2.26
Dec2011 $1.80
Dec2010 $1.38
Dec2009 $1.39
Dec2008 $1.23
Dec2007 $0.81
Dec2006 $0.74
Dec2005 $0.45
Dec2004 $0.20
Dec2003 -$0.13
Dec2002 -$0.12

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
10 Low PE Stocks for the Defensive Investor – February 2016
18 Best Stocks For Value Investors This Week – 1/30/16
FMC Corporation Valuation – January 2016 Update $FMC

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Praxair Inc Valuation – March 2018 $PX
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Green Plains Inc Valuation – March 2018 $GPRE
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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.

FMC Technologies Inc Valuation – August 2016 $FTI

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 FMC Technologies Inc (FTI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Technologies, Inc. is a global provider of technology solutions for the energy industry. The Company designs, manufactures and services a range of systems and products, including subsea production and processing systems, surface wellhead production systems, high pressure fluid control equipment, measurement solutions and marine loading systems. Its segments include Subsea Technologies, Surface Technologies and Energy Infrastructure. The Subsea Technologies segment designs and manufactures products and systems, and provides services used by oil and gas companies involved in deepwater exploration and production of crude oil and natural gas. The Surface Technologies segment designs and manufactures products and systems, and provides services used by oil and gas companies involved in land and offshore exploration, and production of crude oil and natural gas. The Energy Infrastructure segment’s products and services include Measurement Solutions, Loading Systems and Separation Systems.

FTI Chart

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ModernGraham Valuation of FTI – 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 $6,220,129,296 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.07 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
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 25.51% Fail
6. Moderate PEmg Ratio PEmg < 20 18.10 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.43 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 2.07 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.68 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

FTI value chart August 2016

EPSmg $1.55
MG Growth Estimate -0.67%
MG Value $11.08
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $22.46
MG Value based on 0% Growth $13.16
Market Implied Growth Rate 4.80%
Current Price $28.03
% of Intrinsic Value 252.95%

FMC Technologies, Inc. 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 poor dividend history. The Enterprising Investor has concerns regarding the lack of earnings 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 $1.62 in 2012 to an estimated $1.55 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 4.8% 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 FMC Technologies, Inc. revealed the company was trading above its Graham Number of $9.16. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 18.1, 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 $0.76.

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

Stage 3: Information for Further Research

FTI charts August 2016

Net Current Asset Value (NCAV) $0.76
Graham Number $9.16
PEmg 18.10
Current Ratio 2.07
PB Ratio 2.43
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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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 $3,705,200,000
Total Current Liabilities $1,787,700,000
Long-Term Debt $1,298,700,000
Total Assets $6,160,800,000
Intangible Assets $753,300,000
Total Liabilities $3,532,600,000
Shares Outstanding (Diluted Average) 228,300,000

Earnings Per Share History

Next Fiscal Year Estimate $0.32
Dec2015 $1.70
Dec2014 $2.95
Dec2013 $2.10
Dec2012 $1.78
Dec2011 $1.64
Dec2010 $1.53
Dec2009 $1.44
Dec2008 $1.39
Dec2007 $1.13
Dec2006 $0.99
Dec2005 $0.38
Dec2004 $0.42
Dec2003 $0.26
Dec2002 -$0.51
Dec2001 $0.13
Dec2000 $0.23

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.55
Dec2015 $2.12
Dec2014 $2.22
Dec2013 $1.80
Dec2012 $1.62
Dec2011 $1.50
Dec2010 $1.39
Dec2009 $1.23
Dec2008 $1.04
Dec2007 $0.79
Dec2006 $0.51
Dec2005 $0.23
Dec2004 $0.14
Dec2003 $0.01
Dec2002 -$0.09
Dec2001 $0.11
Dec2000 $0.08

Recommended Reading:

Other ModernGraham posts about the company

FMC Technologies Inc Valuation – March 2016 $FTI
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
12 Best Stocks For Value Investors This Week – 11/14/15
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
FMC Technologies Inc. Valuation – November 2015 Update $FTI

Other ModernGraham posts about related companies

Magellan Midstream Partners LP Valuation – August 2016 $MMP
Ensco PLC Valuation – August 2016 $ESV
Enterprise Products Partners LP Valuation – August 2016 $EPD
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

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.

FMC Corporation Valuation – July 2016 $FMC

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 Companies Benjamin Graham Would Invest In Today – June 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 FMC Corporation (FMC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Corporation is a diversified chemical company serving agricultural, consumer and industrial markets. The Company operates through three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. The Company’s FMC Agricultural Solutions segment develops, markets and sells over three classes of crop protection chemicals, including insecticides, herbicides and fungicides. Its FMC Health and Nutrition segment focuses on nutritional ingredients, health excipients and functional health ingredients. FMC Health and Nutrition is a supplier of microcrystalline cellulose, carrageenan, alginates, natural colorants, pectin and omega-3, which has applications in the production of food, pharmaceutical, nutraceutical and other specialty consumer products. Its FMC Lithium segment manufactures lithium for use in a range of lithium products, which are used in energy storage, specialty polymers and chemical synthesis application.

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of FMC – July 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 $5,732,069,592 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.04 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 92.09% Pass
6. Moderate PEmg Ratio PEmg < 20 15.93 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.03 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 2.04 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.32 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

FMC value chart July 2016

EPSmg $2.77
MG Growth Estimate 3.41%
MG Value $42.49
Opinion Fairly Valued
MG Grade B-
MG Value based on 3% Growth $40.19
MG Value based on 0% Growth $23.56
Market Implied Growth Rate 3.72%
Current Price $44.16
% of Intrinsic Value 103.93%

FMC Corp qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.26 in 2012 to an estimated $2.77 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 3.72% 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 within a margin of safety relative to the price.

FMC Corp performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

FMC charts July 2016

Net Current Asset Value (NCAV) -$10.98
Graham Number $29.00
PEmg 15.93
Current Ratio 2.04
PB Ratio 3.03
Current Dividend $0.66
Dividend Yield 1.49%
Number of Consecutive Years of Dividend Growth 6

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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 3/1/2016
Total Current Assets $2,955,200,000
Total Current Liabilities $1,451,300,000
Long-Term Debt $1,986,200,000
Total Assets $6,390,400,000
Intangible Assets $1,670,500,000
Total Liabilities $4,430,200,000
Shares Outstanding (Diluted Average) 134,304,000

Earnings Per Share History

Next Fiscal Year Estimate $2.55
Dec2015 $3.66
Dec2014 $2.29
Dec2013 $2.16
Dec2012 $3.00
Dec2011 $2.55
Dec2010 $1.18
Dec2009 $1.56
Dec2008 $2.01
Dec2007 $0.86
Dec2006 $0.84
Dec2005 $0.74
Dec2004 $1.07
Dec2003 $0.19
Dec2002 $0.48
Dec2001 -$2.72
Dec2000 $0.88
Dec1999 $1.64
Dec1998 $0.76
Dec1997 $1.10
Dec1996 -$0.05

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.77
Dec2015 $2.83
Dec2014 $2.36
Dec2013 $2.29
Dec2012 $2.26
Dec2011 $1.80
Dec2010 $1.38
Dec2009 $1.39
Dec2008 $1.24
Dec2007 $0.81
Dec2006 $0.75
Dec2005 $0.45
Dec2004 $0.20
Dec2003 -$0.13
Dec2002 -$0.12
Dec2001 -$0.17
Dec2000 $1.03

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
10 Low PE Stocks for the Defensive Investor – February 2016
18 Best Stocks For Value Investors This Week – 1/30/16
FMC Corporation Valuation – January 2016 Update $FMC

Other ModernGraham posts about related companies

Eastman Chemical Company Valuation – July 2016 $EMN
Dow Chemical Co Valuation – July 2016 $DOW
Olin Corporation Valuation – June 2016 $OLN
LyondellBasell Industries Valuation – June 2016 $LYB
Praxair Inc Valuation – June 2016 $PX
Albemarle Corp Valuation – February 2016 $ALB
Airgas Inc Stock Valuation – February 2016 $ARG
Air Products & Chemicals Inc Valuation – February 2016 $APD
FMC Corporation Valuation – January 2016 Update $FMC
Eastman Chemical Co Valuation – January 2016 $EMN

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.

FMC Technologies Inc Valuation – March 2016 $FTI

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 Companies Benjamin Graham Would Invest In Today – February 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 FMC Technologies Inc (FTI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Technologies, Inc. is a provider of technology solutions for the energy industry. The Company’s segments include Subsea Technologies, Surface Technologies and Energy Infrastructure. Subsea Technologies designs and manufactures products and systems and provides services used by oil and gas companies involved in deepwater exploration and production of crude oil and natural gas. Surface Technologies designs and manufactures systems and provides services used by oil and gas companies involved in land and offshore exploration and production of crude oil and gas; designs, manufactures and supplies high pressure valves and fittings for oilfield service companies, and also provides flowback and wireline services for exploration companies. Energy Infrastructure manufactures and supplies liquid and gas measurement and transportation equipment and systems for the production, transportation and processing of crude oil, natural gas and petroleum-based refined products and the mining industry.

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
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Downloadable PDF version of this valuation:

ModernGraham Valuation of FTI

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 $6,235,415,412 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.69 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 44.19% Pass
6. Moderate PEmg Ratio PEmg < 20 15.34 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.54 Pass
Score
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 0.71 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

FTI value chart March 2016

EPSmg $1.80
MG Growth Estimate 1.61%
MG Value $21.04
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $26.03
MG Value based on 0% Growth $15.26
Market Implied Growth Rate 3.42%
Current Price $27.54
% of Intrinsic Value 130.89%

FMC Technologies, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, and the poor dividend history. The Enterprising Investor is only concerned with the lack of dividends. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.62 in 2012 to an estimated $1.80 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 3.42% 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.

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

Stage 3: Information for Further Research

FTI charts March 2016

Net Current Asset Value (NCAV) $0.10
Graham Number $16.25
PEmg 15.34
Current Ratio 1.69
PB Ratio 2.54
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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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 Dec2015
Total Current Assets $3,948,700,000
Total Current Liabilities $2,343,300,000
Long-Term Debt $1,134,100,000
Total Assets $6,437,900,000
Intangible Assets $761,000,000
Total Liabilities $3,926,100,000
Shares Outstanding (Diluted Average) 231,700,000

Earnings Per Share History

Next Fiscal Year Estimate $1.06
Dec2015 $1.70
Dec2014 $2.95
Dec2013 $2.10
Dec2012 $1.78
Dec2011 $1.64
Dec2010 $1.53
Dec2009 $1.44
Dec2008 $1.39
Dec2007 $1.13
Dec2006 $0.99
Dec2005 $0.38
Dec2004 $0.42
Dec2003 $0.26
Dec2002 -$0.51
Dec2001 $0.13
Dec2000 $0.23

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.80
Dec2015 $2.12
Dec2014 $2.22
Dec2013 $1.80
Dec2012 $1.62
Dec2011 $1.50
Dec2010 $1.39
Dec2009 $1.23
Dec2008 $1.04
Dec2007 $0.79
Dec2006 $0.51
Dec2005 $0.23
Dec2004 $0.14
Dec2003 $0.01
Dec2002 -$0.09
Dec2001 $0.11
Dec2000 $0.08

Recommended Reading:

Other ModernGraham posts about the company

5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
FMC Technologies Inc. Valuation – November 2015 Update $FTI
The Best Companies of the Oil & Gas Industry – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15
FMC Technologies Inc. Analysis – August 2015 Update $FTI

Other ModernGraham posts about related companies

Valero Energy Corp Valuation – February 2016 $VLO
Schlumberger Ltd Valuation – February 2016 $SLB
National Oilwell Varco Inc Valuation – February 2016 Update $NOV
Southwestern Energy Company Valuation – February 2016 Update $SWN
Apache Corporation Valuation – January 2016 Update $APA
Anadarko Petroleum Corp Valuation – January 2016 Update $APC
Cabot Oil & Gas Corp Valuation – December 2015 Update $COG
Helmerich & Payne Inc Valuation – November 2015 Update $HP
Murphy Oil Corporation Valuation – November 2015 Update $MUR
Denbury Resources Inc. Valuation – November 2015 Update $DNR

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.

FMC Corporation Valuation – January 2016 Update $FMC

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 Most Undervalued Companies for the Defensive Investor – November 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 FMC Corporation (FMC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Corporation is a diversified chemical company. The Company serves agricultural, consumer and industrial markets with solutions, applications and products around the world. The Company operates in three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. The Company’s FMC Agricultural Solutions segment develops, markets and sells three classes of crop protection chemicals, which include insecticides, herbicides and fungicides. The FMC Health and Nutrition segment focuses on food, pharmaceutical ingredients, nutraceuticals, personal care and similar markets. The pharmaceutical additives are used for binding, encapsulation and disintegrant applications. The Company’s FMC Lithium segment manufactures lithium products.

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of FMC – January 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 $4,631,289,450 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.23 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 175.78% Pass
6. Moderate PEmg Ratio PEmg < 20 9.99 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.24 Pass
Score
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 2.23 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.15 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

FMC value Chart January 2016

EPSmg $3.53
MG Growth Estimate 14.36%
MG Value $131.21
Opinion Undervalued
MG Value based on 3% Growth $51.13
MG Value based on 0% Growth $29.97
Market Implied Growth Rate 0.74%
Current Price $35.21
% of Intrinsic Value 26.83%

FMC Corporation qualifies for both the Enterprising Investor and the more conservative Defensive Investor.  The Defensive Investor has no initial concerns, and the Enterprising Investor is only concerned by the level of debt relative to the net current assets.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.80 in 2011 to an estimated $3.53 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.74% 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 above 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 FMC Corporation (FMC)?  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.

Stage 3: Information for Further Research

FMC Charts January 2016

Net Current Asset Value (NCAV) -$8.15
Graham Number $45.20
PEmg 9.99
Current Ratio 2.23
PB Ratio 2.24
Dividend Yield 1.83%
Number of Consecutive Years of Dividend Growth 5

 

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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 Sep2015
Total Current Assets $3,238,100,000
Total Current Liabilities $1,455,000,000
Long-Term Debt $2,048,500,000
Total Assets $6,447,000,000
Intangible Assets $1,581,200,000
Total Liabilities $4,333,300,000
Shares Outstanding (Diluted Average) 134,375,000

Earnings Per Share History

Next Fiscal Year Estimate $5.74
Dec2014 $2.29
Dec2013 $2.16
Dec2012 $3.00
Dec2011 $2.55
Dec2010 $1.18
Dec2009 $1.56
Dec2008 $2.01
Dec2007 $0.86
Dec2006 $0.83
Dec2005 $0.73
Dec2004 $1.07
Dec2003 $0.19
Dec2002 $0.48
Dec2001 -$2.72
Dec2000 $0.88
Dec1999 $1.64
Dec1998 $0.76
Dec1997 $1.10
Dec1996 $1.39

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.53
Dec2014 $2.36
Dec2013 $2.29
Dec2012 $2.26
Dec2011 $1.80
Dec2010 $1.38
Dec2009 $1.39
Dec2008 $1.23
Dec2007 $0.81
Dec2006 $0.74
Dec2005 $0.45
Dec2004 $0.20
Dec2003 -$0.13
Dec2002 -$0.12
Dec2001 -$0.17
Dec2000 $1.12
Dec1999 $1.16

Recommended Reading:

Other ModernGraham posts about the company

10 Low PE Stocks for the Defensive Investor – January 2016
The Best Companies of the Chemicals Industry – August 2015
FMC Corporation Analysis – June 2015 Quarterly Update $FMC
23 Companies in the Spotlight This Week – 3/9/15
FMC Corporation Quarterly Valuation – March 2015 $FMC

Other ModernGraham posts about related companies

Eastman Chemical Co Valuation – January 2016 $EMN
Ashland Inc Valuation – January 2016 Update $ASH
LyondellBasell Industries Valuation – November 2015 Update $LYB
Albemarle Corporation Valuation – November 2015 Update $ALB
Dow Chemical Company Analysis – October 2015 Update $DOW
Sigma-Aldrich Corporation Analysis – September 2015 Update $SIAL
FMC Corporation Analysis – September 2015 Update $FMC
Eastman Chemical Company Analysis – September 2015 Update $EMN
Ashland Inc. Analysis – Initial Coverage $ASH
The Best Companies of the Chemicals Industry – August 2015

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.

FMC Technologies Inc. Valuation – November 2015 Update $FTI

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 Most Undervalued Companies for the Defensive Investor – October 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 FMC Technologies Inc. (FTI) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Technologies, Inc. is a provider of technology solutions for the energy industry. The Company’s segments include Subsea Technologies, Surface Technologies and Energy Infrastructure. Subsea Technologies designs and manufactures products and systems and provides services used by oil and gas companies involved in deepwater exploration and production of crude oil and natural gas. Surface Technologies designs and manufactures systems and provides services used by oil and gas companies involved in land and offshore exploration and production of crude oil and gas; designs, manufactures and supplies high pressure valves and fittings for oilfield service companies, and also provides flowback and wireline services for exploration companies. Energy Infrastructure manufactures and supplies liquid and gas measurement and transportation equipment and systems for the production, transportation and processing of crude oil, natural gas and petroleum-based refined products and the mining industry.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of FTI – November 2015

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 $7,865,562,513 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.77 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 96.29% Pass
6. Moderate PEmg Ratio PEmg < 20 15.54 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.10 Pass
Score
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 1.77 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.69 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

FTI value Chart November 2015

EPSmg $2.16
MG Growth Estimate 6.59%
MG Value $46.88
Opinion Undervalued
MG Value based on 3% Growth $31.37
MG Value based on 0% Growth $18.39
Market Implied Growth Rate 3.52%
Current Price $33.62
% of Intrinsic Value 71.71%

FMC Technologies Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio and lack of dividends.  The Enterprising Investor is only initially concerned by the lack of dividends.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.50 in 2011 to an estimated $2.16 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.52% 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 above 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 FMC Technologies Inc. (FTI)?  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.

Stage 3: Information for Further Research

FTI Charts November 2015

Net Current Asset Value (NCAV) -$0.04
Graham Number $21.26
PEmg 15.54
Current Ratio 1.77
PB Ratio 3.10
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

 

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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

Total Current Assets $4,195,600,000
Total Current Liabilities $2,371,400,000
Long-Term Debt $1,261,200,000
Total Assets $6,711,200,000
Intangible Assets $773,200,000
Total Liabilities $4,205,700,000
Shares Outstanding (Diluted Average) 231,000,000

Earnings Per Share History

Next Fiscal Year Estimate $1.83
Dec14 $2.95
Dec13 $2.10
Dec12 $1.78
Dec11 $1.64
Dec10 $1.53
Dec09 $1.44
Dec08 $1.39
Dec07 $1.13
Dec06 $0.99
Dec05 $0.38
Dec04 $0.42
Dec03 $0.26
Dec02 -$0.51
Dec01 $0.13
Dec00 $0.23

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.16
Dec14 $2.22
Dec13 $1.80
Dec12 $1.62
Dec11 $1.50
Dec10 $1.39
Dec09 $1.23
Dec08 $1.04
Dec07 $0.79
Dec06 $0.51
Dec05 $0.23
Dec04 $0.14
Dec03 $0.01
Dec02 -$0.09
Dec01 $0.11
Dec00 $0.08

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Oil & Gas Industry – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15
FMC Technologies Inc. Analysis – August 2015 Update $FTI
47 Companies in the Spotlight This Week – 5/16/15
FMC Technologies Inc. Quarterly Valuation – May 2015 $FTI

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Tesoro Corporation Analysis – October 2015 Update $TSO
Cameron International Company Analysis – September 2015 Update $CAM
Halliburton Company Analysis – September 2015 Update $HAL
Kinder Morgan Inc. Analysis – September 2015 Update $KMI
Range Resources Corporation Analysis – August 2015 Update $RRC

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.

FMC Corporation Analysis – September 2015 Update $FMC

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 Most Undervalued Companies for the Defensive Investor – August 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 FMC Corporation (FMC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): FMC Corporation is a diversified chemical company. The Company serves agricultural, consumer and industrial markets with solutions, applications and products around the world. The Company operates in three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. The Company’s FMC Agricultural Solutions segment develops, markets and sells three classes of crop protection chemicals, which include insecticides, herbicides and fungicides. The FMC Health and Nutrition segment focuses on food, pharmaceutical ingredients, nutraceuticals, personal care and similar markets. The pharmaceutical additives are used for binding, encapsulation and disintegrant applications. The Company’s FMC Lithium segment manufactures lithium products.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of FMC – September 2015

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 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 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 Pass
6. Moderate PEmg Ratio PEmg < 20 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Pass
Score
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 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 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 $3.85
MG Growth Estimate 15.00%
MG Value $148.33
Opinion Undervalued
MG Value based on 3% Growth $55.86
MG Value based on 0% Growth $32.75
Market Implied Growth Rate 1.14%
Current Price $41.54
% of Intrinsic Value 28.01%

FMC Corporation qualifies for both the Defensive Investor and the Enterprising Investor.  The Defensive Investor’s only initial concern is the low current ratio while the Enterprising Investor is only concerned with the level of debt relative to the net current assets.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.80 in 2011 to an estimated $3.85 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.14% 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 above 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 FMC Corporation (FMC)?  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.

Stage 3: Information for Further Research

FMC Charts September 2015

Net Current Asset Value (NCAV) -$8.18
Graham Number $49.40
PEmg 10.78
Current Ratio 1.92
PB Ratio 2.57
Dividend Yield 1.52%
Number of Consecutive Years of Dividend Growth 5

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

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

Most Recent Balance Sheet Figures

Total Current Assets $3,805,700,000
Total Current Liabilities $1,980,600,000
Long-Term Debt $2,050,900,000
Total Assets $7,075,200,000
Intangible Assets $1,572,300,000
Total Liabilities $4,905,400,000
Shares Outstanding (Diluted Average) 134,445,000

Earnings Per Share History

Next Fiscal Year Estimate $6.72
Dec14 $2.29
Dec13 $2.16
Dec12 $3.00
Dec11 $2.55
Dec10 $1.18
Dec09 $1.56
Dec08 $2.01
Dec07 $0.86
Dec06 $0.83
Dec05 $0.73
Dec04 $1.07
Dec03 $0.19
Dec02 $0.48
Dec01 -$2.72
Dec00 $0.88
Dec99 $1.64
Dec98 $0.76
Dec97 $1.10
Dec96 $1.39
Dec95 $1.43

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.85
Dec14 $2.36
Dec13 $2.29
Dec12 $2.26
Dec11 $1.80
Dec10 $1.38
Dec09 $1.39
Dec08 $1.23
Dec07 $0.81
Dec06 $0.74
Dec05 $0.45
Dec04 $0.20
Dec03 -$0.13
Dec02 -$0.12
Dec01 -$0.17
Dec00 $1.12
Dec99 $1.25

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Chemicals Industry – August 2015
FMC Corporation Analysis – June 2015 Quarterly Update $FMC
23 Companies in the Spotlight This Week – 3/9/15
FMC Corporation Quarterly Valuation – March 2015 $FMC
32 Companies in the Spotlight This Week – 12/6/14

Other ModernGraham posts about related companies

Ashland Inc. Analysis – Initial Coverage $ASH
The Best Companies of the Chemicals Industry – August 2015
LyondellBasell Industries Analysis – August 2015 Update $LYB
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E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD
Dow Chemical Analysis – July 2015 Update $DOW
Sigma-Aldrich Corporation Analysis – June 2015 Update $SIAL
Eastman Chemical Company Analysis – June 2015 Quarterly Update $EMN
FMC Corporation Analysis – June 2015 Quarterly Update $FMC
LyondellBassell Industries Quarterly Valuation – May 2015 $LYB

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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