Intrinsic value of Parex Resources Inc. - PXT

Previous Close

$15.99

  Intrinsic Value

$1.41

stock screener

  Rating & Target

str. sell

-91%

Previous close

$15.99

 
Intrinsic value

$1.41

 
Up/down potential

-91%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of PXT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -14.72
  39.50
  36.05
  32.95
  30.15
  27.64
  25.37
  23.33
  21.50
  19.85
  18.37
  17.03
  15.83
  14.74
  13.77
  12.89
  12.10
  11.39
  10.75
  10.18
  9.66
  9.19
  8.77
  8.40
  8.06
  7.75
  7.48
  7.23
  7.01
  6.81
  6.62
Revenue, $m
  556
  776
  1,055
  1,403
  1,826
  2,330
  2,922
  3,603
  4,378
  5,247
  6,211
  7,269
  8,419
  9,661
  10,991
  12,408
  13,910
  15,494
  17,160
  18,907
  20,734
  22,640
  24,627
  26,695
  28,846
  31,082
  33,406
  35,820
  38,330
  40,939
  43,651
Variable operating expenses, $m
 
  546
  739
  980
  1,272
  1,621
  2,029
  2,501
  3,036
  3,637
  4,303
  5,024
  5,819
  6,677
  7,597
  8,576
  9,614
  10,710
  11,861
  13,068
  14,331
  15,649
  17,022
  18,451
  19,938
  21,483
  23,090
  24,759
  26,494
  28,297
  30,171
Fixed operating expenses, $m
 
  257
  264
  270
  277
  284
  291
  298
  306
  313
  321
  329
  338
  346
  355
  364
  373
  382
  391
  401
  411
  422
  432
  443
  454
  465
  477
  489
  501
  514
  526
Total operating expenses, $m
  639
  803
  1,003
  1,250
  1,549
  1,905
  2,320
  2,799
  3,342
  3,950
  4,624
  5,353
  6,157
  7,023
  7,952
  8,940
  9,987
  11,092
  12,252
  13,469
  14,742
  16,071
  17,454
  18,894
  20,392
  21,948
  23,567
  25,248
  26,995
  28,811
  30,697
Operating income, $m
  -84
  -28
  52
  153
  277
  426
  601
  805
  1,036
  1,297
  1,587
  1,915
  2,262
  2,637
  3,039
  3,468
  3,923
  4,403
  4,908
  5,437
  5,991
  6,570
  7,173
  7,801
  8,454
  9,133
  9,839
  10,573
  11,335
  12,128
  12,953
EBITDA, $m
  72
  174
  323
  510
  739
  1,013
  1,335
  1,707
  2,130
  2,606
  3,135
  3,715
  4,347
  5,029
  5,761
  6,540
  7,367
  8,239
  9,157
  10,119
  11,125
  12,175
  13,270
  14,410
  15,596
  16,828
  18,110
  19,442
  20,826
  22,265
  23,761
Interest expense (income), $m
  1
  0
  4
  9
  15
  22
  31
  41
  53
  67
  82
  99
  117
  137
  159
  182
  207
  233
  261
  290
  321
  352
  386
  420
  457
  494
  533
  574
  616
  660
  705
Earnings before tax, $m
  -96
  -28
  48
  144
  262
  404
  570
  763
  983
  1,230
  1,505
  1,817
  2,145
  2,500
  2,880
  3,286
  3,716
  4,170
  4,647
  5,147
  5,671
  6,217
  6,787
  7,380
  7,997
  8,639
  9,306
  9,999
  10,719
  11,469
  12,248
Tax expense, $m
  -33
  0
  13
  39
  71
  109
  154
  206
  265
  332
  406
  490
  579
  675
  778
  887
  1,003
  1,126
  1,255
  1,390
  1,531
  1,679
  1,832
  1,993
  2,159
  2,332
  2,513
  2,700
  2,894
  3,097
  3,307
Net income, $m
  -63
  -28
  35
  105
  191
  295
  416
  557
  718
  898
  1,099
  1,326
  1,566
  1,825
  2,103
  2,399
  2,712
  3,044
  3,392
  3,758
  4,140
  4,539
  4,954
  5,387
  5,838
  6,306
  6,793
  7,299
  7,825
  8,372
  8,941

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  202
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,241
  1,450
  1,972
  2,622
  3,413
  4,356
  5,461
  6,735
  8,184
  9,808
  11,610
  13,587
  15,737
  18,057
  20,544
  23,192
  25,999
  28,961
  32,076
  35,340
  38,754
  42,318
  46,031
  49,896
  53,917
  58,096
  62,440
  66,954
  71,645
  76,521
  81,590
Adjusted assets (=assets-cash), $m
  1,039
  1,450
  1,972
  2,622
  3,413
  4,356
  5,461
  6,735
  8,184
  9,808
  11,610
  13,587
  15,737
  18,057
  20,544
  23,192
  25,999
  28,961
  32,076
  35,340
  38,754
  42,318
  46,031
  49,896
  53,917
  58,096
  62,440
  66,954
  71,645
  76,521
  81,590
Revenue / Adjusted assets
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
Average production assets, $m
  744
  1,037
  1,411
  1,876
  2,441
  3,116
  3,906
  4,818
  5,854
  7,016
  8,304
  9,718
  11,257
  12,916
  14,695
  16,589
  18,597
  20,716
  22,944
  25,279
  27,721
  30,270
  32,926
  35,691
  38,566
  41,556
  44,663
  47,892
  51,247
  54,735
  58,361
Working capital, $m
  126
  -106
  -145
  -192
  -250
  -319
  -400
  -494
  -600
  -719
  -851
  -996
  -1,153
  -1,324
  -1,506
  -1,700
  -1,906
  -2,123
  -2,351
  -2,590
  -2,841
  -3,102
  -3,374
  -3,657
  -3,952
  -4,258
  -4,577
  -4,907
  -5,251
  -5,609
  -5,980
Total debt, $m
  0
  110
  250
  423
  634
  886
  1,181
  1,521
  1,908
  2,342
  2,823
  3,351
  3,925
  4,544
  5,208
  5,915
  6,665
  7,456
  8,287
  9,159
  10,070
  11,022
  12,013
  13,045
  14,119
  15,235
  16,395
  17,600
  18,852
  20,154
  21,508
Total liabilities, $m
  277
  387
  527
  700
  911
  1,163
  1,458
  1,798
  2,185
  2,619
  3,100
  3,628
  4,202
  4,821
  5,485
  6,192
  6,942
  7,733
  8,564
  9,436
  10,347
  11,299
  12,290
  13,322
  14,396
  15,512
  16,672
  17,877
  19,129
  20,431
  21,785
Total equity, $m
  964
  1,063
  1,446
  1,922
  2,502
  3,193
  4,003
  4,937
  5,999
  7,189
  8,510
  9,959
  11,535
  13,236
  15,058
  17,000
  19,057
  21,229
  23,511
  25,904
  28,407
  31,019
  33,741
  36,574
  39,521
  42,585
  45,769
  49,077
  52,516
  56,090
  59,806
Total liabilities and equity, $m
  1,241
  1,450
  1,973
  2,622
  3,413
  4,356
  5,461
  6,735
  8,184
  9,808
  11,610
  13,587
  15,737
  18,057
  20,543
  23,192
  25,999
  28,962
  32,075
  35,340
  38,754
  42,318
  46,031
  49,896
  53,917
  58,097
  62,441
  66,954
  71,645
  76,521
  81,591
Debt-to-equity ratio
  0.000
  0.100
  0.170
  0.220
  0.250
  0.280
  0.300
  0.310
  0.320
  0.330
  0.330
  0.340
  0.340
  0.340
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
Adjusted equity ratio
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733
  0.733

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -63
  -28
  35
  105
  191
  295
  416
  557
  718
  898
  1,099
  1,326
  1,566
  1,825
  2,103
  2,399
  2,712
  3,044
  3,392
  3,758
  4,140
  4,539
  4,954
  5,387
  5,838
  6,306
  6,793
  7,299
  7,825
  8,372
  8,941
Depreciation, amort., depletion, $m
  156
  202
  271
  357
  462
  587
  733
  902
  1,094
  1,309
  1,548
  1,800
  2,085
  2,392
  2,721
  3,072
  3,444
  3,836
  4,249
  4,681
  5,133
  5,605
  6,097
  6,609
  7,142
  7,696
  8,271
  8,869
  9,490
  10,136
  10,808
Funds from operations, $m
  221
  174
  307
  463
  653
  882
  1,150
  1,459
  1,812
  2,207
  2,646
  3,126
  3,650
  4,217
  4,824
  5,471
  6,156
  6,880
  7,641
  8,439
  9,273
  10,144
  11,052
  11,997
  12,980
  14,002
  15,064
  16,168
  17,315
  18,508
  19,748
Change in working capital, $m
  13
  -30
  -38
  -48
  -58
  -69
  -81
  -93
  -106
  -119
  -132
  -145
  -158
  -170
  -182
  -194
  -206
  -217
  -228
  -239
  -250
  -261
  -272
  -283
  -295
  -306
  -318
  -331
  -344
  -357
  -372
Cash from operations, $m
  208
  204
  345
  510
  711
  951
  1,231
  1,553
  1,918
  2,326
  2,778
  3,271
  3,808
  4,387
  5,006
  5,665
  6,362
  7,097
  7,869
  8,678
  9,523
  10,405
  11,324
  12,280
  13,275
  14,308
  15,382
  16,499
  17,659
  18,866
  20,120
Maintenance CAPEX, $m
  0
  -138
  -192
  -261
  -347
  -452
  -577
  -723
  -892
  -1,084
  -1,299
  -1,538
  -1,800
  -2,085
  -2,392
  -2,721
  -3,072
  -3,444
  -3,836
  -4,249
  -4,681
  -5,133
  -5,605
  -6,097
  -6,609
  -7,142
  -7,696
  -8,271
  -8,869
  -9,490
  -10,136
New CAPEX, $m
  -151
  -294
  -374
  -465
  -566
  -675
  -791
  -912
  -1,036
  -1,162
  -1,289
  -1,414
  -1,538
  -1,660
  -1,778
  -1,895
  -2,008
  -2,119
  -2,228
  -2,335
  -2,442
  -2,549
  -2,656
  -2,765
  -2,876
  -2,990
  -3,107
  -3,229
  -3,355
  -3,488
  -3,626
Cash from investing activities, $m
  -143
  -432
  -566
  -726
  -913
  -1,127
  -1,368
  -1,635
  -1,928
  -2,246
  -2,588
  -2,952
  -3,338
  -3,745
  -4,170
  -4,616
  -5,080
  -5,563
  -6,064
  -6,584
  -7,123
  -7,682
  -8,261
  -8,862
  -9,485
  -10,132
  -10,803
  -11,500
  -12,224
  -12,978
  -13,762
Free cash flow, $m
  65
  -227
  -221
  -216
  -202
  -176
  -137
  -82
  -10
  80
  191
  319
  470
  643
  836
  1,049
  1,282
  1,534
  1,805
  2,094
  2,400
  2,723
  3,062
  3,418
  3,789
  4,177
  4,580
  4,999
  5,435
  5,888
  6,358
Issuance/(repayment) of debt, $m
  0
  110
  140
  173
  211
  252
  295
  340
  387
  434
  481
  528
  574
  620
  664
  707
  749
  791
  832
  872
  912
  951
  991
  1,032
  1,073
  1,116
  1,160
  1,205
  1,252
  1,302
  1,354
Issuance/(repurchase) of shares, $m
  7
  328
  348
  371
  388
  397
  394
  377
  344
  293
  222
  123
  10
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  7
  438
  488
  544
  599
  649
  689
  717
  731
  727
  703
  651
  584
  620
  664
  707
  749
  791
  832
  872
  912
  951
  991
  1,032
  1,073
  1,116
  1,160
  1,205
  1,252
  1,302
  1,354
Total cash flow (excl. dividends), $m
  74
  212
  266
  329
  398
  472
  552
  635
  720
  807
  893
  970
  1,055
  1,262
  1,500
  1,756
  2,032
  2,325
  2,637
  2,966
  3,312
  3,674
  4,054
  4,450
  4,863
  5,293
  5,740
  6,204
  6,687
  7,190
  7,711
Retained Cash Flow (-), $m
  38
  -328
  -383
  -476
  -580
  -691
  -810
  -934
  -1,062
  -1,191
  -1,320
  -1,449
  -1,576
  -1,701
  -1,823
  -1,941
  -2,058
  -2,171
  -2,283
  -2,393
  -2,502
  -2,612
  -2,722
  -2,833
  -2,947
  -3,064
  -3,184
  -3,309
  -3,438
  -3,574
  -3,716
Prev. year cash balance distribution, $m
 
  202
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  85
  -117
  -148
  -182
  -219
  -258
  -299
  -341
  -384
  -427
  -480
  -522
  -439
  -323
  -185
  -26
  154
  354
  573
  809
  1,063
  1,332
  1,617
  1,916
  2,229
  2,556
  2,896
  3,249
  3,616
  3,995
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  82
  -107
  -129
  -150
  -170
  -187
  -202
  -213
  -221
  -224
  -228
  -223
  -167
  -108
  -54
  -7
  34
  65
  88
  103
  110
  111
  106
  98
  87
  75
  62
  50
  39
  30
Current shareholders' claim on cash, %
  100
  85.5
  75.8
  68.9
  63.8
  60.1
  57.3
  55.3
  53.8
  52.8
  52.2
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9
  51.9

Parex Resources, Inc. is a Canada-based oil and gas company. The Company is engaged in crude oil exploration, development and production in Colombia. The Company's segments include Canada and Colombia. The Company, through its foreign subsidiaries, holds interests in onshore exploration and production blocks totaling approximately 1,870,120 gross acres. The Company's annual oil production is approximately 27,430 barrels per day. The Company's principal land holdings and interests in exploration and production blocks held by its subsidiaries include LLA-16, 20, 29 and 30; LLA-57; Los Ocarros; El Eden; Cabrestero; LLA-40; LLA-24; LLA-26; Cebucan; LLA-32; LLA-10, which are located in Colombia Llanos Basin; VMM-11; Morpho; VIM-1, and VMM-9, which are located in Colombia Magdalena Basin. Its subsidiaries include Parex Resources Colombia, Ltd., Ramshorn International Limited and Parex Resources (Trinidad), Ltd., which are engaged in oil and natural gas exploration and development.

FINANCIAL RATIOS  of  Parex Resources Inc. (PXT)

Valuation Ratios
P/E Ratio -38.8
Price to Sales 4.4
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 11.8
Price to Free Cash Flow 42.9
Growth Rates
Sales Growth Rate -14.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -11.2%
Cap. Spend. - 3 Yr. Gr. Rate -13.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage -95
Management Effectiveness
Return On Assets -4.9%
Ret/ On Assets - 3 Yr. Avg. -6.7%
Return On Total Capital -6.4%
Ret/ On T. Cap. - 3 Yr. Avg. -10%
Return On Equity -6.4%
Return On Equity - 3 Yr. Avg. -10.6%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 52.7%
Gross Margin - 3 Yr. Avg. 49%
EBITDA Margin 11%
EBITDA Margin - 3 Yr. Avg. 19.3%
Operating Margin -14.9%
Oper. Margin - 3 Yr. Avg. -8.6%
Pre-Tax Margin -17.3%
Pre-Tax Margin - 3 Yr. Avg. -11.9%
Net Profit Margin -11.3%
Net Profit Margin - 3 Yr. Avg. -12.3%
Effective Tax Rate 34.4%
Eff/ Tax Rate - 3 Yr. Avg. -4.7%
Payout Ratio 0%

PXT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PXT stock intrinsic value calculation we used $556 million for the last fiscal year's total revenue generated by Parex Resources Inc.. The default revenue input number comes from 2016 income statement of Parex Resources Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PXT stock valuation model: a) initial revenue growth rate of 39.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PXT is calculated based on our internal credit rating of Parex Resources Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Parex Resources Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PXT stock the variable cost ratio is equal to 70.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $251 million in the base year in the intrinsic value calculation for PXT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Parex Resources Inc..

Corporate tax rate of 27% is the nominal tax rate for Parex Resources Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PXT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PXT are equal to 133.7%.

Life of production assets of 5.4 years is the average useful life of capital assets used in Parex Resources Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PXT is equal to -13.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $964 million for Parex Resources Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 153.757 million for Parex Resources Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Parex Resources Inc. at the current share price and the inputted number of shares is $2.5 billion.

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Financial statements of PXT
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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