Intrinsic value of Alamos Gold Inc. - AGI

Previous Close

$8.45

  Intrinsic Value

$1.97

stock screener

  Rating & Target

str. sell

-77%

  Value-price divergence*

0%

Previous close

$8.45

 
Intrinsic value

$1.97

 
Up/down potential

-77%

 
Rating

str. sell

 
Value-price divergence*

0%

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

We calculate the intrinsic value of AGI 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 2.6

 

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, %
  35.63
  15.60
  14.54
  13.59
  12.73
  11.95
  11.26
  10.63
  10.07
  9.56
  9.11
  8.70
  8.33
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.68
  5.62
  5.55
  5.50
Revenue, $m
  651
  753
  862
  979
  1,104
  1,236
  1,375
  1,521
  1,674
  1,834
  2,001
  2,175
  2,356
  2,545
  2,741
  2,944
  3,155
  3,375
  3,604
  3,841
  4,088
  4,345
  4,613
  4,892
  5,182
  5,485
  5,801
  6,131
  6,475
  6,835
  7,211
Variable operating expenses, $m
 
  1,838
  2,105
  2,391
  2,695
  3,017
  3,357
  3,714
  4,088
  4,479
  4,887
  5,312
  5,754
  6,214
  6,692
  7,189
  7,706
  8,242
  8,800
  9,380
  9,984
  10,611
  11,265
  11,946
  12,655
  13,395
  14,167
  14,972
  15,813
  16,691
  17,609
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
  623
  1,838
  2,105
  2,391
  2,695
  3,017
  3,357
  3,714
  4,088
  4,479
  4,887
  5,312
  5,754
  6,214
  6,692
  7,189
  7,706
  8,242
  8,800
  9,380
  9,984
  10,611
  11,265
  11,946
  12,655
  13,395
  14,167
  14,972
  15,813
  16,691
  17,609
Operating income, $m
  29
  -1,085
  -1,243
  -1,412
  -1,592
  -1,782
  -1,982
  -2,193
  -2,414
  -2,645
  -2,886
  -3,137
  -3,398
  -3,670
  -3,952
  -4,245
  -4,550
  -4,867
  -5,196
  -5,539
  -5,895
  -6,266
  -6,652
  -7,054
  -7,473
  -7,910
  -8,365
  -8,841
  -9,338
  -9,856
  -10,398
EBITDA, $m
  190
  -899
  -1,029
  -1,169
  -1,318
  -1,475
  -1,641
  -1,816
  -1,999
  -2,190
  -2,389
  -2,597
  -2,813
  -3,038
  -3,272
  -3,515
  -3,768
  -4,030
  -4,303
  -4,586
  -4,881
  -5,188
  -5,508
  -5,841
  -6,188
  -6,549
  -6,927
  -7,320
  -7,731
  -8,161
  -8,610
Interest expense (income), $m
  0
  14
  20
  26
  32
  38
  45
  53
  60
  69
  77
  86
  95
  105
  115
  125
  136
  147
  159
  171
  184
  197
  210
  225
  239
  255
  271
  288
  305
  323
  343
Earnings before tax, $m
  -10
  -1,099
  -1,263
  -1,437
  -1,623
  -1,820
  -2,028
  -2,246
  -2,475
  -2,714
  -2,963
  -3,223
  -3,493
  -3,774
  -4,067
  -4,371
  -4,686
  -5,014
  -5,355
  -5,710
  -6,079
  -6,463
  -6,862
  -7,279
  -7,712
  -8,165
  -8,636
  -9,129
  -9,643
  -10,180
  -10,741
Tax expense, $m
  14
  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
  -24
  -1,099
  -1,263
  -1,437
  -1,623
  -1,820
  -2,028
  -2,246
  -2,475
  -2,714
  -2,963
  -3,223
  -3,493
  -3,774
  -4,067
  -4,371
  -4,686
  -5,014
  -5,355
  -5,710
  -6,079
  -6,463
  -6,862
  -7,279
  -7,712
  -8,165
  -8,636
  -9,129
  -9,643
  -10,180
  -10,741

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  341
  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
  3,367
  3,500
  4,009
  4,554
  5,133
  5,747
  6,394
  7,074
  7,787
  8,531
  9,308
  10,117
  10,960
  11,836
  12,747
  13,693
  14,677
  15,699
  16,761
  17,866
  19,015
  20,211
  21,456
  22,753
  24,104
  25,513
  26,983
  28,517
  30,118
  31,791
  33,540
Adjusted assets (=assets-cash), $m
  3,026
  3,500
  4,009
  4,554
  5,133
  5,747
  6,394
  7,074
  7,787
  8,531
  9,308
  10,117
  10,960
  11,836
  12,747
  13,693
  14,677
  15,699
  16,761
  17,866
  19,015
  20,211
  21,456
  22,753
  24,104
  25,513
  26,983
  28,517
  30,118
  31,791
  33,540
Revenue / Adjusted assets
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
  0.215
Average production assets, $m
  2,552
  2,949
  3,378
  3,837
  4,325
  4,842
  5,388
  5,961
  6,561
  7,188
  7,843
  8,525
  9,235
  9,973
  10,740
  11,538
  12,366
  13,228
  14,123
  15,054
  16,022
  17,029
  18,078
  19,171
  20,310
  21,497
  22,735
  24,028
  25,377
  26,787
  28,260
Working capital, $m
  479
  166
  190
  215
  243
  272
  302
  335
  368
  404
  440
  479
  518
  560
  603
  648
  694
  743
  793
  845
  899
  956
  1,015
  1,076
  1,140
  1,207
  1,276
  1,349
  1,425
  1,504
  1,586
Total debt, $m
  412
  563
  729
  907
  1,096
  1,296
  1,507
  1,728
  1,960
  2,203
  2,456
  2,720
  2,995
  3,281
  3,577
  3,886
  4,207
  4,540
  4,886
  5,246
  5,621
  6,011
  6,417
  6,839
  7,280
  7,739
  8,218
  8,718
  9,241
  9,786
  10,356
Total liabilities, $m
  990
  1,141
  1,307
  1,485
  1,674
  1,874
  2,085
  2,306
  2,538
  2,781
  3,034
  3,298
  3,573
  3,859
  4,155
  4,464
  4,785
  5,118
  5,464
  5,824
  6,199
  6,589
  6,995
  7,417
  7,858
  8,317
  8,796
  9,296
  9,819
  10,364
  10,934
Total equity, $m
  2,377
  2,359
  2,702
  3,069
  3,460
  3,874
  4,310
  4,768
  5,248
  5,750
  6,274
  6,819
  7,387
  7,977
  8,591
  9,229
  9,892
  10,581
  11,297
  12,042
  12,816
  13,622
  14,461
  15,335
  16,246
  17,196
  18,186
  19,220
  20,300
  21,427
  22,606
Total liabilities and equity, $m
  3,367
  3,500
  4,009
  4,554
  5,134
  5,748
  6,395
  7,074
  7,786
  8,531
  9,308
  10,117
  10,960
  11,836
  12,746
  13,693
  14,677
  15,699
  16,761
  17,866
  19,015
  20,211
  21,456
  22,752
  24,104
  25,513
  26,982
  28,516
  30,119
  31,791
  33,540
Debt-to-equity ratio
  0.173
  0.240
  0.270
  0.300
  0.320
  0.330
  0.350
  0.360
  0.370
  0.380
  0.390
  0.400
  0.410
  0.410
  0.420
  0.420
  0.430
  0.430
  0.430
  0.440
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
Adjusted equity ratio
  0.673
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -24
  -1,099
  -1,263
  -1,437
  -1,623
  -1,820
  -2,028
  -2,246
  -2,475
  -2,714
  -2,963
  -3,223
  -3,493
  -3,774
  -4,067
  -4,371
  -4,686
  -5,014
  -5,355
  -5,710
  -6,079
  -6,463
  -6,862
  -7,279
  -7,712
  -8,165
  -8,636
  -9,129
  -9,643
  -10,180
  -10,741
Depreciation, amort., depletion, $m
  161
  187
  214
  243
  274
  306
  341
  377
  415
  455
  496
  540
  584
  631
  680
  730
  783
  837
  894
  953
  1,014
  1,078
  1,144
  1,213
  1,285
  1,361
  1,439
  1,521
  1,606
  1,695
  1,789
Funds from operations, $m
  166
  -913
  -1,049
  -1,195
  -1,350
  -1,514
  -1,687
  -1,869
  -2,059
  -2,259
  -2,467
  -2,683
  -2,909
  -3,143
  -3,387
  -3,640
  -3,904
  -4,177
  -4,462
  -4,757
  -5,065
  -5,385
  -5,718
  -6,065
  -6,427
  -6,804
  -7,197
  -7,608
  -8,037
  -8,484
  -8,952
Change in working capital, $m
  -17
  22
  24
  26
  27
  29
  31
  32
  34
  35
  37
  38
  40
  41
  43
  45
  47
  48
  50
  52
  54
  57
  59
  61
  64
  67
  70
  73
  76
  79
  83
Cash from operations, $m
  183
  -935
  -1,073
  -1,220
  -1,377
  -1,543
  -1,717
  -1,901
  -2,093
  -2,294
  -2,503
  -2,721
  -2,948
  -3,185
  -3,430
  -3,685
  -3,950
  -4,225
  -4,512
  -4,810
  -5,119
  -5,441
  -5,777
  -6,127
  -6,491
  -6,871
  -7,267
  -7,681
  -8,112
  -8,563
  -9,035
Maintenance CAPEX, $m
  0
  -161
  -187
  -214
  -243
  -274
  -306
  -341
  -377
  -415
  -455
  -496
  -540
  -584
  -631
  -680
  -730
  -783
  -837
  -894
  -953
  -1,014
  -1,078
  -1,144
  -1,213
  -1,285
  -1,361
  -1,439
  -1,521
  -1,606
  -1,695
New CAPEX, $m
  -198
  -398
  -429
  -459
  -488
  -517
  -545
  -573
  -600
  -627
  -655
  -682
  -710
  -738
  -767
  -797
  -829
  -861
  -895
  -931
  -968
  -1,008
  -1,049
  -1,093
  -1,139
  -1,187
  -1,238
  -1,292
  -1,349
  -1,410
  -1,473
Cash from investing activities, $m
  -205
  -559
  -616
  -673
  -731
  -791
  -851
  -914
  -977
  -1,042
  -1,110
  -1,178
  -1,250
  -1,322
  -1,398
  -1,477
  -1,559
  -1,644
  -1,732
  -1,825
  -1,921
  -2,022
  -2,127
  -2,237
  -2,352
  -2,472
  -2,599
  -2,731
  -2,870
  -3,016
  -3,168
Free cash flow, $m
  -22
  -1,494
  -1,688
  -1,893
  -2,108
  -2,334
  -2,569
  -2,815
  -3,070
  -3,336
  -3,613
  -3,900
  -4,198
  -4,507
  -4,829
  -5,162
  -5,509
  -5,869
  -6,244
  -6,634
  -7,040
  -7,463
  -7,904
  -8,363
  -8,843
  -9,343
  -9,866
  -10,412
  -10,983
  -11,579
  -12,203
Issuance/(repayment) of debt, $m
  -13
  156
  166
  178
  189
  200
  211
  222
  232
  243
  253
  264
  275
  286
  297
  309
  321
  333
  346
  360
  375
  390
  406
  423
  441
  459
  479
  500
  522
  545
  570
Issuance/(repurchase) of shares, $m
  10
  1,418
  1,606
  1,804
  2,014
  2,234
  2,464
  2,704
  2,955
  3,215
  3,487
  3,768
  4,061
  4,365
  4,681
  5,008
  5,349
  5,703
  6,071
  6,455
  6,853
  7,269
  7,701
  8,153
  8,623
  9,114
  9,627
  10,163
  10,722
  11,307
  11,919
Cash from financing (excl. dividends), $m  
  -10
  1,574
  1,772
  1,982
  2,203
  2,434
  2,675
  2,926
  3,187
  3,458
  3,740
  4,032
  4,336
  4,651
  4,978
  5,317
  5,670
  6,036
  6,417
  6,815
  7,228
  7,659
  8,107
  8,576
  9,064
  9,573
  10,106
  10,663
  11,244
  11,852
  12,489
Total cash flow (excl. dividends), $m
  -34
  79
  83
  89
  95
  100
  106
  111
  116
  122
  127
  132
  138
  143
  149
  155
  161
  167
  174
  181
  188
  195
  203
  212
  221
  230
  240
  251
  262
  273
  286
Retained Cash Flow (-), $m
  -47
  -1,418
  -1,606
  -1,804
  -2,014
  -2,234
  -2,464
  -2,704
  -2,955
  -3,215
  -3,487
  -3,768
  -4,061
  -4,365
  -4,681
  -5,008
  -5,349
  -5,703
  -6,071
  -6,455
  -6,853
  -7,269
  -7,701
  -8,153
  -8,623
  -9,114
  -9,627
  -10,163
  -10,722
  -11,307
  -11,919
Prev. year cash balance distribution, $m
 
  336
  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
 
  -1,002
  -1,523
  -1,715
  -1,919
  -2,133
  -2,358
  -2,593
  -2,838
  -3,094
  -3,360
  -3,636
  -3,923
  -4,222
  -4,532
  -4,854
  -5,188
  -5,536
  -5,898
  -6,274
  -6,666
  -7,073
  -7,498
  -7,941
  -8,402
  -8,884
  -9,387
  -9,912
  -10,460
  -11,034
  -11,633
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
 
  -961
  -1,394
  -1,493
  -1,580
  -1,654
  -1,711
  -1,752
  -1,774
  -1,777
  -1,761
  -1,727
  -1,674
  -1,605
  -1,521
  -1,425
  -1,318
  -1,205
  -1,086
  -966
  -847
  -732
  -622
  -520
  -428
  -346
  -274
  -213
  -162
  -120
  -88
Current shareholders' claim on cash, %
  100
  60.7
  37.1
  22.9
  14.2
  8.9
  5.6
  3.5
  2.2
  1.4
  0.9
  0.6
  0.4
  0.2
  0.2
  0.1
  0.1
  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

Alamos Gold Inc. explores for, mines, develops, and produces gold deposits in the United States and Canada. The company also explores for silver and precious metals. Its principal assets include the Young-Davidson mine, which includes mineral leases and claims totaling 11,000 acres located in Northern Ontario, Canada; the Mulatos mine in the Salamandra concessions; and the El Chanate mine that comprises 22 mineral concessions covering 4,618 hectares situated in the State of Sonora, Mexico. The company also holds interest in a portfolio of development stage projects in Mexico, Turkey, Canada, and the United States. The company was formerly known as AuRico Gold Inc. and changed its name to Alamos Gold, Inc. in July 2015. Alamos Gold, Inc. is headquartered in Toronto, Canada.

FINANCIAL RATIOS  of  Alamos Gold Inc. (AGI)

Valuation Ratios
P/E Ratio -94
Price to Sales 3.5
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow -150.5
Growth Rates
Sales Growth Rate 35.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -10%
Cap. Spend. - 3 Yr. Gr. Rate -10.1%
Financial Strength
Quick Ratio 68
Current Ratio 0.1
LT Debt to Equity 17.1%
Total Debt to Equity 17.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.7%
Ret/ On Assets - 3 Yr. Avg. -9.8%
Return On Total Capital -0.9%
Ret/ On T. Cap. - 3 Yr. Avg. -11.6%
Return On Equity -1%
Return On Equity - 3 Yr. Avg. -13.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 35.6%
Gross Margin - 3 Yr. Avg. 30.7%
EBITDA Margin 23.2%
EBITDA Margin - 3 Yr. Avg. -42.5%
Operating Margin 4.3%
Oper. Margin - 3 Yr. Avg. -63.7%
Pre-Tax Margin -1.5%
Pre-Tax Margin - 3 Yr. Avg. -75.8%
Net Profit Margin -3.7%
Net Profit Margin - 3 Yr. Avg. -68.6%
Effective Tax Rate -140%
Eff/ Tax Rate - 3 Yr. Avg. -38.9%
Payout Ratio -29.2%

AGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AGI stock intrinsic value calculation we used $651 million for the last fiscal year's total revenue generated by Alamos Gold Inc.. The default revenue input number comes from 2016 income statement of Alamos Gold 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 AGI stock valuation model: a) initial revenue growth rate of 15.6% 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 AGI is calculated based on our internal credit rating of Alamos Gold 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 Alamos Gold 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 AGI stock the variable cost ratio is equal to 244.2%.

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 AGI 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 Alamos Gold Inc..

Corporate tax rate of 27% is the nominal tax rate for Alamos Gold 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 AGI 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 AGI are equal to 391.9%.

Life of production assets of 15.8 years is the average useful life of capital assets used in Alamos Gold 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 AGI is equal to 22%. 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 - $2377 million for Alamos Gold 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 301.843 million for Alamos Gold 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 Alamos Gold Inc. at the current share price and the inputted number of shares is $2.6 billion.

RELATED COMPANIES Price Int.Val. Rating
Stock chart of AGI Financial statements of AGI
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

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

Copyright © X-FIN.com 2005-2017. All rigths reserved.