Intrinsic value of Frontline - FRO

Previous Close

$5.11

  Intrinsic Value

$21.96

stock screener

  Rating & Target

str. buy

+330%

  Value-price divergence*

0%

Previous close

$5.11

 
Intrinsic value

$21.96

 
Up/down potential

+330%

 
Rating

str. buy

 
Value-price divergence*

0%

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

We calculate the intrinsic value of FRO 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 7.0

 

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, %
  64.27
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  754
  1,206
  1,864
  2,787
  4,044
  5,706
  7,845
  10,530
  13,826
  17,791
  22,471
  27,904
  34,116
  41,121
  48,926
  57,528
  66,919
  77,085
  88,010
  99,676
  112,066
  125,162
  138,953
  153,427
  168,577
  184,401
  200,902
  218,087
  235,966
  254,556
  273,879
Variable operating expenses, $m
 
  465
  707
  1,046
  1,507
  2,118
  2,903
  3,889
  5,099
  6,555
  8,273
  10,245
  12,526
  15,098
  17,964
  21,122
  24,570
  28,303
  32,314
  36,597
  41,146
  45,955
  51,018
  56,332
  61,895
  67,705
  73,763
  80,073
  86,637
  93,463
  100,557
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
  584
  465
  707
  1,046
  1,507
  2,118
  2,903
  3,889
  5,099
  6,555
  8,273
  10,245
  12,526
  15,098
  17,964
  21,122
  24,570
  28,303
  32,314
  36,597
  41,146
  45,955
  51,018
  56,332
  61,895
  67,705
  73,763
  80,073
  86,637
  93,463
  100,557
Operating income, $m
  170
  741
  1,157
  1,742
  2,537
  3,589
  4,942
  6,641
  8,727
  11,236
  14,198
  17,659
  21,590
  26,023
  30,962
  36,406
  42,349
  48,783
  55,696
  63,079
  70,920
  79,208
  87,935
  97,095
  106,682
  116,697
  127,139
  138,014
  149,329
  161,094
  173,322
EBITDA, $m
  311
  862
  1,332
  1,991
  2,890
  4,077
  5,605
  7,523
  9,878
  12,711
  16,055
  19,936
  24,374
  29,379
  34,955
  41,101
  47,810
  55,073
  62,878
  71,213
  80,064
  89,421
  99,274
  109,614
  120,438
  131,744
  143,533
  155,810
  168,584
  181,865
  195,670
Interest expense (income), $m
  53
  50
  81
  127
  191
  278
  393
  542
  728
  956
  1,231
  1,556
  1,933
  2,364
  2,849
  3,391
  3,987
  4,638
  5,343
  6,101
  6,910
  7,769
  8,678
  9,634
  10,638
  11,688
  12,786
  13,930
  15,122
  16,362
  17,651
Earnings before tax, $m
  118
  691
  1,076
  1,615
  2,346
  3,310
  4,549
  6,100
  7,999
  10,280
  12,967
  16,103
  19,657
  23,660
  28,113
  33,016
  38,362
  44,144
  50,353
  56,978
  64,010
  71,439
  79,258
  87,461
  96,045
  105,008
  114,354
  124,084
  134,207
  144,732
  155,671
Tax expense, $m
  0
  187
  290
  436
  633
  894
  1,228
  1,647
  2,160
  2,776
  3,501
  4,348
  5,307
  6,388
  7,591
  8,914
  10,358
  11,919
  13,595
  15,384
  17,283
  19,288
  21,400
  23,614
  25,932
  28,352
  30,875
  33,503
  36,236
  39,078
  42,031
Net income, $m
  117
  504
  785
  1,179
  1,713
  2,417
  3,320
  4,453
  5,840
  7,504
  9,466
  11,755
  14,350
  17,272
  20,523
  24,101
  28,004
  32,225
  36,758
  41,594
  46,727
  52,150
  57,858
  63,846
  70,113
  76,656
  83,478
  90,581
  97,971
  105,654
  113,640

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  221
  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
  2,966
  4,387
  6,778
  10,136
  14,707
  20,750
  28,526
  38,290
  50,277
  64,695
  81,714
  101,471
  124,058
  149,531
  177,913
  209,194
  243,343
  280,310
  320,037
  362,459
  407,511
  455,136
  505,283
  557,915
  613,006
  670,550
  730,554
  793,043
  858,058
  925,660
  995,923
Adjusted assets (=assets-cash), $m
  2,745
  4,387
  6,778
  10,136
  14,707
  20,750
  28,526
  38,290
  50,277
  64,695
  81,714
  101,471
  124,058
  149,531
  177,913
  209,194
  243,343
  280,310
  320,037
  362,459
  407,511
  455,136
  505,283
  557,915
  613,006
  670,550
  730,554
  793,043
  858,058
  925,660
  995,923
Revenue / Adjusted assets
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
Average production assets, $m
  615
  984
  1,521
  2,275
  3,300
  4,656
  6,401
  8,592
  11,282
  14,517
  18,337
  22,770
  27,839
  33,555
  39,924
  46,943
  54,606
  62,902
  71,816
  81,336
  91,446
  102,133
  113,386
  125,196
  137,559
  150,471
  163,936
  177,959
  192,548
  207,718
  223,485
Working capital, $m
  201
  166
  257
  385
  558
  787
  1,083
  1,453
  1,908
  2,455
  3,101
  3,851
  4,708
  5,675
  6,752
  7,939
  9,235
  10,638
  12,145
  13,755
  15,465
  17,272
  19,175
  21,173
  23,264
  25,447
  27,725
  30,096
  32,563
  35,129
  37,795
Total debt, $m
  1,405
  2,084
  3,253
  4,896
  7,131
  10,086
  13,888
  18,663
  24,525
  31,575
  39,897
  49,558
  60,603
  73,060
  86,938
  102,235
  118,934
  137,011
  156,437
  177,181
  199,212
  222,500
  247,022
  272,759
  299,699
  327,838
  357,180
  387,737
  419,530
  452,587
  486,945
Total liabilities, $m
  1,467
  2,145
  3,314
  4,957
  7,192
  10,147
  13,949
  18,724
  24,586
  31,636
  39,958
  49,619
  60,664
  73,121
  86,999
  102,296
  118,995
  137,072
  156,498
  177,242
  199,273
  222,561
  247,083
  272,820
  299,760
  327,899
  357,241
  387,798
  419,591
  452,648
  487,006
Total equity, $m
  1,500
  2,242
  3,463
  5,180
  7,515
  10,603
  14,577
  19,566
  25,692
  33,059
  41,756
  51,852
  63,394
  76,411
  90,913
  106,898
  124,348
  143,239
  163,539
  185,216
  208,238
  232,574
  258,200
  285,094
  313,246
  342,651
  373,313
  405,245
  438,468
  473,012
  508,916
Total liabilities and equity, $m
  2,967
  4,387
  6,777
  10,137
  14,707
  20,750
  28,526
  38,290
  50,278
  64,695
  81,714
  101,471
  124,058
  149,532
  177,912
  209,194
  243,343
  280,311
  320,037
  362,458
  407,511
  455,135
  505,283
  557,914
  613,006
  670,550
  730,554
  793,043
  858,059
  925,660
  995,922
Debt-to-equity ratio
  0.937
  0.930
  0.940
  0.950
  0.950
  0.950
  0.950
  0.950
  0.950
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
  0.960
Adjusted equity ratio
  0.466
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  117
  504
  785
  1,179
  1,713
  2,417
  3,320
  4,453
  5,840
  7,504
  9,466
  11,755
  14,350
  17,272
  20,523
  24,101
  28,004
  32,225
  36,758
  41,594
  46,727
  52,150
  57,858
  63,846
  70,113
  76,656
  83,478
  90,581
  97,971
  105,654
  113,640
Depreciation, amort., depletion, $m
  141
  121
  175
  250
  353
  488
  663
  882
  1,151
  1,474
  1,856
  2,277
  2,784
  3,355
  3,992
  4,694
  5,461
  6,290
  7,182
  8,134
  9,145
  10,213
  11,339
  12,520
  13,756
  15,047
  16,394
  17,796
  19,255
  20,772
  22,349
Funds from operations, $m
  270
  625
  960
  1,429
  2,065
  2,905
  3,983
  5,334
  6,990
  8,979
  11,322
  14,032
  17,134
  20,627
  24,515
  28,796
  33,465
  38,516
  43,939
  49,728
  55,872
  62,363
  69,197
  76,366
  83,868
  91,703
  99,872
  108,377
  117,226
  126,426
  135,988
Change in working capital, $m
  -16
  62
  91
  127
  173
  229
  295
  371
  455
  547
  646
  750
  857
  967
  1,077
  1,187
  1,296
  1,403
  1,508
  1,610
  1,710
  1,807
  1,903
  1,997
  2,091
  2,184
  2,277
  2,371
  2,467
  2,565
  2,666
Cash from operations, $m
  286
  563
  869
  1,301
  1,892
  2,675
  3,688
  4,964
  6,535
  8,431
  10,676
  13,283
  16,276
  19,660
  23,438
  27,609
  32,169
  37,113
  42,432
  48,118
  54,162
  60,556
  67,293
  74,369
  81,778
  89,520
  97,595
  106,006
  114,759
  123,861
  133,322
Maintenance CAPEX, $m
  0
  -62
  -98
  -152
  -227
  -330
  -466
  -640
  -859
  -1,128
  -1,452
  -1,834
  -2,277
  -2,784
  -3,355
  -3,992
  -4,694
  -5,461
  -6,290
  -7,182
  -8,134
  -9,145
  -10,213
  -11,339
  -12,520
  -13,756
  -15,047
  -16,394
  -17,796
  -19,255
  -20,772
New CAPEX, $m
  -622
  -369
  -537
  -754
  -1,026
  -1,356
  -1,745
  -2,191
  -2,690
  -3,235
  -3,819
  -4,433
  -5,069
  -5,716
  -6,369
  -7,019
  -7,663
  -8,296
  -8,915
  -9,519
  -10,110
  -10,687
  -11,253
  -11,811
  -12,363
  -12,913
  -13,465
  -14,022
  -14,589
  -15,170
  -15,767
Cash from investing activities, $m
  -397
  -431
  -635
  -906
  -1,253
  -1,686
  -2,211
  -2,831
  -3,549
  -4,363
  -5,271
  -6,267
  -7,346
  -8,500
  -9,724
  -11,011
  -12,357
  -13,757
  -15,205
  -16,701
  -18,244
  -19,832
  -21,466
  -23,150
  -24,883
  -26,669
  -28,512
  -30,416
  -32,385
  -34,425
  -36,539
Free cash flow, $m
  -111
  132
  234
  395
  639
  989
  1,477
  2,133
  2,986
  4,068
  5,405
  7,016
  8,931
  11,160
  13,714
  16,597
  19,812
  23,356
  27,227
  31,417
  35,918
  40,725
  45,827
  51,219
  56,896
  62,851
  69,083
  75,590
  82,373
  89,436
  96,783
Issuance/(repayment) of debt, $m
  125
  803
  1,169
  1,642
  2,235
  2,955
  3,803
  4,775
  5,862
  7,050
  8,323
  9,661
  11,045
  12,457
  13,879
  15,296
  16,699
  18,077
  19,426
  20,744
  22,031
  23,288
  24,522
  25,737
  26,940
  28,139
  29,342
  30,557
  31,793
  33,057
  34,359
Issuance/(repurchase) of shares, $m
  98
  334
  436
  537
  623
  671
  653
  537
  286
  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  
  214
  1,137
  1,605
  2,179
  2,858
  3,626
  4,456
  5,312
  6,148
  7,050
  8,323
  9,661
  11,045
  12,457
  13,879
  15,296
  16,699
  18,077
  19,426
  20,744
  22,031
  23,288
  24,522
  25,737
  26,940
  28,139
  29,342
  30,557
  31,793
  33,057
  34,359
Total cash flow (excl. dividends), $m
  103
  1,269
  1,840
  2,575
  3,497
  4,615
  5,933
  7,444
  9,134
  11,118
  13,728
  16,676
  19,976
  23,617
  27,592
  31,893
  36,510
  41,434
  46,653
  52,161
  57,949
  64,013
  70,349
  76,956
  83,835
  90,990
  98,424
  106,147
  114,166
  122,493
  131,141
Retained Cash Flow (-), $m
  -54
  -839
  -1,222
  -1,716
  -2,336
  -3,088
  -3,974
  -4,989
  -6,125
  -7,367
  -8,697
  -10,096
  -11,542
  -13,017
  -14,503
  -15,985
  -17,450
  -18,890
  -20,300
  -21,677
  -23,022
  -24,336
  -25,625
  -26,895
  -28,152
  -29,405
  -30,662
  -31,932
  -33,223
  -34,544
  -35,904
Prev. year cash balance distribution, $m
 
  97
  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
 
  528
  618
  859
  1,161
  1,528
  1,959
  2,455
  3,008
  3,751
  5,031
  6,581
  8,434
  10,600
  13,089
  15,909
  19,060
  22,543
  26,353
  30,483
  34,927
  39,677
  44,724
  50,062
  55,683
  61,585
  67,762
  74,215
  80,943
  87,949
  95,237
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  494
  537
  689
  854
  1,021
  1,181
  1,322
  1,433
  1,566
  1,820
  2,039
  2,211
  2,321
  2,362
  2,330
  2,232
  2,076
  1,875
  1,646
  1,403
  1,162
  935
  729
  552
  405
  288
  198
  132
  85
  53
Current shareholders' claim on cash, %
  100
  95.1
  91.3
  88.3
  86.1
  84.5
  83.4
  82.7
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5
  82.5

Frontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. As of December 31, 2015, the company operated a fleet of 88 vessels, including VLCC, Suezmax, LR2, and MR tankers. It is also involved in the charter, purchase, and sale of vessels. The company is based in Hamilton, Bermuda.

FINANCIAL RATIOS  of  Frontline (FRO)

Valuation Ratios
P/E Ratio 7.4
Price to Sales 1.2
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 3
Price to Free Cash Flow -2.6
Growth Rates
Sales Growth Rate 64.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21%
Cap. Spend. - 3 Yr. Gr. Rate 26.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.3
LT Debt to Equity 85.4%
Total Debt to Equity 93.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. 6.8%
Return On Total Capital 4.1%
Ret/ On T. Cap. - 3 Yr. Avg. 7.2%
Return On Equity 7.9%
Return On Equity - 3 Yr. Avg. 15.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 62.7%
Gross Margin - 3 Yr. Avg. 53.9%
EBITDA Margin 41.4%
EBITDA Margin - 3 Yr. Avg. 62.1%
Operating Margin 22.5%
Oper. Margin - 3 Yr. Avg. 44.3%
Pre-Tax Margin 15.6%
Pre-Tax Margin - 3 Yr. Avg. 42.7%
Net Profit Margin 15.5%
Net Profit Margin - 3 Yr. Avg. 37%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0.1%
Payout Ratio 141%

FRO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FRO stock intrinsic value calculation we used $754 million for the last fiscal year's total revenue generated by Frontline. The default revenue input number comes from 2016 income statement of Frontline. 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 FRO stock valuation model: a) initial revenue growth rate of 60% 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 6.9%, whose default value for FRO is calculated based on our internal credit rating of Frontline, 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 Frontline.
    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 FRO stock the variable cost ratio is equal to 39.7%.

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 FRO 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 3.9% for Frontline.

Corporate tax rate of 27% is the nominal tax rate for Frontline. 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 FRO 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 FRO are equal to 81.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Frontline 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 FRO is equal to 13.8%. 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 - $1500 million for Frontline - 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 1362.74 million for Frontline 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 Frontline at the current share price and the inputted number of shares is $7.0 billion.

RELATED COMPANIES Price Int.Val. Rating
GNRT Gener8 Maritim 4.36 4.18  sell
SFL Ship Finance I 13.50 3.00  str.sell
GOGL Golden Ocean G 8.65 2.71  str.sell
DHT DHT Holdings 3.75 7.79  str.buy
TNK Teekay Tankers 1.48 3.84  str.buy
NAT Nordic America 5.36 3.82  sell
ASC Ardmore Shippi 7.45 3.10  str.sell
TGP Teekay LNG Par 17.20 5.37  str.sell

COMPANY NEWS

▶ Inside Euronavs 2Q17 Results   [Aug-16-17 04:13PM  Market Realist]
▶ FRO - Notice of Annual General Meeting 2017   [Aug-11-17 11:09AM  GlobeNewswire]
▶ Week 30: Bunker Fuel Prices Rose Due to Higher Oil Prices   [Aug-04-17 11:35AM  Market Realist]
▶ Crude Tanker Index Is 41% Lower This Year   [08:12AM  Market Realist]
▶ Navios Maritime Midstream Partners Financial Health after Q2   [Aug-01-17 09:07AM  Market Realist]
▶ Frontline Ltd. Value Analysis (NYSE:FRO) : July 31, 2017   [Jul-31-17 06:08PM  Capital Cube]
▶ Analyzing Bunker Fuel Prices in Week 29   [Jul-26-17 01:35PM  Market Realist]
▶ Bunker Fuel and Crude Oil Prices in Week 27   [Jul-13-17 07:38AM  Market Realist]
▶ FRO - 2017 Annual General Meeting   [02:41AM  GlobeNewswire]
▶ ETFs with exposure to Frontline Ltd. : July 11, 2017   [Jul-11-17 02:33PM  Capital Cube]
▶ What the Rise in Floating Storage Means for Crude Tankers   [Jun-30-17 03:35PM  Market Realist]
▶ Why Crude Tanker Rates Matter   [02:05PM  Market Realist]
▶ [$$] This Shipping Magnate Is Calling a Bottom in the Oil Rout   [Jun-28-17 12:57AM  The Wall Street Journal]
▶ [$$] This Shipping Magnate Is Calling a Bottom in the Oil Rout   [Jun-27-17 10:27AM  The Wall Street Journal]
▶ ETFs with exposure to Frontline Ltd. : June 19, 2017   [Jun-19-17 03:22PM  Capital Cube]
▶ Is US Oil Demand Falling?   [Jun-02-17 09:06AM  Market Realist]
▶ Frontline (FRO) in Focus: Stock Moves 7% Higher   [Jun-01-17 08:55AM  Zacks]
▶ Today's Top Supply Chain and Logistics News From WSJ   [05:44AM  The Wall Street Journal]
▶ [$$] OPEC Oil Deal Sinks Tanker Industry   [May-31-17 12:08AM  The Wall Street Journal]
▶ FRO - Q1 2017 Presentation   [May-30-17 08:36AM  GlobeNewswire]
▶ Frontline beats 1Q profit forecasts   [08:12AM  Associated Press]
▶ Frontline Q1 profit misses forecast   [03:01AM  Reuters]
▶ FRO - First Quarter 2017 Results   [02:31AM  GlobeNewswire]
▶ Analysts Recommendations for Crude Tankers in Week 20   [May-25-17 01:35PM  Market Realist]
▶ Why DryShips Inc. Stock Growth Is No Sure Thing   [May-22-17 12:30PM  Motley Fool]
▶ ETFs with exposure to Frontline Ltd. : May 19, 2017   [May-19-17 01:54PM  Capital Cube]
▶ Chinas Imports: 12.5% Higher in First 4 Months of 2017   [May-15-17 10:39AM  Market Realist]
▶ Chinas Oil Imports Hit Record High, Benefiting Crude Tankers   [Apr-24-17 05:36PM  Market Realist]
▶ US Crude Takes Longest Route to Reach Destinations   [Apr-17-17 03:06PM  Market Realist]
▶ 3 Tempting High-Yield Dividend Stocks You Should Avoid   [Apr-13-17 07:06PM  Motley Fool]
▶ Frontline Ltd. Value Analysis (NYSE:FRO) : April 12, 2017   [Apr-12-17 01:24PM  Capital Cube]
▶ DryShips Inc. Caps Off Its Buying Binge With a Bang   [Apr-03-17 02:32PM  Motley Fool]
▶ [$$] Oil tankers: tidal recall   [12:06PM  Financial Times]
▶ Crude Oil Tanker Industry Benefits from Chinas Imports   [Mar-20-17 05:05PM  Market Realist]
▶ ETFs with exposure to Frontline Ltd. : March 6, 2017   [Mar-06-17 01:40PM  Capital Cube]
▶ [$$] Shipping Rivals Frontline, DHT to Talk Over Hostile Bid   [Mar-01-17 01:43PM  at The Wall Street Journal]
▶ [$$] SeaDrill slumps after Chapter 11 warning   [Feb-28-17 12:39PM  at Financial Times]
▶ Why DHT Holdings, Inc. Stock Advanced 13% in January   [Feb-09-17 02:43PM  at Motley Fool]
▶ [$$] Fredriksen vows to stay on to 'see through' shipping rescue   [Feb-05-17 05:27PM  at Financial Times]
▶ [$$] Frontline Makes Hostile Bid for Rival DHT   [03:08PM  at The Wall Street Journal]
▶ 10 Largest Oil Tanker Shipping Companies In The World   [Jan-27-17 03:45PM  at Insider Monkey]
▶ Is Frontline Ltd. (FRO) A Good Stock To Buy?   [Dec-20-16 02:34PM  at Insider Monkey]
Stock chart of FRO Financial statements of FRO
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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