Intrinsic value of MEG Energy Corp. - MEG

Previous Close

$5.42

  Intrinsic Value

$2.79

stock screener

  Rating & Target

sell

-49%

Previous close

$5.42

 
Intrinsic value

$2.79

 
Up/down potential

-49%

 
Rating

sell

We calculate the intrinsic value of MEG 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 1.6

 

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, %
  -3.32
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  1,862
  2,046
  2,239
  2,440
  2,649
  2,866
  3,093
  3,328
  3,572
  3,826
  4,090
  4,365
  4,650
  4,947
  5,256
  5,577
  5,913
  6,262
  6,626
  7,006
  7,403
  7,817
  8,250
  8,702
  9,175
  9,670
  10,187
  10,729
  11,296
  11,889
  12,511
Variable operating expenses, $m
 
  2,263
  2,476
  2,698
  2,930
  3,170
  3,421
  3,681
  3,951
  4,232
  4,524
  4,827
  5,143
  5,471
  5,813
  6,169
  6,539
  6,926
  7,328
  7,749
  8,188
  8,646
  9,124
  9,625
  10,148
  10,695
  11,267
  11,866
  12,493
  13,150
  13,838
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
  2,323
  2,263
  2,476
  2,698
  2,930
  3,170
  3,421
  3,681
  3,951
  4,232
  4,524
  4,827
  5,143
  5,471
  5,813
  6,169
  6,539
  6,926
  7,328
  7,749
  8,188
  8,646
  9,124
  9,625
  10,148
  10,695
  11,267
  11,866
  12,493
  13,150
  13,838
Operating income, $m
  -461
  -217
  -237
  -259
  -281
  -304
  -328
  -353
  -379
  -406
  -434
  -463
  -493
  -524
  -557
  -591
  -627
  -664
  -702
  -743
  -785
  -829
  -874
  -922
  -973
  -1,025
  -1,080
  -1,137
  -1,197
  -1,260
  -1,326
EBITDA, $m
  39
  331
  362
  395
  428
  464
  500
  538
  578
  619
  661
  706
  752
  800
  850
  902
  956
  1,013
  1,072
  1,133
  1,197
  1,264
  1,334
  1,407
  1,484
  1,564
  1,647
  1,735
  1,827
  1,923
  2,023
Interest expense (income), $m
  0
  177
  197
  217
  238
  261
  284
  308
  332
  358
  385
  413
  442
  472
  504
  536
  571
  606
  643
  682
  722
  764
  808
  853
  901
  951
  1,004
  1,058
  1,116
  1,176
  1,239
Earnings before tax, $m
  -636
  -394
  -434
  -476
  -519
  -564
  -611
  -660
  -711
  -764
  -819
  -876
  -935
  -997
  -1,061
  -1,128
  -1,197
  -1,270
  -1,345
  -1,424
  -1,506
  -1,592
  -1,682
  -1,776
  -1,874
  -1,976
  -2,083
  -2,196
  -2,313
  -2,436
  -2,565
Tax expense, $m
  -207
  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
  -429
  -394
  -434
  -476
  -519
  -564
  -611
  -660
  -711
  -764
  -819
  -876
  -935
  -997
  -1,061
  -1,128
  -1,197
  -1,270
  -1,345
  -1,424
  -1,506
  -1,592
  -1,682
  -1,776
  -1,874
  -1,976
  -2,083
  -2,196
  -2,313
  -2,436
  -2,565

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  156
  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
  8,921
  9,653
  10,561
  11,508
  12,495
  13,521
  14,588
  15,697
  16,850
  18,048
  19,293
  20,588
  21,933
  23,334
  24,791
  26,308
  27,889
  29,537
  31,255
  33,048
  34,919
  36,873
  38,914
  41,048
  43,278
  45,611
  48,052
  50,607
  53,282
  56,083
  59,016
Adjusted assets (=assets-cash), $m
  8,765
  9,653
  10,561
  11,508
  12,495
  13,521
  14,588
  15,697
  16,850
  18,048
  19,293
  20,588
  21,933
  23,334
  24,791
  26,308
  27,889
  29,537
  31,255
  33,048
  34,919
  36,873
  38,914
  41,048
  43,278
  45,611
  48,052
  50,607
  53,282
  56,083
  59,016
Revenue / Adjusted assets
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
  0.212
Average production assets, $m
  7,876
  8,656
  9,471
  10,320
  11,205
  12,125
  13,082
  14,077
  15,111
  16,185
  17,301
  18,462
  19,669
  20,925
  22,232
  23,592
  25,010
  26,488
  28,028
  29,636
  31,314
  33,066
  34,897
  36,810
  38,810
  40,903
  43,092
  45,383
  47,781
  50,293
  52,923
Working capital, $m
  97
  -47
  -51
  -56
  -61
  -66
  -71
  -77
  -82
  -88
  -94
  -100
  -107
  -114
  -121
  -128
  -136
  -144
  -152
  -161
  -170
  -180
  -190
  -200
  -211
  -222
  -234
  -247
  -260
  -273
  -288
Total debt, $m
  5,071
  5,624
  6,206
  6,814
  7,446
  8,104
  8,788
  9,499
  10,238
  11,006
  11,804
  12,634
  13,496
  14,394
  15,328
  16,301
  17,314
  18,370
  19,472
  20,621
  21,820
  23,073
  24,381
  25,749
  27,178
  28,674
  30,239
  31,876
  33,591
  35,386
  37,266
Total liabilities, $m
  5,634
  6,187
  6,769
  7,377
  8,009
  8,667
  9,351
  10,062
  10,801
  11,569
  12,367
  13,197
  14,059
  14,957
  15,891
  16,864
  17,877
  18,933
  20,035
  21,184
  22,383
  23,636
  24,944
  26,312
  27,741
  29,237
  30,802
  32,439
  34,154
  35,949
  37,829
Total equity, $m
  3,287
  3,465
  3,791
  4,131
  4,486
  4,854
  5,237
  5,635
  6,049
  6,479
  6,926
  7,391
  7,874
  8,377
  8,900
  9,445
  10,012
  10,604
  11,221
  11,864
  12,536
  13,237
  13,970
  14,736
  15,537
  16,375
  17,251
  18,168
  19,128
  20,134
  21,187
Total liabilities and equity, $m
  8,921
  9,652
  10,560
  11,508
  12,495
  13,521
  14,588
  15,697
  16,850
  18,048
  19,293
  20,588
  21,933
  23,334
  24,791
  26,309
  27,889
  29,537
  31,256
  33,048
  34,919
  36,873
  38,914
  41,048
  43,278
  45,612
  48,053
  50,607
  53,282
  56,083
  59,016
Debt-to-equity ratio
  1.543
  1.620
  1.640
  1.650
  1.660
  1.670
  1.680
  1.690
  1.690
  1.700
  1.700
  1.710
  1.710
  1.720
  1.720
  1.730
  1.730
  1.730
  1.740
  1.740
  1.740
  1.740
  1.750
  1.750
  1.750
  1.750
  1.750
  1.750
  1.760
  1.760
  1.760
Adjusted equity ratio
  0.357
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -429
  -394
  -434
  -476
  -519
  -564
  -611
  -660
  -711
  -764
  -819
  -876
  -935
  -997
  -1,061
  -1,128
  -1,197
  -1,270
  -1,345
  -1,424
  -1,506
  -1,592
  -1,682
  -1,776
  -1,874
  -1,976
  -2,083
  -2,196
  -2,313
  -2,436
  -2,565
Depreciation, amort., depletion, $m
  500
  548
  599
  653
  709
  767
  828
  891
  956
  1,024
  1,095
  1,168
  1,245
  1,324
  1,407
  1,493
  1,583
  1,676
  1,774
  1,876
  1,982
  2,093
  2,209
  2,330
  2,456
  2,589
  2,727
  2,872
  3,024
  3,183
  3,350
Funds from operations, $m
  -119
  154
  165
  177
  190
  203
  217
  231
  245
  260
  276
  293
  310
  328
  346
  366
  386
  407
  429
  452
  475
  500
  527
  554
  583
  613
  644
  677
  711
  747
  785
Change in working capital, $m
  -25
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
Cash from operations, $m
  -94
  158
  170
  182
  195
  208
  222
  236
  251
  266
  282
  299
  316
  334
  353
  373
  393
  415
  437
  460
  485
  510
  537
  564
  593
  624
  656
  689
  724
  761
  799
Maintenance CAPEX, $m
  0
  -498
  -548
  -599
  -653
  -709
  -767
  -828
  -891
  -956
  -1,024
  -1,095
  -1,168
  -1,245
  -1,324
  -1,407
  -1,493
  -1,583
  -1,676
  -1,774
  -1,876
  -1,982
  -2,093
  -2,209
  -2,330
  -2,456
  -2,589
  -2,727
  -2,872
  -3,024
  -3,183
New CAPEX, $m
  -140
  -781
  -815
  -849
  -885
  -920
  -957
  -995
  -1,034
  -1,074
  -1,116
  -1,161
  -1,207
  -1,256
  -1,307
  -1,361
  -1,418
  -1,478
  -1,541
  -1,608
  -1,678
  -1,752
  -1,831
  -1,913
  -2,000
  -2,092
  -2,189
  -2,291
  -2,398
  -2,512
  -2,631
Cash from investing activities, $m
  -131
  -1,279
  -1,363
  -1,448
  -1,538
  -1,629
  -1,724
  -1,823
  -1,925
  -2,030
  -2,140
  -2,256
  -2,375
  -2,501
  -2,631
  -2,768
  -2,911
  -3,061
  -3,217
  -3,382
  -3,554
  -3,734
  -3,924
  -4,122
  -4,330
  -4,548
  -4,778
  -5,018
  -5,270
  -5,536
  -5,814
Free cash flow, $m
  -225
  -1,121
  -1,193
  -1,267
  -1,343
  -1,422
  -1,503
  -1,587
  -1,674
  -1,764
  -1,859
  -1,957
  -2,059
  -2,166
  -2,278
  -2,395
  -2,517
  -2,646
  -2,780
  -2,921
  -3,069
  -3,224
  -3,387
  -3,557
  -3,737
  -3,925
  -4,122
  -4,329
  -4,547
  -4,775
  -5,015
Issuance/(repayment) of debt, $m
  -17
  570
  582
  607
  632
  658
  684
  711
  739
  768
  798
  830
  863
  898
  934
  973
  1,013
  1,056
  1,101
  1,149
  1,199
  1,252
  1,308
  1,368
  1,430
  1,496
  1,565
  1,638
  1,714
  1,795
  1,880
Issuance/(repurchase) of shares, $m
  0
  711
  760
  816
  873
  933
  995
  1,059
  1,125
  1,194
  1,266
  1,340
  1,418
  1,499
  1,584
  1,672
  1,765
  1,861
  1,962
  2,068
  2,178
  2,294
  2,415
  2,542
  2,675
  2,814
  2,960
  3,113
  3,273
  3,441
  3,618
Cash from financing (excl. dividends), $m  
  -17
  1,281
  1,342
  1,423
  1,505
  1,591
  1,679
  1,770
  1,864
  1,962
  2,064
  2,170
  2,281
  2,397
  2,518
  2,645
  2,778
  2,917
  3,063
  3,217
  3,377
  3,546
  3,723
  3,910
  4,105
  4,310
  4,525
  4,751
  4,987
  5,236
  5,498
Total cash flow (excl. dividends), $m
  -252
  161
  150
  156
  163
  169
  176
  183
  190
  198
  205
  213
  222
  231
  240
  250
  261
  272
  283
  296
  309
  322
  337
  352
  368
  385
  402
  421
  441
  462
  484
Retained Cash Flow (-), $m
  391
  -711
  -760
  -816
  -873
  -933
  -995
  -1,059
  -1,125
  -1,194
  -1,266
  -1,340
  -1,418
  -1,499
  -1,584
  -1,672
  -1,765
  -1,861
  -1,962
  -2,068
  -2,178
  -2,294
  -2,415
  -2,542
  -2,675
  -2,814
  -2,960
  -3,113
  -3,273
  -3,441
  -3,618
Prev. year cash balance distribution, $m
 
  139
  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
 
  -411
  -610
  -660
  -711
  -764
  -819
  -876
  -935
  -996
  -1,060
  -1,127
  -1,196
  -1,269
  -1,344
  -1,422
  -1,504
  -1,590
  -1,679
  -1,772
  -1,870
  -1,972
  -2,078
  -2,190
  -2,307
  -2,429
  -2,557
  -2,692
  -2,832
  -2,980
  -3,134
Discount rate, %
 
  10.80
  11.34
  11.91
  12.50
  13.13
  13.78
  14.47
  15.20
  15.96
  16.75
  17.59
  18.47
  19.40
  20.37
  21.38
  22.45
  23.58
  24.75
  25.99
  27.29
  28.66
  30.09
  31.59
  33.17
  34.83
  36.57
  38.40
  40.32
  42.34
  44.45
PV of cash for distribution, $m
 
  -371
  -492
  -471
  -444
  -412
  -377
  -340
  -301
  -263
  -225
  -190
  -156
  -127
  -100
  -78
  -59
  -43
  -31
  -22
  -15
  -10
  -6
  -4
  -2
  -1
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  75.6
  57.6
  44.0
  33.8
  26.1
  20.2
  15.6
  12.2
  9.5
  7.4
  5.8
  4.6
  3.6
  2.8
  2.2
  1.8
  1.4
  1.1
  0.9
  0.7
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

MEG Energy Corp (MEG) is a Canada-based oil sands company. It is focused on sustainable in situ oil sands development and production in the southern Athabasca oil sands region of Alberta, Canada. MEG is engaged in developing enhanced oil recovery projects that utilize steam-assisted gravity drainage (SAGD) extraction methods. The Company has the following commercial SAGD projects: the Christina Lake Project and the Surmont Project. The Christina Lake Project is situated on over 80 square miles of oil sands leases in the southern Athabasca oil sands region of Alberta. MEG owns working interest in the oil sands leases associated with the Christina Lake Project. The Surmont Project comprises over 30 square miles of lands in the southern Athabasca oil sands region of Alberta. The Surmont Project is located approximately 50 miles south of Fort McMurray. MEG owns working interest in the oil sands leases associated with the Surmont Project. MEG also holds interest in the Access Pipeline.

FINANCIAL RATIOS  of  MEG Energy Corp. (MEG)

Valuation Ratios
P/E Ratio -2.9
Price to Sales 0.7
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -13.1
Price to Free Cash Flow -5.2
Growth Rates
Sales Growth Rate -3.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55.4%
Cap. Spend. - 3 Yr. Gr. Rate -42.5%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 153.8%
Total Debt to Equity 154.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -4.7%
Ret/ On Assets - 3 Yr. Avg. -6%
Return On Total Capital -5%
Ret/ On T. Cap. - 3 Yr. Avg. -6.4%
Return On Equity -12.3%
Return On Equity - 3 Yr. Avg. -14.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 34.5%
Gross Margin - 3 Yr. Avg. 41.4%
EBITDA Margin -7.3%
EBITDA Margin - 3 Yr. Avg. -12%
Operating Margin -24.8%
Oper. Margin - 3 Yr. Avg. -5.4%
Pre-Tax Margin -34.2%
Pre-Tax Margin - 3 Yr. Avg. -33.5%
Net Profit Margin -23%
Net Profit Margin - 3 Yr. Avg. -29.2%
Effective Tax Rate 32.5%
Eff/ Tax Rate - 3 Yr. Avg. -130.1%
Payout Ratio 0%

MEG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MEG stock intrinsic value calculation we used $1862 million for the last fiscal year's total revenue generated by MEG Energy Corp.. The default revenue input number comes from 2016 income statement of MEG Energy Corp.. 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 MEG stock valuation model: a) initial revenue growth rate of 9.9% 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 10.8%, whose default value for MEG is calculated based on our internal credit rating of MEG Energy Corp., 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 MEG Energy Corp..
    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 MEG stock the variable cost ratio is equal to 110.6%.

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 MEG 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 MEG Energy Corp..

Corporate tax rate of 27% is the nominal tax rate for MEG Energy Corp.. 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 MEG 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 MEG are equal to 423%.

Life of production assets of 15.8 years is the average useful life of capital assets used in MEG Energy Corp. 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 MEG is equal to -2.3%. 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 - $3287 million for MEG Energy Corp. - 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 294.408 million for MEG Energy Corp. 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 MEG Energy Corp. at the current share price and the inputted number of shares is $1.6 billion.

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Financial statements of MEG
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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