Intrinsic value of Ciner Resources - CINR

Previous Close

$27.31

  Intrinsic Value

$48.82

stock screener

  Rating & Target

str. buy

+79%

Previous close

$27.31

 
Intrinsic value

$48.82

 
Up/down potential

+79%

 
Rating

str. buy

We calculate the intrinsic value of CINR 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -2.26
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  475
  485
  496
  508
  523
  539
  556
  575
  595
  617
  641
  666
  694
  722
  753
  785
  820
  856
  895
  935
  978
  1,024
  1,072
  1,122
  1,175
  1,231
  1,290
  1,352
  1,417
  1,486
  1,558
Variable operating expenses, $m
 
  375
  383
  393
  404
  416
  430
  444
  460
  477
  496
  515
  536
  558
  582
  607
  634
  662
  692
  723
  756
  791
  828
  867
  908
  952
  997
  1,045
  1,096
  1,149
  1,204
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
  385
  375
  383
  393
  404
  416
  430
  444
  460
  477
  496
  515
  536
  558
  582
  607
  634
  662
  692
  723
  756
  791
  828
  867
  908
  952
  997
  1,045
  1,096
  1,149
  1,204
Operating income, $m
  90
  110
  113
  115
  119
  122
  126
  130
  135
  140
  146
  151
  157
  164
  171
  178
  186
  194
  203
  212
  222
  232
  243
  255
  267
  279
  293
  307
  322
  337
  354
EBITDA, $m
  117
  137
  141
  144
  148
  153
  158
  163
  169
  175
  182
  189
  197
  205
  214
  223
  233
  243
  254
  265
  278
  290
  304
  318
  333
  349
  366
  383
  402
  421
  442
Interest expense (income), $m
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  21
  22
Earnings before tax, $m
  86
  107
  109
  112
  115
  118
  122
  126
  130
  135
  140
  145
  151
  157
  163
  170
  177
  185
  193
  201
  210
  220
  230
  241
  252
  263
  276
  289
  302
  317
  332
Tax expense, $m
  0
  29
  29
  30
  31
  32
  33
  34
  35
  36
  38
  39
  41
  42
  44
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
  78
  82
  86
  90
Net income, $m
  41
  78
  80
  82
  84
  86
  89
  92
  95
  98
  102
  106
  110
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
  176
  184
  192
  201
  211
  221
  231
  242

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  20
  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
  413
  401
  410
  420
  432
  445
  460
  475
  492
  511
  530
  551
  574
  597
  623
  650
  678
  708
  740
  774
  809
  847
  886
  928
  972
  1,018
  1,067
  1,118
  1,172
  1,229
  1,289
Adjusted assets (=assets-cash), $m
  393
  401
  410
  420
  432
  445
  460
  475
  492
  511
  530
  551
  574
  597
  623
  650
  678
  708
  740
  774
  809
  847
  886
  928
  972
  1,018
  1,067
  1,118
  1,172
  1,229
  1,289
Revenue / Adjusted assets
  1.209
  1.209
  1.210
  1.210
  1.211
  1.211
  1.209
  1.211
  1.209
  1.207
  1.209
  1.209
  1.209
  1.209
  1.209
  1.208
  1.209
  1.209
  1.209
  1.208
  1.209
  1.209
  1.210
  1.209
  1.209
  1.209
  1.209
  1.209
  1.209
  1.209
  1.209
Average production assets, $m
  256
  261
  267
  274
  281
  290
  299
  309
  320
  332
  345
  359
  373
  389
  405
  423
  441
  461
  481
  503
  526
  551
  577
  604
  632
  662
  694
  727
  763
  799
  838
Working capital, $m
  80
  70
  72
  74
  76
  78
  81
  83
  86
  90
  93
  97
  101
  105
  109
  114
  119
  124
  130
  136
  142
  148
  155
  163
  170
  179
  187
  196
  206
  215
  226
Total debt, $m
  98
  94
  100
  107
  114
  123
  132
  142
  153
  164
  177
  190
  205
  220
  236
  253
  271
  291
  311
  332
  355
  379
  404
  431
  459
  489
  520
  553
  587
  623
  662
Total liabilities, $m
  260
  256
  262
  269
  276
  285
  294
  304
  315
  326
  339
  352
  367
  382
  398
  415
  433
  453
  473
  494
  517
  541
  566
  593
  621
  651
  682
  715
  749
  785
  824
Total equity, $m
  153
  145
  148
  152
  156
  161
  166
  172
  178
  184
  191
  199
  207
  216
  225
  235
  245
  256
  267
  279
  292
  306
  320
  335
  351
  368
  385
  404
  423
  444
  465
Total liabilities and equity, $m
  413
  401
  410
  421
  432
  446
  460
  476
  493
  510
  530
  551
  574
  598
  623
  650
  678
  709
  740
  773
  809
  847
  886
  928
  972
  1,019
  1,067
  1,119
  1,172
  1,229
  1,289
Debt-to-equity ratio
  0.641
  0.650
  0.680
  0.700
  0.730
  0.760
  0.790
  0.830
  0.860
  0.890
  0.920
  0.960
  0.990
  1.020
  1.050
  1.080
  1.110
  1.140
  1.160
  1.190
  1.220
  1.240
  1.260
  1.290
  1.310
  1.330
  1.350
  1.370
  1.390
  1.400
  1.420
Adjusted equity ratio
  0.338
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  41
  78
  80
  82
  84
  86
  89
  92
  95
  98
  102
  106
  110
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
  176
  184
  192
  201
  211
  221
  231
  242
Depreciation, amort., depletion, $m
  27
  27
  28
  29
  30
  30
  31
  33
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  51
  53
  55
  58
  61
  64
  67
  70
  73
  77
  80
  84
  88
Funds from operations, $m
  142
  105
  108
  110
  113
  117
  120
  124
  129
  133
  138
  144
  149
  155
  162
  169
  176
  183
  192
  200
  209
  219
  229
  239
  250
  262
  274
  287
  301
  315
  331
Change in working capital, $m
  14
  1
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
Cash from operations, $m
  128
  104
  106
  109
  111
  115
  118
  122
  126
  130
  135
  140
  145
  151
  157
  164
  171
  178
  186
  194
  203
  212
  222
  232
  243
  254
  266
  278
  292
  305
  320
Maintenance CAPEX, $m
  0
  -27
  -27
  -28
  -29
  -30
  -30
  -31
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -43
  -44
  -46
  -48
  -51
  -53
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
New CAPEX, $m
  -25
  -5
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
Cash from investing activities, $m
  -25
  -32
  -33
  -35
  -37
  -39
  -39
  -41
  -44
  -46
  -48
  -50
  -53
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -79
  -84
  -88
  -93
  -97
  -102
  -106
  -112
  -117
  -123
Free cash flow, $m
  103
  72
  73
  74
  75
  76
  78
  80
  82
  85
  87
  90
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  150
  157
  164
  172
  180
  188
  197
Issuance/(repayment) of debt, $m
  -12
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  30
  31
  33
  34
  36
  38
Issuance/(repurchase) of shares, $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
  0
Cash from financing (excl. dividends), $m  
  -60
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  30
  31
  33
  34
  36
  38
Total cash flow (excl. dividends), $m
  43
  77
  79
  80
  82
  85
  87
  90
  93
  96
  100
  103
  107
  112
  116
  121
  126
  131
  137
  143
  149
  156
  163
  171
  179
  187
  196
  205
  214
  225
  235
Retained Cash Flow (-), $m
  3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -19
  -20
  -22
Prev. year cash balance distribution, $m
 
  11
  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
  75
  77
  78
  80
  82
  84
  87
  90
  93
  96
  99
  103
  107
  111
  116
  121
  126
  131
  137
  143
  149
  156
  163
  170
  178
  186
  195
  204
  214
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
  69
  67
  64
  62
  60
  57
  54
  52
  49
  46
  42
  39
  36
  33
  29
  26
  23
  20
  17
  15
  12
  10
  8
  7
  5
  4
  3
  2
  2
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Ciner Resources LP, through its subsidiary, Ciner Wyoming LLC (Ciner Wyoming), produces soda ash and serves a global market from its facility in the Green River Basin of Wyoming. The Company processes trona ore into soda ash, a raw material in flat glass, container glass, detergents, chemicals, paper and other consumer and industrial products. As of December 31, 2016, its Green River Basin surface operations were situated on approximately 880 acres in Wyoming, and the Company's mining operations included approximately 23,500 acres of leased and licensed subsurface mining area. The Company's mining leases and license are located in two mining beds, designated by the United States Geological Survey as beds 24 and 25, at depths of 800 to 1100 feet, respectively, below the surface. The Company uses a continuous mining technique to mine trona and roof bolt the ceiling simultaneously. The Company's soda ash is shipped by rail or truck from its Green River Basin operations.

FINANCIAL RATIOS  of  Ciner Resources (CINR)

Valuation Ratios
P/E Ratio 13.4
Price to Sales 1.2
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 4.3
Price to Free Cash Flow 5.3
Growth Rates
Sales Growth Rate -2.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -30.6%
Cap. Spend. - 3 Yr. Gr. Rate 9.3%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 58.2%
Total Debt to Equity 64.1%
Interest Coverage 30
Management Effectiveness
Return On Assets 10.5%
Ret/ On Assets - 3 Yr. Avg. 11.5%
Return On Total Capital 15.9%
Ret/ On T. Cap. - 3 Yr. Avg. 16.5%
Return On Equity 26.5%
Return On Equity - 3 Yr. Avg. 30.5%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 24%
Gross Margin - 3 Yr. Avg. 25.3%
EBITDA Margin 24.4%
EBITDA Margin - 3 Yr. Avg. 25.9%
Operating Margin 18.9%
Oper. Margin - 3 Yr. Avg. 20.7%
Pre-Tax Margin 18.1%
Pre-Tax Margin - 3 Yr. Avg. 19.9%
Net Profit Margin 8.6%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 107.3%

CINR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CINR stock intrinsic value calculation we used $475 million for the last fiscal year's total revenue generated by Ciner Resources. The default revenue input number comes from 2016 income statement of Ciner Resources. 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 CINR stock valuation model: a) initial revenue growth rate of 2% 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 CINR is calculated based on our internal credit rating of Ciner Resources, 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 Ciner Resources.
    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 CINR stock the variable cost ratio is equal to 77.3%.

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 CINR 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 Ciner Resources.

Corporate tax rate of 27% is the nominal tax rate for Ciner Resources. 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 CINR 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 CINR are equal to 53.8%.

Life of production assets of 9.5 years is the average useful life of capital assets used in Ciner Resources 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 CINR is equal to 14.5%. 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 - $153 million for Ciner Resources - 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 20.454 million for Ciner Resources 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 Ciner Resources at the current share price and the inputted number of shares is $0.6 billion.

RELATED COMPANIES Price Int.Val. Rating
IPI Intrepid Potas 4.20 0.70  str.sell
CMP Compass Minera 74.45 223.07  str.buy
POT Potash of Sask 20.65 2.42  str.sell

COMPANY NEWS

▶ Ciner Resources LP to Host Earnings Call   [Nov-07-17 06:30AM  ACCESSWIRE]
▶ Ciner Resources posts 3Q profit   [05:03AM  Associated Press]
▶ Ciner Resources LP to Release 3rd Quarter 2017 Results   [Nov-02-17 11:35AM  Business Wire]
▶ Ciner Resources LP Announces Quarterly Cash Distribution   [Oct-26-17 06:08PM  Business Wire]
▶ Ciner Resources posts 2Q profit   [12:14AM  Associated Press]
▶ Ciner Resources LP to Release 2nd Quarter 2017 Results   [Aug-01-17 10:42AM  Business Wire]
▶ Ciner Resources LP Announces Quarterly Cash Distribution   [Jul-28-17 02:37PM  Business Wire]
▶ Ciner Resources misses 1Q profit forecasts   [May-08-17 06:42PM  Associated Press]
▶ Ciner Resources LP to Release 1st Quarter 2017 Results   [May-04-17 09:00AM  Business Wire]
▶ Ciner Resources LP Announces Quarterly Cash Distribution   [Apr-21-17 10:42AM  Business Wire]
▶ Ciner Resources misses 4Q profit forecasts   [Feb-16-17 06:11PM  Associated Press]
▶ Should You Avoid Tredegar Corporation (TG)?   [Dec-20-16 04:22PM  at Insider Monkey]
▶ Should You Avoid Materion Corp (MTRN)?   [Dec-14-16 11:20AM  at Insider Monkey]
Financial statements of CINR
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

ASSET ALLOCATION

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

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