Intrinsic value of Secure Energy Services Inc. - SES

Previous Close

$7.17

  Intrinsic Value

$1.37

stock screener

  Rating & Target

str. sell

-81%

Previous close

$7.17

 
Intrinsic value

$1.37

 
Up/down potential

-81%

 
Rating

str. sell

We calculate the intrinsic value of SES 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 1.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  52.70
  47.93
  43.64
  39.77
  36.30
  33.17
  30.35
  27.81
  25.53
  23.48
  21.63
  19.97
  18.47
  17.12
  15.91
  14.82
  13.84
  12.96
  12.16
  11.44
  10.80
  10.22
  9.70
  9.23
  8.80
  8.42
  8.08
  7.77
  7.50
  7.25
Revenue, $m
  2,153
  3,185
  4,575
  6,394
  8,715
  11,606
  15,128
  19,336
  24,274
  29,973
  36,457
  43,737
  51,816
  60,689
  70,346
  80,772
  91,950
  103,862
  116,491
  129,822
  143,841
  158,541
  173,915
  189,963
  206,689
  224,102
  242,213
  261,042
  280,611
  300,946
Variable operating expenses, $m
  2,438
  3,605
  5,176
  7,234
  9,859
  13,127
  17,110
  21,869
  27,452
  33,897
  41,225
  49,457
  58,593
  68,627
  79,547
  91,337
  103,977
  117,447
  131,728
  146,802
  162,656
  179,278
  196,663
  214,811
  233,725
  253,414
  273,895
  295,187
  317,315
  340,310
Fixed operating expenses, $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
Total operating expenses, $m
  2,438
  3,605
  5,176
  7,234
  9,859
  13,127
  17,110
  21,869
  27,452
  33,897
  41,225
  49,457
  58,593
  68,627
  79,547
  91,337
  103,977
  117,447
  131,728
  146,802
  162,656
  179,278
  196,663
  214,811
  233,725
  253,414
  273,895
  295,187
  317,315
  340,310
Operating income, $m
  -285
  -420
  -602
  -840
  -1,143
  -1,521
  -1,982
  -2,532
  -3,178
  -3,924
  -4,769
  -5,721
  -6,778
  -7,938
  -9,201
  -10,565
  -12,027
  -13,585
  -15,237
  -16,981
  -18,815
  -20,737
  -22,748
  -24,847
  -27,035
  -29,313
  -31,682
  -34,145
  -36,704
  -39,364
EBITDA, $m
  -112
  -165
  -238
  -332
  -453
  -603
  -786
  -1,004
  -1,261
  -1,557
  -1,893
  -2,271
  -2,691
  -3,152
  -3,653
  -4,195
  -4,775
  -5,394
  -6,050
  -6,742
  -7,470
  -8,234
  -9,032
  -9,866
  -10,734
  -11,639
  -12,579
  -13,557
  -14,574
  -15,630
Interest expense (income), $m
  8
  7
  17
  29
  46
  69
  97
  133
  176
  228
  288
  358
  438
  527
  626
  735
  854
  982
  1,119
  1,265
  1,420
  1,584
  1,756
  1,937
  2,126
  2,323
  2,528
  2,742
  2,964
  3,195
  3,436
Earnings before tax, $m
  -292
  -436
  -631
  -886
  -1,212
  -1,618
  -2,115
  -2,708
  -3,406
  -4,212
  -5,127
  -6,159
  -7,305
  -8,565
  -9,937
  -11,419
  -13,009
  -14,704
  -16,503
  -18,401
  -20,399
  -22,494
  -24,685
  -26,973
  -29,358
  -31,841
  -34,424
  -37,109
  -39,900
  -42,800
Tax expense, $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
Net income, $m
  -292
  -436
  -631
  -886
  -1,212
  -1,618
  -2,115
  -2,708
  -3,406
  -4,212
  -5,127
  -6,159
  -7,305
  -8,565
  -9,937
  -11,419
  -13,009
  -14,704
  -16,503
  -18,401
  -20,399
  -22,494
  -24,685
  -26,973
  -29,358
  -31,841
  -34,424
  -37,109
  -39,900
  -42,800

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  2,170
  3,211
  4,612
  6,446
  8,786
  11,700
  15,250
  19,492
  24,469
  30,215
  36,751
  44,089
  52,233
  61,178
  70,913
  81,423
  92,691
  104,699
  117,430
  130,868
  145,001
  159,819
  175,318
  191,495
  208,356
  225,909
  244,167
  263,147
  282,874
  303,373
Adjusted assets (=assets-cash), $m
  2,170
  3,211
  4,612
  6,446
  8,786
  11,700
  15,250
  19,492
  24,469
  30,215
  36,751
  44,089
  52,233
  61,178
  70,913
  81,423
  92,691
  104,699
  117,430
  130,868
  145,001
  159,819
  175,318
  191,495
  208,356
  225,909
  244,167
  263,147
  282,874
  303,373
Revenue / Adjusted assets
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
  0.992
Average production assets, $m
  1,647
  2,437
  3,500
  4,892
  6,667
  8,879
  11,573
  14,792
  18,569
  22,929
  27,889
  33,458
  39,639
  46,427
  53,815
  61,790
  70,341
  79,454
  89,115
  99,313
  110,039
  121,284
  133,045
  145,322
  158,117
  171,438
  185,293
  199,697
  214,667
  230,224
Working capital, $m
  217
  322
  462
  646
  880
  1,172
  1,528
  1,953
  2,452
  3,027
  3,682
  4,417
  5,233
  6,130
  7,105
  8,158
  9,287
  10,490
  11,766
  13,112
  14,528
  16,013
  17,565
  19,186
  20,876
  22,634
  24,464
  26,365
  28,342
  30,396
Total debt, $m
  474
  836
  1,324
  1,962
  2,776
  3,790
  5,026
  6,502
  8,234
  10,234
  12,508
  15,062
  17,896
  21,009
  24,397
  28,054
  31,976
  36,154
  40,585
  45,261
  50,179
  55,336
  60,730
  66,359
  72,227
  78,335
  84,689
  91,294
  98,159
  105,293
Total liabilities, $m
  755
  1,117
  1,605
  2,243
  3,057
  4,071
  5,307
  6,783
  8,515
  10,515
  12,789
  15,343
  18,177
  21,290
  24,678
  28,335
  32,257
  36,435
  40,866
  45,542
  50,460
  55,617
  61,011
  66,640
  72,508
  78,616
  84,970
  91,575
  98,440
  105,574
Total equity, $m
  1,415
  2,093
  3,007
  4,203
  5,728
  7,628
  9,943
  12,709
  15,954
  19,700
  23,961
  28,746
  34,056
  39,888
  46,235
  53,088
  60,435
  68,264
  76,565
  85,326
  94,541
  104,202
  114,307
  124,855
  135,848
  147,293
  159,197
  171,572
  184,434
  197,799
Total liabilities and equity, $m
  2,170
  3,210
  4,612
  6,446
  8,785
  11,699
  15,250
  19,492
  24,469
  30,215
  36,750
  44,089
  52,233
  61,178
  70,913
  81,423
  92,692
  104,699
  117,431
  130,868
  145,001
  159,819
  175,318
  191,495
  208,356
  225,909
  244,167
  263,147
  282,874
  303,373
Debt-to-equity ratio
  0.340
  0.400
  0.440
  0.470
  0.480
  0.500
  0.510
  0.510
  0.520
  0.520
  0.520
  0.520
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
  0.530
Adjusted equity ratio
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -292
  -436
  -631
  -886
  -1,212
  -1,618
  -2,115
  -2,708
  -3,406
  -4,212
  -5,127
  -6,159
  -7,305
  -8,565
  -9,937
  -11,419
  -13,009
  -14,704
  -16,503
  -18,401
  -20,399
  -22,494
  -24,685
  -26,973
  -29,358
  -31,841
  -34,424
  -37,109
  -39,900
  -42,800
Depreciation, amort., depletion, $m
  173
  254
  364
  507
  690
  918
  1,196
  1,528
  1,917
  2,367
  2,875
  3,449
  4,086
  4,786
  5,548
  6,370
  7,252
  8,191
  9,187
  10,239
  11,344
  12,503
  13,716
  14,982
  16,301
  17,674
  19,102
  20,587
  22,131
  23,734
Funds from operations, $m
  -119
  -182
  -267
  -378
  -521
  -700
  -918
  -1,180
  -1,488
  -1,845
  -2,252
  -2,709
  -3,218
  -3,778
  -4,389
  -5,049
  -5,757
  -6,513
  -7,315
  -8,163
  -9,055
  -9,990
  -10,969
  -11,991
  -13,057
  -14,167
  -15,321
  -16,521
  -17,769
  -19,065
Change in working capital, $m
  75
  104
  140
  184
  234
  292
  356
  425
  499
  576
  655
  735
  816
  896
  975
  1,053
  1,129
  1,203
  1,276
  1,346
  1,416
  1,485
  1,553
  1,621
  1,689
  1,759
  1,829
  1,902
  1,976
  2,054
Cash from operations, $m
  -194
  -286
  -407
  -562
  -756
  -992
  -1,274
  -1,605
  -1,987
  -2,420
  -2,906
  -3,445
  -4,034
  -4,674
  -5,364
  -6,102
  -6,886
  -7,716
  -8,591
  -9,509
  -10,471
  -11,475
  -12,522
  -13,612
  -14,746
  -15,925
  -17,150
  -18,423
  -19,745
  -21,119
Maintenance CAPEX, $m
  -111
  -170
  -251
  -361
  -504
  -687
  -915
  -1,193
  -1,525
  -1,914
  -2,364
  -2,875
  -3,449
  -4,086
  -4,786
  -5,548
  -6,370
  -7,252
  -8,191
  -9,187
  -10,239
  -11,344
  -12,503
  -13,716
  -14,982
  -16,301
  -17,674
  -19,102
  -20,587
  -22,131
New CAPEX, $m
  -569
  -789
  -1,063
  -1,392
  -1,776
  -2,211
  -2,695
  -3,219
  -3,777
  -4,360
  -4,960
  -5,569
  -6,180
  -6,788
  -7,388
  -7,976
  -8,551
  -9,113
  -9,661
  -10,198
  -10,725
  -11,245
  -11,761
  -12,277
  -12,795
  -13,320
  -13,855
  -14,404
  -14,970
  -15,556
Cash from investing activities, $m
  -680
  -959
  -1,314
  -1,753
  -2,280
  -2,898
  -3,610
  -4,412
  -5,302
  -6,274
  -7,324
  -8,444
  -9,629
  -10,874
  -12,174
  -13,524
  -14,921
  -16,365
  -17,852
  -19,385
  -20,964
  -22,589
  -24,264
  -25,993
  -27,777
  -29,621
  -31,529
  -33,506
  -35,557
  -37,687
Free cash flow, $m
  -874
  -1,246
  -1,722
  -2,315
  -3,036
  -3,891
  -4,884
  -6,017
  -7,289
  -8,695
  -10,230
  -11,889
  -13,664
  -15,549
  -17,538
  -19,626
  -21,808
  -24,081
  -26,443
  -28,894
  -31,434
  -34,064
  -36,787
  -39,605
  -42,523
  -45,547
  -48,680
  -51,930
  -55,303
  -58,806
Issuance/(repayment) of debt, $m
  260
  362
  488
  638
  814
  1,014
  1,236
  1,476
  1,732
  1,999
  2,275
  2,554
  2,834
  3,113
  3,388
  3,657
  3,921
  4,179
  4,430
  4,676
  4,918
  5,157
  5,393
  5,630
  5,868
  6,108
  6,354
  6,605
  6,865
  7,134
Issuance/(repurchase) of shares, $m
  780
  1,115
  1,544
  2,082
  2,737
  3,518
  4,430
  5,474
  6,651
  7,958
  9,388
  10,943
  12,615
  14,397
  16,284
  18,271
  20,356
  22,534
  24,803
  27,163
  29,613
  32,155
  34,790
  37,521
  40,351
  43,285
  46,328
  49,484
  52,761
  56,165
Cash from financing (excl. dividends), $m  
  1,040
  1,477
  2,032
  2,720
  3,551
  4,532
  5,666
  6,950
  8,383
  9,957
  11,663
  13,497
  15,449
  17,510
  19,672
  21,928
  24,277
  26,713
  29,233
  31,839
  34,531
  37,312
  40,183
  43,151
  46,219
  49,393
  52,682
  56,089
  59,626
  63,299
Total cash flow (excl. dividends), $m
  167
  231
  310
  405
  516
  642
  781
  933
  1,094
  1,262
  1,432
  1,608
  1,785
  1,960
  2,134
  2,303
  2,470
  2,632
  2,790
  2,945
  3,097
  3,248
  3,397
  3,546
  3,695
  3,847
  4,001
  4,160
  4,323
  4,493
Retained Cash Flow (-), $m
  -780
  -1,115
  -1,544
  -2,082
  -2,737
  -3,518
  -4,430
  -5,474
  -6,651
  -7,958
  -9,388
  -10,943
  -12,615
  -14,397
  -16,284
  -18,271
  -20,356
  -22,534
  -24,803
  -27,163
  -29,613
  -32,155
  -34,790
  -37,521
  -40,351
  -43,285
  -46,328
  -49,484
  -52,761
  -56,165
Prev. year cash balance distribution, $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 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
  -614
  -883
  -1,234
  -1,677
  -2,221
  -2,876
  -3,648
  -4,541
  -5,557
  -6,696
  -7,956
  -9,335
  -10,830
  -12,436
  -14,150
  -15,968
  -17,886
  -19,902
  -22,013
  -24,218
  -26,516
  -28,907
  -31,393
  -33,975
  -36,656
  -39,438
  -42,326
  -45,324
  -48,438
  -51,673
Discount rate, %
  4.70
  4.94
  5.18
  5.44
  5.71
  6.00
  6.30
  6.61
  6.94
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.77
  11.31
  11.88
  12.47
  13.09
  13.75
  14.44
  15.16
  15.92
  16.71
  17.55
  18.42
  19.35
PV of cash for distribution, $m
  -586
  -802
  -1,061
  -1,356
  -1,683
  -2,028
  -2,379
  -2,721
  -3,037
  -3,312
  -3,534
  -3,691
  -3,777
  -3,788
  -3,725
  -3,593
  -3,400
  -3,156
  -2,874
  -2,567
  -2,247
  -1,929
  -1,622
  -1,336
  -1,076
  -848
  -652
  -490
  -359
  -256
Current shareholders' claim on cash, %
  60.0
  36.9
  23.3
  15.1
  9.9
  6.7
  4.6
  3.2
  2.3
  1.6
  1.2
  0.9
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

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

FINANCIAL RATIOS  of  Secure Energy Services Inc. (SES)

Valuation Ratios
P/E Ratio -23.5
Price to Sales 0.8
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 11.9
Price to Free Cash Flow 33.9
Growth Rates
Sales Growth Rate 4.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -44.7%
Cap. Spend. - 3 Yr. Gr. Rate -20.5%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 22.9%
Total Debt to Equity 23.4%
Interest Coverage -6
Management Effectiveness
Return On Assets -3.1%
Ret/ On Assets - 3 Yr. Avg. -3.6%
Return On Total Capital -4.4%
Ret/ On T. Cap. - 3 Yr. Avg. -5.1%
Return On Equity -5.6%
Return On Equity - 3 Yr. Avg. -7.1%
Asset Turnover 1
Profitability Ratios
Gross Margin 10.1%
Gross Margin - 3 Yr. Avg. 10.7%
EBITDA Margin 4.5%
EBITDA Margin - 3 Yr. Avg. 2.7%
Operating Margin -3.2%
Oper. Margin - 3 Yr. Avg. -4.7%
Pre-Tax Margin -4%
Pre-Tax Margin - 3 Yr. Avg. -5.2%
Net Profit Margin -3.5%
Net Profit Margin - 3 Yr. Avg. -4.7%
Effective Tax Rate 14%
Eff/ Tax Rate - 3 Yr. Avg. 22.1%
Payout Ratio -46.9%

SES stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SES stock intrinsic value calculation we used $1410 million for the last fiscal year's total revenue generated by Secure Energy Services Inc.. The default revenue input number comes from 2016 income statement of Secure Energy Services 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 SES stock valuation model: a) initial revenue growth rate of 52.7% 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 4.7%, whose default value for SES is calculated based on our internal credit rating of Secure Energy Services 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 Secure Energy Services 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 SES stock the variable cost ratio is equal to 113.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SES 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 Secure Energy Services Inc..

Corporate tax rate of 27% is the nominal tax rate for Secure Energy Services 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 SES 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 SES are equal to 76.5%.

Life of production assets of 9.7 years is the average useful life of capital assets used in Secure Energy Services 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 SES is equal to 10.1%. 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 - $927 million for Secure Energy Services 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 163.242 million for Secure Energy Services 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 Secure Energy Services Inc. at the current share price and the inputted number of shares is $1.2 billion.

RELATED COMPANIES Price Int.Val. Rating
GEI Gibson Energy 17.56 1.05  str.sell
TCW Trican Well Se 2.94 0.40  str.sell
ESI Ensign Energy 5.78 2.91  str.sell

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.