IAMGOLD Corp Valuation – July 2018 $TSE:IMG

Company Profile (excerpt from Reuters): IAMGOLD Corporation (IAMGOLD) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Through its holdings, IAMGOLD has interests in various operations, exploration and development properties. IAMGOLD is a mid-tier mining company with approximately four operating gold mines on over three continents. The Company’s gold mine segment is divided into geographic segments, such as Burkina Faso – Essakane mine; Suriname-Rosebel mine; Canada-Doyon division, which includes the Westwood mine and the Doyon mine, and Joint ventures (Mali)-Sadiola mine (41%) and Yatela mine (40%). The Company’s non-gold segments are divided into Exploration and evaluation, and Corporate, which includes royalty interests located in Canada and investments in associates and joint ventures. In Canada, the Company owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-IMG – 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 $2,776,343,000 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.62 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 -45.99% Fail
6. Moderate PEmg Ratio PEmg < 20 101.08 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.95 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 4.62 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.42 Pass
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.07
MG Growth Estimate 15.00%
MG Value $2.86
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $1.08
MG Value based on 0% Growth $0.63
Market Implied Growth Rate 46.29%
Current Price $7.52
% of Intrinsic Value 262.53%

IAMGOLD 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 stability or growth over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $-0.32 in 2014 to an estimated $0.07 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 46.29% 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 IAMGOLD Corp revealed the company was trading above its Graham Number of $6.15. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 101.08, which was above the industry average of 46.07. Finally, the company was trading above its Net Current Asset Value (NCAV) of $0.18.

IAMGOLD 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) $0.18
Graham Number $6.15
PEmg 101.08
Current Ratio 4.62
PB Ratio 0.95
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 3/1/2018
Total Current Assets $1,557,294,000
Total Current Liabilities $336,912,000
Long-Term Debt $507,631,000
Total Assets $5,207,320,000
Intangible Assets $0
Total Liabilities $1,472,452,000
Shares Outstanding (Diluted Average) 470,900,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.22
Dec2017 $1.37
Dec2016 $0.16
Dec2015 -$2.65
Dec2014 -$0.63
Dec2013 -$2.35
Dec2012 $0.88
Dec2011 $2.19
Dec2010 $0.71
Dec2009 $0.34
Dec2008 -$0.04
Dec2007 -$0.14
Dec2006 $0.45
Dec2005 $0.16
Dec2004 $0.10
Dec2003 $0.18
Dec2002 $0.11
Dec2001 $0.24
Dec2000 -$0.32
Dec1999 -$0.41
Dec1998 -$0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.07
Dec2017 -$0.27
Dec2016 -$1.03
Dec2015 -$1.26
Dec2014 -$0.32
Dec2013 $0.01
Dec2012 $1.06
Dec2011 $0.97
Dec2010 $0.33
Dec2009 $0.15
Dec2008 $0.07
Dec2007 $0.13
Dec2006 $0.24
Dec2005 $0.15
Dec2004 $0.11
Dec2003 $0.07
Dec2002 -$0.04

Recommended Reading:

Other ModernGraham posts about the company

IAMGOLD Corp Valuation – Initial Coverage $IMG

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Newmont Mining Corp Valuation – March 2018 $NEM
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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.

SSR Mining Inc Valuation – August 2018 $TSE-SSRM

Company Profile (excerpt from Reuters): SSR Mining Inc., formerly Silver Standard Resources Inc., incorporated on December 11, 1946, is a resource company. The Company is engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. The Company’s segments include Pirquitas mine, Marigold mine, Seabee Gold Operation, and Exploration and evaluation properties. As of December 31, 2016, the Company has three producing mines and a portfolio of silver resource dominant projects located throughout the Americas. As of December 31, 2016, the Marigold mine produced 205,116 ounces of gold. As of December 31, 2016, the Seabee Gold Operation produced 77,640 ounces of gold. As of December 31, 2016, the Pirquitas mine produced 10.4 million ounces of silver.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SSRM – August 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 $1,583,074,000 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 8.67 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 -65.85% Fail
6. Moderate PEmg Ratio PEmg < 20 465.40 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.17 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 8.67 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.36 Pass
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.03
MG Growth Estimate 15.00%
MG Value $2.71
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $0.40
MG Value based on 0% Growth $0.23
Market Implied Growth Rate 228.45%
Current Price $12.69
% of Intrinsic Value 468.03%

SSR Mining 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 ratio. The Enterprising Investor has concerns regarding the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $-0.85 in 2014 to an estimated $0.03 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 228.45% 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 SSR Mining Inc revealed the company was trading above its Graham Number of $7.1. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 465.4, which was above the industry average of 53.66. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.71.

SSR Mining 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) $2.71
Graham Number $7.10
PEmg 465.40
Current Ratio 8.67
PB Ratio 1.17
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 $996,963,000
Total Current Liabilities $115,001,000
Long-Term Debt $315,309,000
Total Assets $1,975,308,000
Intangible Assets $65,345,000
Total Liabilities $671,817,000
Shares Outstanding (Diluted Average) 119,920,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.21
Dec2017 $0.73
Dec2016 $0.83
Dec2015 -$2.11
Dec2014 -$1.81
Dec2013 -$3.03
Dec2012 $0.68
Dec2011 $1.01
Dec2010 $4.36
Dec2009 -$0.20
Dec2008 -$0.11
Dec2007 -$0.58
Dec2006 $0.28
Dec2005 -$0.11
Dec2004 -$0.03
Dec2003 -$0.10
Dec2002 -$0.06
Dec2001 -$0.13
Dec2000 -$0.08
Dec1999 -$0.05
Dec1998 -$0.74

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.03
Dec2017 -$0.40
Dec2016 -$1.01
Dec2015 -$1.63
Dec2014 -$0.85
Dec2013 -$0.06
Dec2012 $1.33
Dec2011 $1.41
Dec2010 $1.32
Dec2009 -$0.18
Dec2008 -$0.15
Dec2007 -$0.15
Dec2006 $0.04
Dec2005 -$0.08
Dec2004 -$0.07
Dec2003 -$0.09
Dec2002 -$0.13

Recommended Reading:

Other ModernGraham posts about the company

Silver Standard Resources Inc Valuation – Initial Coverage $TSE:SSO

Other ModernGraham posts about related companies

Kirkland Lake Gold Ltd Valuation – August 2018 $TSE-KL
Natural Resource Partners LP Valuation – August 2018 $NRP
Kaiser Aluminum Corp Valuation – August 2018 $KALU
Semafo Inc Valuation – August 2018 $TSE-SMF
US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG

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.

Sandstorm Gold Ltd Valuation – August 2018 $TSE-SSL

Company Profile (excerpt from Reuters): Sandstorm Gold Ltd is a Canada-based gold royalty company. The Company provides upfront financing to gold mining companies that are looking for capital and in return receives the right to a percentage of the gold produced from a mine, for the life of the mine. The Company has acquired a portfolio of 188 royalties, of which approximately 21 of the underlying mines are producing. It is focused on investments towards production profile through the acquisition of additional gold royalties.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SSL – August 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 $993,891,135 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.46 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 2642.86% Pass
6. Moderate PEmg Ratio PEmg < 20 158.61 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.27 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 2.46 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.03
MG Growth Estimate 15.00%
MG Value $1.30
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $0.49
MG Value based on 0% Growth $0.29
Market Implied Growth Rate 75.06%
Current Price $5.34
% of Intrinsic Value 411.98%

Sandstorm Gold Ltd 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 over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $-0.12 in 2014 to an estimated $0.03 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 75.06% 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 Sandstorm Gold Ltd revealed the company was trading above its Graham Number of $2.86. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 158.61, which was above the industry average of 53.66. Finally, the company was trading above its Net Current Asset Value (NCAV) of $0.07.

Sandstorm Gold Ltd 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) $0.07
Graham Number $2.86
PEmg 158.61
Current Ratio 2.46
PB Ratio 1.27
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 $23,932,000
Total Current Liabilities $9,744,000
Long-Term Debt $0
Total Assets $818,257,000
Intangible Assets $0
Total Liabilities $10,610,000
Shares Outstanding (Diluted Average) 192,666,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.08
Dec2017 $0.08
Dec2016 $0.23
Dec2015 -$0.49
Dec2014 $0.10
Dec2013 -$0.83
Dec2012 $0.25
Dec2011 $0.16
Dec2010 -$0.05
Mar2009 -$0.10
Mar2008 -$0.05
Mar2007 -$0.03

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.03
Dec2017 -$0.05
Dec2016 -$0.13
Dec2015 -$0.26
Dec2014 -$0.12
Dec2013 -$0.19
Dec2012 $0.10
Dec2011 $0.01
Dec2010 -$0.06
Mar2009 -$0.05
Mar2008 -$0.02
Mar2007 -$0.01

Recommended Reading:

Other ModernGraham posts about the company

Sandstorm Gold Ltd Valuation – Initial Coverage $TSE:SSL

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Kirkland Lake Gold Ltd Valuation – August 2018 $TSE-KL
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Semafo Inc Valuation – August 2018 $TSE-SMF
US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG

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.

Kirkland Lake Gold Ltd Valuation – August 2018 $TSE-KL

Company Profile (excerpt from Reuters): Kirkland Lake Gold Ltd, formerly Newmarket Gold Inc, is a Canada-based mid tier gold mining, development and exploration company. It has a diversified portfolio of assets located in the stable mining jurisdictions of Canada and Australia. The Company’s main gold mines are: the Macassa Mine located in northeastern Ontario and the Fosterville Gold Mine located in the State of Victoria, Australia. In addition, the Company owns the Holt Mine and the Taylor Mine, which are situated along the Porcupine-Destor Fault Zone, in northeastern Ontario, the Cosmo Gold Mine located in the Northern Territory, Australia and the Stawell Gold Mine located in the State of Victoria, Australia. The Company’s subsidiaries are: Crocodile Gold Inc and Franc-Or Resources Peru SA, among others.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-KL – August 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 $5,090,684,000 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.74 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 -2731.68% Fail
6. Moderate PEmg Ratio PEmg < 20 36.14 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.88 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 2.74 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.80
MG Growth Estimate 15.00%
MG Value $30.73
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $11.57
MG Value based on 0% Growth $6.79
Market Implied Growth Rate 13.82%
Current Price $28.85
% of Intrinsic Value 93.87%

Kirkland Lake Gold Ltd is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the 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 is only concerned with the lack of earnings stability over the last five years. 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 $0.07 in 2014 to an estimated $0.8 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 13.82% 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 Kirkland Lake Gold Ltd revealed the company was trading above its Graham Number of $14.86. The company pays a dividend of $0.04 per share, for a yield of 0.1% Its PEmg (price over earnings per share – ModernGraham) was 36.14, which was below the industry average of 53.66, 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 $0.14.

Kirkland Lake Gold 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) $0.14
Graham Number $14.86
PEmg 36.14
Current Ratio 2.74
PB Ratio 3.88
Current Dividend $0.04
Dividend Yield 0.14%
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 6/1/2018
Total Current Assets $485,883,000
Total Current Liabilities $177,044,000
Long-Term Debt $0
Total Assets $2,038,858,000
Intangible Assets $0
Total Liabilities $456,244,000
Shares Outstanding (Diluted Average) 212,998,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.40
Dec2017 $0.80
Dec2016 $0.45
Apr2015 $0.28
Apr2014 -$0.16
Apr2013 -$0.05
Apr2012 $0.58
Apr2011 $0.29
Apr2010 -$0.20
Apr2009 -$0.20
Apr2008 -$0.06
Apr2007 -$0.16
Apr2006 -$0.13
Apr2005 -$0.67
Apr2004 -$0.74
Apr2003 -$0.25
Apr2002 -$0.16

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.80
Dec2017 $0.42
Dec2016 $0.23
Apr2015 $0.14
Apr2014 $0.07
Apr2013 $0.16
Apr2012 $0.20
Apr2011 -$0.01
Apr2010 -$0.16
Apr2009 -$0.18
Apr2008 -$0.23
Apr2007 -$0.34
Apr2006 -$0.42
Apr2005 -$0.49
Apr2004 -$0.35
Apr2003 -$0.13
Apr2002 -$0.05

Recommended Reading:

Other ModernGraham posts about the company

Kirkland Lakes Gold Ltd Valuation – Initial Coverage $TSE:KL

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Kaiser Aluminum Corp Valuation – August 2018 $KALU
Semafo Inc Valuation – August 2018 $TSE-SMF
US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG
Centerra Gold Inc Valuation – July 2018 $TSE:CG

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.

Natural Resource Partners LP Valuation – August 2018 $NRP

Company Profile (excerpt from Reuters): Natural Resource Partners L.P., incorporated on April 9, 2002, owns, operates, manages and leases a portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, construction aggregates and other natural resources. The Company’s segments include Coal Royalty and Other, Soda Ash and VantaCore. The Company’s operations are conducted through NRP (Operating) LLC (Opco), and its operating assets are owned by its subsidiaries. NRP (GP) LP, its general partner, has responsibility for conducting the Company’s business and for managing its operations.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of NRP – August 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 $385,145,764 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.84 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 -48.35% Fail
6. Moderate PEmg Ratio PEmg < 20 -25.31 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.94 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 0.84 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -41.77 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 -$1.25
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth -$18.08
MG Value based on 0% Growth -$10.60
Market Implied Growth Rate -16.90%
Current Price $31.55
% of Intrinsic Value N/A

Natural Resource Partners LP 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 and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the 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 $12.88 in 2014 to an estimated $-1.25 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 Natural Resource Partners LP revealed the company was trading below its Graham Number of $48.6. The company pays a dividend of $1.8 per share, for a yield of 5.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was -25.31, which was below the industry average of 53.66, 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 $-47.97.

Natural Resource Partners LP receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$47.97
Graham Number $48.60
PEmg -25.31
Current Ratio 0.84
PB Ratio 0.94
Current Dividend $1.80
Dividend Yield 5.71%
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 $89,047,000
Total Current Liabilities $106,399,000
Long-Term Debt $724,854,000
Total Assets $1,377,206,000
Intangible Assets $927,614,000
Total Liabilities $848,367,000
Shares Outstanding (Diluted Average) 15,829,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.84
Dec2017 $3.96
Dec2016 $7.78
Dec2015 -$45.75
Dec2014 $9.42
Dec2013 $15.39
Dec2012 $19.70
Dec2011 $5.00
Dec2010 $15.40
Dec2009 $11.70
Dec2008 $19.50
Dec2007 $12.60
Dec2006 $17.40
Dec2005 $16.95
Dec2004 $11.45
Dec2003 $7.95
Dec2002 $1.40

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$1.25
Dec2017 -$3.47
Dec2016 -$4.36
Dec2015 -$6.70
Dec2014 $12.88
Dec2013 $14.22
Dec2012 $13.84
Dec2011 $11.55
Dec2010 $14.99
Dec2009 $15.07
Dec2008 $16.36
Dec2007 $14.29
Dec2006 $13.76
Dec2005 $10.48
Dec2004 $6.22
Dec2003 $3.02
Dec2002 $0.47

Recommended Reading:

Other ModernGraham posts about the company

Natural Resource Partners LP Valuation – February 2017 $NRP
Natural Resource Partners LP Analysis – October 2015 Update $NRP
10 Companies in the Spotlight This Week – 12/28/13
ModernGraham Valuation: Natural Resource Partners L.P. (NRP)

Other ModernGraham posts about related companies

Kaiser Aluminum Corp Valuation – August 2018 $KALU
Semafo Inc Valuation – August 2018 $TSE-SMF
US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG
Centerra Gold Inc Valuation – July 2018 $TSE:CG
Alliance Resource Partners LP Valuation – July 2018 $ARLP

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.

Kaiser Aluminum Corp Valuation – August 2018 $KALU

Company Profile (excerpt from Reuters): Kaiser Aluminum Corporation, incorporated on February 20, 1987, manufactures and sells semi-fabricated specialty aluminum mill products. It operates in the Fabricated Products segment. Fabricated Products segment focuses on producing rolled, extruded and drawn aluminum products used principally for aerospace and defense, automotive and general engineering products that include consumer durables, electronics, electrical and machinery and equipment applications. The Company offers its products for various end market applications, such as aerospace and high strength (Aero/HS products); automotive (Automotive Extrusions); general engineering (GE products), and other industrial (Other products). Its fabricated aluminum mill products include flat-rolled (plate and sheet), extruded (rod, bar, hollows and shapes), drawn (rod, bar, pipe and tube) and cast aluminum products.

Downloadable PDF version of this valuation:

ModernGraham Valuation of KALU – August 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 $1,837,890,816 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.63 Pass
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 146.51% Pass
6. Moderate PEmg Ratio PEmg < 20 54.38 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.46 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 3.63 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.72 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 $2.04
MG Growth Estimate -4.25%
MG Value $2.48
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $29.56
MG Value based on 0% Growth $17.33
Market Implied Growth Rate 22.94%
Current Price $110.87
% of Intrinsic Value 4462.52%

Kaiser Aluminum 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, insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding 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 $3.84 in 2014 to an estimated $2.04 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 22.94% 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 Kaiser Aluminum Corp. revealed the company was trading above its Graham Number of $75.48. The company pays a dividend of $2 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 54.38, which was above the industry average of 53.66. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.48.

Kaiser Aluminum 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) $2.48
Graham Number $75.48
PEmg 54.38
Current Ratio 3.63
PB Ratio 2.46
Current Dividend $2.00
Dividend Yield 1.80%
Number of Consecutive Years of Dividend Growth 6

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 $704,800,000
Total Current Liabilities $194,100,000
Long-Term Debt $370,000,000
Total Assets $1,423,800,000
Intangible Assets $43,100,000
Total Liabilities $662,800,000
Shares Outstanding (Diluted Average) 16,905,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.69
Dec2017 $2.63
Dec2016 $5.09
Dec2015 -$13.76
Dec2014 $3.86
Dec2013 $5.44
Dec2012 $4.45
Dec2011 $1.32
Dec2010 $0.61
Dec2009 $3.51
Dec2008 -$3.45
Dec2007 $4.97
Dec2006 $64.49
Dec2005 -$9.46
Dec2004 -$9.36
Dec2003 -$9.83
Dec2002 -$5.82
Dec2001 -$5.73
Dec2000 $0.21
Dec1999 -$0.68
Dec1998 $0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.04
Dec2017 $0.36
Dec2016 -$0.18
Dec2015 -$1.79
Dec2014 $3.84
Dec2013 $3.58
Dec2012 $2.20
Dec2011 $1.18
Dec2010 $5.41
Dec2009 $9.21
Dec2008 $11.19
Dec2007 $15.06
Dec2006 $15.40
Dec2005 -$8.77
Dec2004 -$7.66
Dec2003 -$5.99
Dec2002 -$3.52

Recommended Reading:

Other ModernGraham posts about the company

Kaiser Aluminum Corp Valuation – Initial Coverage $KALU

Other ModernGraham posts about related companies

US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG
Centerra Gold Inc Valuation – July 2018 $TSE:CG
Alliance Resource Partners LP Valuation – July 2018 $ARLP
Century Aluminum Co Valuation – July 2018 $CENX
Goldcorp Inc Valuation – July 2018 $GG

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.

Semafo Inc Valuation – August 2018 $TSE-SMF

Company Profile (excerpt from Reuters): SEMAFO Inc. is a Canada-based mining company. The Company’s segments include Mana, Burkina Faso; Natougou, Burkina Faso, and Other exploration. The Company, through its subsidiaries, is engaged in gold mining activities, including exploration, development and operations. Its properties include Mana project, which is located in Burkina Faso that includes the satellite Siou and Fofina deposits; Natougou advanced gold deposit, which is located approximately 320 kilometers east of Ouagadougou, and consists of a drill database of over 170 diamond, 625 multi-purpose (reverse-circulation (RC) pre-collar and core tail) and 550 RC drill holes; Banfora project, which is located approximately 200 kilometers south west of Mana, and Nabanga project, which is located approximately 250 kilometers south-east of Ouagadougou. Its subsidiaries include SEMAFO Burkina Faso S.A., Mana Mineral S.A., SEMAFO (Barbados) Ltd, Orbis Gold PTY LTD and Birimian Resources S.A.R.L.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SMF – August 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 $1,213,739,215 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.67 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 -67.70% Fail
6. Moderate PEmg Ratio PEmg < 20 37.30 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.21 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 2.67 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.66 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

EPSmg $0.10
MG Growth Estimate 15.00%
MG Value $3.77
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $1.42
MG Value based on 0% Growth $0.83
Market Implied Growth Rate 14.40%
Current Price $3.65
% of Intrinsic Value 96.87%

Semafo Inc. is suitable for the Enterprising Investor but not 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 ratio. 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 Fairly Valued after growing its EPSmg (normalized earnings) from $-0.01 in 2014 to an estimated $0.1 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 14.4% 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 Semafo Inc. revealed the company was trading above its Graham Number of $2.41. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 37.3, which was below the industry average of 53.66, 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 $-0.04.

Semafo 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) -$0.04
Graham Number $2.41
PEmg 37.30
Current Ratio 2.67
PB Ratio 1.21
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 3/1/2018
Total Current Assets $315,268,000
Total Current Liabilities $118,091,000
Long-Term Debt $130,303,000
Total Assets $1,305,397,000
Intangible Assets $1,740,000
Total Liabilities $327,836,000
Shares Outstanding (Diluted Average) 325,062,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.09
Dec2017 $0.08
Dec2016 $0.15
Dec2015 $0.12
Dec2014 $0.02
Dec2013 -$0.33
Dec2012 -$0.05
Dec2011 $0.41
Dec2010 $0.37
Dec2009 $0.19
Dec2008 $0.23
Dec2007 -$0.12
Dec2006 -$0.13
Dec2005 -$0.16
Dec2004 -$0.06
Dec2003 -$0.14
Dec2002 -$0.02
Dec2001 $0.08
Dec2000 -$0.01
Dec1999 $1.18
Dec1998 $0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.10
Dec2017 $0.07
Dec2016 $0.04
Dec2015 $0.00
Dec2014 -$0.01
Dec2013 $0.02
Dec2012 $0.21
Dec2011 $0.30
Dec2010 $0.20
Dec2009 $0.07
Dec2008 -$0.01
Dec2007 -$0.12
Dec2006 -$0.12
Dec2005 -$0.10
Dec2004 -$0.05
Dec2003 $0.04
Dec2002 $0.17

Recommended Reading:

Other ModernGraham posts about the company

Semafo Inc Valuation – Initial Coverage $TSE:SMF

Other ModernGraham posts about related companies

US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN
Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG
Centerra Gold Inc Valuation – July 2018 $TSE:CG
Alliance Resource Partners LP Valuation – July 2018 $ARLP
Century Aluminum Co Valuation – July 2018 $CENX
Goldcorp Inc Valuation – July 2018 $GG

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.

US Silica Holdings Inc Valuation – August 2018 $SLCA

Company Profile (excerpt from Reuters): U.S. Silica Holdings, Inc., incorporated on November 14, 2008, is a domestic producer of commercial silica, a specialized mineral that is an input into a range of end markets. The Company operates in two segments: Oil & Gas Proppants, and Industrial & Specialty Products. In its end market, oil and gas proppants, its frac sand is used to stimulate and maintain the flow of hydrocarbons in oil and natural gas wells. Its silica is also used as an irreplaceable raw material in a range of industrial applications, including glassmaking and chemical manufacturing. The Company produces and sells a range of commercial silica products, including whole grain and ground products, as well as other industrial mineral products.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SLCA – August 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 $2,006,737,283 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.16 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 275.79% Pass
6. Moderate PEmg Ratio PEmg < 20 20.20 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.60 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 3.16 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.11 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 $1.33
MG Growth Estimate -1.82%
MG Value $6.48
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $19.35
MG Value based on 0% Growth $11.34
Market Implied Growth Rate 5.85%
Current Price $26.96
% of Intrinsic Value 416.18%

U.S. Silica 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 insufficient earnings stability 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 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 $1.52 in 2014 to an estimated $1.33 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.85% 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 U.S. Silica Holdings Inc revealed the company was trading below its Graham Number of $30.79. The company pays a dividend of $0.25 per share, for a yield of 0.9% Its PEmg (price over earnings per share – ModernGraham) was 20.2, which was below the industry average of 53.66, 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 $-3.53.

U.S. Silica Holdings 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) -$3.53
Graham Number $30.79
PEmg 20.20
Current Ratio 3.16
PB Ratio 1.60
Current Dividend $0.25
Dividend Yield 0.93%
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 $670,389,000
Total Current Liabilities $211,994,000
Long-Term Debt $506,607,000
Total Assets $2,307,038,000
Intangible Assets $423,581,000
Total Liabilities $954,055,000
Shares Outstanding (Diluted Average) 80,309,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.43
Dec2017 $1.77
Dec2016 -$0.63
Dec2015 $0.22
Dec2014 $2.24
Dec2013 $1.41
Dec2012 $1.50
Dec2011 $0.61
Dec2010 $0.23
Dec2009 $0.11

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.33
Dec2017 $0.86
Dec2016 $0.58
Dec2015 $1.19
Dec2014 $1.52
Dec2013 $1.03
Dec2012 $0.72
Dec2011 $0.29
Dec2010 $0.11
Dec2009 $0.04

Recommended Reading:

Other ModernGraham posts about the company

U.S. Silica Holdings Inc Valuation – Initial Coverage $SLCA

Other ModernGraham posts about related companies

Cleveland-Cliffs Inc Valuation – July 2018 $CLF
Cloud Peak Energy Inc Valuation – July 2018 $CLD
Wheaton Precious Metals Corp Valuation – July 2018 $TSE-WPM
IAMGOLD Corp Valuation – July 2018 $TSE:IMG
Centerra Gold Inc Valuation – July 2018 $TSE:CG
Alliance Resource Partners LP Valuation – July 2018 $ARLP
Century Aluminum Co Valuation – July 2018 $CENX
Goldcorp Inc Valuation – July 2018 $GG
Freeport-McMoRan Inc Valuation – May 2018 $FCX
Newmont Mining Corp Valuation – March 2018 $NEM

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.

Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN

Company Profile (excerpt from Reuters): Ivanhoe Mines Ltd. is a mineral exploration and development company. The Company focuses on exploration within the Central African Copperbelt and the Bushveld Complex. It has four segments: the Platreef property, the Kamoa property and joint venture, the Kipushi property and treasury. The segments are engaged in the exploration and development of mineral properties in South Africa, the Democratic Republic of Congo (DRC) and the restoration of a mine in the DRC, respectively. Its projects include Kamoa Copper Project, Platreef Project and Kipushi Project. The Kamoa Copper Project is a copper deposit with adjacent prospective exploration areas within the Central African Copperbelt. The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization in the Northern Limb of the Bushveld Igneous Complex. The Kipushi Mine is located on the Central African Copperbelt in the Democratic Republic of Congo’s southern Haut-Katanga province.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-IVN – August 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 $2,003,560,960 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 8.28 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 -134.26% Fail
6. Moderate PEmg Ratio PEmg < 20 13.36 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.30 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 8.28 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.22 Pass
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.19
MG Growth Estimate 15.00%
MG Value $7.47
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $2.81
MG Value based on 0% Growth $1.65
Market Implied Growth Rate 2.43%
Current Price $2.59
% of Intrinsic Value 34.69%

Ivanhoe Mines Ltd 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 stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the lack of earnings stability 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 Undervalued after growing its EPSmg (normalized earnings) from $-0.46 in 2014 to an estimated $0.19 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.43% 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 Ivanhoe Mines Ltd revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 13.36, which was below the industry average of 53.66, 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 $0.16.

Ivanhoe Mines 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) $0.16
Graham Number $0.00
PEmg 13.36
Current Ratio 8.28
PB Ratio 1.30
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 3/1/2018
Total Current Assets $198,793,000
Total Current Liabilities $24,003,000
Long-Term Debt $38,690,000
Total Assets $1,642,128,000
Intangible Assets $0
Total Liabilities $68,464,000
Shares Outstanding (Diluted Average) 791,001,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate -$0.03
Dec2017 $0.27
Dec2016 -$0.05
Dec2015 $1.28
Dec2014 -$0.40
Dec2013 -$0.73
Dec2012 -$0.38
Dec2011 -$0.33
Dec2010 -$0.13
Dec2009 -$0.08
Dec2008 -$0.57

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.19
Dec2017 $0.23
Dec2016 $0.12
Dec2015 $0.10
Dec2014 -$0.46
Dec2013 -$0.43
Dec2012 -$0.29
Dec2011 -$0.24
Dec2010 -$0.18
Dec2009 -$0.18
Dec2008 -$0.19

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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.

Cleveland-Cliffs Inc Valuation – July 2018 $CLF

Company Profile (excerpt from Reuters): Cleveland-Cliffs Inc, formerly Cliffs Natural Resources Inc., incorporated on February 22, 1985, is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. In addition, the Company operates an iron ore mining complex in Western Australia. In the United States, the Company owned four operational iron ore mines and one indefinitely idled mine, as of December 31, 2016.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CLF – 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 $3,185,660,788 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.26 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 -82.43% Fail
6. Moderate PEmg Ratio PEmg < 20 -3.75 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -10.49 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 3.26 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.14 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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg -$2.85
MG Growth Estimate 12.04%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$41.28
MG Value based on 0% Growth -$24.20
Market Implied Growth Rate -6.12%
Current Price $10.67
% of Intrinsic Value N/A

Cleveland-Cliffs 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 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 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 growing its EPSmg (normalized earnings) from $-14.44 in 2014 to an estimated $-2.85 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 Cleveland-Cliffs Inc revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was -3.75, which was below the industry average of 46.07, 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 $-6.01.

Cleveland-Cliffs 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) -$6.01
Graham Number $0.00
PEmg -3.75
Current Ratio 3.26
PB Ratio -10.49
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $1,546,900,000
Total Current Liabilities $474,900,000
Long-Term Debt $2,297,000,000
Total Assets $3,051,500,000
Intangible Assets $49,300,000
Total Liabilities $3,357,800,000
Shares Outstanding (Diluted Average) 301,275,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.49
Dec2017 $1.26
Dec2016 $0.87
Dec2015 -$5.14
Dec2014 -$47.52
Dec2013 $2.37
Dec2012 -$6.32
Dec2011 $11.48
Dec2010 $7.49
Dec2009 $1.63
Dec2008 $4.76
Dec2007 $2.57
Dec2006 $2.60
Dec2005 $2.50
Dec2004 $2.95
Dec2003 -$0.40
Dec2002 -$2.33
Dec2001 -$0.29
Dec2000 $0.22
Dec1999 $0.05
Dec1998 $0.63

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$2.85
Dec2017 -$6.55
Dec2016 -$10.69
Dec2015 -$13.99
Dec2014 -$14.44
Dec2013 $2.51
Dec2012 $2.99
Dec2011 $6.96
Dec2010 $4.40
Dec2009 $2.84
Dec2008 $3.32
Dec2007 $2.42
Dec2006 $1.91
Dec2005 $1.21
Dec2004 $0.39
Dec2003 -$0.78
Dec2002 -$0.76

Recommended Reading:

Other ModernGraham posts about the company

5 of the Worst Stocks to Invest In – January 2017
Cliffs Natural Resources Inc Valuation – January 2017 $CLF
Cliffs Natural Resources Inc. Analysis – August 2015 Update $CLF
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Cliffs Natural Resources Inc. Annual Valuation – 2014 $CLF

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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.

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