Intrinsic value of Methanex - MEOH

Previous Close

$57.30

  Intrinsic Value

$501.44

stock screener

  Rating & Target

str. buy

+775%

Previous close

$57.30

 
Intrinsic value

$501.44

 
Up/down potential

+775%

 
Rating

str. buy

We calculate the intrinsic value of MEOH 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, %
  -10.24
  41.20
  37.58
  34.32
  31.39
  28.75
  26.38
  24.24
  22.31
  20.58
  19.02
  17.62
  16.36
  15.22
  14.20
  13.28
  12.45
  11.71
  11.04
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.11
  6.89
  6.71
Revenue, $m
  1,998
  2,821
  3,881
  5,214
  6,850
  8,820
  11,146
  13,847
  16,937
  20,423
  24,309
  28,593
  33,270
  38,335
  43,779
  49,594
  55,770
  62,300
  69,176
  76,393
  83,948
  91,840
  100,070
  108,641
  117,559
  126,831
  136,469
  146,484
  156,892
  167,709
  178,954
Variable operating expenses, $m
 
  505
  695
  933
  1,226
  1,579
  1,995
  2,479
  3,032
  3,656
  4,351
  5,118
  5,955
  6,862
  7,837
  8,877
  9,983
  11,152
  12,382
  13,674
  15,027
  16,439
  17,913
  19,447
  21,043
  22,703
  24,428
  26,221
  28,084
  30,020
  32,033
Fixed operating expenses, $m
 
  1,671
  1,713
  1,755
  1,799
  1,844
  1,890
  1,938
  1,986
  2,036
  2,087
  2,139
  2,192
  2,247
  2,303
  2,361
  2,420
  2,480
  2,542
  2,606
  2,671
  2,738
  2,806
  2,876
  2,948
  3,022
  3,097
  3,175
  3,254
  3,336
  3,419
Total operating expenses, $m
  1,970
  2,176
  2,408
  2,688
  3,025
  3,423
  3,885
  4,417
  5,018
  5,692
  6,438
  7,257
  8,147
  9,109
  10,140
  11,238
  12,403
  13,632
  14,924
  16,280
  17,698
  19,177
  20,719
  22,323
  23,991
  25,725
  27,525
  29,396
  31,338
  33,356
  35,452
Operating income, $m
  28
  645
  1,474
  2,525
  3,825
  5,397
  7,260
  9,431
  11,919
  14,732
  17,871
  21,336
  25,123
  29,226
  33,640
  38,356
  43,367
  48,668
  54,251
  60,113
  66,251
  72,663
  79,352
  86,318
  93,568
  101,107
  108,944
  117,089
  125,554
  134,353
  143,502
EBITDA, $m
  256
  967
  1,916
  3,118
  4,604
  6,401
  8,529
  11,007
  13,848
  17,057
  20,638
  24,591
  28,910
  33,590
  38,624
  44,002
  49,716
  55,760
  62,126
  68,810
  75,807
  83,118
  90,744
  98,686
  106,951
  115,545
  124,479
  133,765
  143,415
  153,446
  163,874
Interest expense (income), $m
  83
  81
  146
  229
  334
  463
  617
  800
  1,013
  1,255
  1,529
  1,835
  2,172
  2,539
  2,937
  3,365
  3,822
  4,308
  4,821
  5,361
  5,929
  6,522
  7,143
  7,790
  8,463
  9,164
  9,893
  10,650
  11,438
  12,256
  13,106
Earnings before tax, $m
  -38
  564
  1,328
  2,296
  3,491
  4,934
  6,643
  8,631
  10,907
  13,476
  16,342
  19,501
  22,951
  26,687
  30,703
  34,991
  39,545
  44,360
  49,430
  54,752
  60,322
  66,141
  72,209
  78,528
  85,104
  91,942
  99,051
  106,438
  114,116
  122,098
  130,396
Tax expense, $m
  -10
  152
  359
  620
  942
  1,332
  1,794
  2,330
  2,945
  3,639
  4,412
  5,265
  6,197
  7,206
  8,290
  9,448
  10,677
  11,977
  13,346
  14,783
  16,287
  17,858
  19,496
  21,203
  22,978
  24,824
  26,744
  28,738
  30,811
  32,966
  35,207
Net income, $m
  -13
  412
  970
  1,676
  2,548
  3,602
  4,849
  6,300
  7,962
  9,838
  11,929
  14,236
  16,754
  19,482
  22,413
  25,543
  28,868
  32,383
  36,084
  39,969
  44,035
  48,283
  52,712
  57,326
  62,126
  67,118
  72,307
  77,700
  83,305
  89,131
  95,189

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  224
  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
  4,557
  6,120
  8,419
  11,309
  14,859
  19,131
  24,177
  30,037
  36,740
  44,302
  52,731
  62,023
  72,170
  83,157
  94,966
  107,579
  120,976
  135,140
  150,056
  165,712
  182,101
  199,220
  217,072
  235,664
  255,008
  275,122
  296,028
  317,753
  340,330
  363,794
  388,187
Adjusted assets (=assets-cash), $m
  4,333
  6,120
  8,419
  11,309
  14,859
  19,131
  24,177
  30,037
  36,740
  44,302
  52,731
  62,023
  72,170
  83,157
  94,966
  107,579
  120,976
  135,140
  150,056
  165,712
  182,101
  199,220
  217,072
  235,664
  255,008
  275,122
  296,028
  317,753
  340,330
  363,794
  388,187
Revenue / Adjusted assets
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
Average production assets, $m
  3,139
  4,432
  6,098
  8,190
  10,761
  13,855
  17,510
  21,754
  26,608
  32,085
  38,189
  44,919
  52,268
  60,225
  68,778
  77,912
  87,615
  97,873
  108,675
  120,013
  131,883
  144,281
  157,210
  170,675
  184,685
  199,252
  214,393
  230,127
  246,477
  263,471
  281,137
Working capital, $m
  419
  353
  485
  652
  856
  1,102
  1,393
  1,731
  2,117
  2,553
  3,039
  3,574
  4,159
  4,792
  5,472
  6,199
  6,971
  7,787
  8,647
  9,549
  10,494
  11,480
  12,509
  13,580
  14,695
  15,854
  17,059
  18,311
  19,612
  20,964
  22,369
Total debt, $m
  1,556
  2,702
  4,245
  6,184
  8,566
  11,433
  14,819
  18,751
  23,249
  28,323
  33,978
  40,213
  47,022
  54,394
  62,318
  70,782
  79,771
  89,275
  99,283
  109,789
  120,786
  132,273
  144,251
  156,727
  169,707
  183,203
  197,231
  211,808
  226,957
  242,702
  259,069
Total liabilities, $m
  2,960
  4,106
  5,649
  7,588
  9,970
  12,837
  16,223
  20,155
  24,653
  29,727
  35,382
  41,617
  48,426
  55,798
  63,722
  72,186
  81,175
  90,679
  100,687
  111,193
  122,190
  133,677
  145,655
  158,131
  171,111
  184,607
  198,635
  213,212
  228,361
  244,106
  260,473
Total equity, $m
  1,597
  2,013
  2,770
  3,721
  4,889
  6,294
  7,954
  9,882
  12,087
  14,575
  17,348
  20,405
  23,744
  27,359
  31,244
  35,394
  39,801
  44,461
  49,368
  54,519
  59,911
  65,543
  71,417
  77,533
  83,898
  90,515
  97,393
  104,541
  111,969
  119,688
  127,713
Total liabilities and equity, $m
  4,557
  6,119
  8,419
  11,309
  14,859
  19,131
  24,177
  30,037
  36,740
  44,302
  52,730
  62,022
  72,170
  83,157
  94,966
  107,580
  120,976
  135,140
  150,055
  165,712
  182,101
  199,220
  217,072
  235,664
  255,009
  275,122
  296,028
  317,753
  340,330
  363,794
  388,186
Debt-to-equity ratio
  0.974
  1.340
  1.530
  1.660
  1.750
  1.820
  1.860
  1.900
  1.920
  1.940
  1.960
  1.970
  1.980
  1.990
  1.990
  2.000
  2.000
  2.010
  2.010
  2.010
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
  2.030
  2.030
  2.030
  2.030
  2.030
Adjusted equity ratio
  0.317
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -13
  412
  970
  1,676
  2,548
  3,602
  4,849
  6,300
  7,962
  9,838
  11,929
  14,236
  16,754
  19,482
  22,413
  25,543
  28,868
  32,383
  36,084
  39,969
  44,035
  48,283
  52,712
  57,326
  62,126
  67,118
  72,307
  77,700
  83,305
  89,131
  95,189
Depreciation, amort., depletion, $m
  228
  321
  442
  594
  780
  1,004
  1,269
  1,576
  1,928
  2,325
  2,767
  3,255
  3,788
  4,364
  4,984
  5,646
  6,349
  7,092
  7,875
  8,697
  9,557
  10,455
  11,392
  12,368
  13,383
  14,439
  15,536
  16,676
  17,861
  19,092
  20,372
Funds from operations, $m
  204
  733
  1,411
  2,269
  3,328
  4,606
  6,118
  7,877
  9,890
  12,163
  14,697
  17,491
  20,542
  23,846
  27,397
  31,189
  35,217
  39,475
  43,959
  48,665
  53,592
  58,738
  64,104
  69,694
  75,509
  81,557
  87,843
  94,376
  101,166
  108,223
  115,562
Change in working capital, $m
  -46
  103
  133
  167
  205
  246
  291
  338
  386
  436
  486
  535
  585
  633
  681
  727
  772
  816
  860
  902
  944
  987
  1,029
  1,071
  1,115
  1,159
  1,205
  1,252
  1,301
  1,352
  1,406
Cash from operations, $m
  250
  630
  1,279
  2,103
  3,123
  4,360
  5,827
  7,539
  9,504
  11,727
  14,211
  16,955
  19,957
  23,213
  26,716
  30,462
  34,445
  38,659
  43,099
  47,763
  52,647
  57,751
  63,076
  68,622
  74,394
  80,397
  86,638
  93,124
  99,865
  106,871
  114,156
Maintenance CAPEX, $m
  0
  -227
  -321
  -442
  -594
  -780
  -1,004
  -1,269
  -1,576
  -1,928
  -2,325
  -2,767
  -3,255
  -3,788
  -4,364
  -4,984
  -5,646
  -6,349
  -7,092
  -7,875
  -8,697
  -9,557
  -10,455
  -11,392
  -12,368
  -13,383
  -14,439
  -15,536
  -16,676
  -17,861
  -19,092
New CAPEX, $m
  -100
  -1,294
  -1,666
  -2,093
  -2,571
  -3,094
  -3,654
  -4,244
  -4,854
  -5,477
  -6,104
  -6,730
  -7,349
  -7,957
  -8,553
  -9,135
  -9,703
  -10,258
  -10,802
  -11,339
  -11,869
  -12,398
  -12,929
  -13,465
  -14,010
  -14,567
  -15,141
  -15,734
  -16,351
  -16,993
  -17,666
Cash from investing activities, $m
  -88
  -1,521
  -1,987
  -2,535
  -3,165
  -3,874
  -4,658
  -5,513
  -6,430
  -7,405
  -8,429
  -9,497
  -10,604
  -11,745
  -12,917
  -14,119
  -15,349
  -16,607
  -17,894
  -19,214
  -20,566
  -21,955
  -23,384
  -24,857
  -26,378
  -27,950
  -29,580
  -31,270
  -33,027
  -34,854
  -36,758
Free cash flow, $m
  162
  -891
  -708
  -432
  -41
  486
  1,169
  2,026
  3,073
  4,322
  5,782
  7,458
  9,353
  11,468
  13,799
  16,344
  19,097
  22,052
  25,205
  28,550
  32,081
  35,796
  39,692
  43,765
  48,017
  52,447
  57,059
  61,854
  66,838
  72,017
  77,398
Issuance/(repayment) of debt, $m
  12
  1,200
  1,543
  1,939
  2,382
  2,867
  3,386
  3,932
  4,497
  5,074
  5,655
  6,235
  6,809
  7,372
  7,924
  8,463
  8,989
  9,504
  10,008
  10,505
  10,997
  11,487
  11,979
  12,475
  12,980
  13,496
  14,028
  14,578
  15,149
  15,744
  16,367
Issuance/(repurchase) of shares, $m
  2
  174
  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  
  -94
  1,374
  1,543
  1,939
  2,382
  2,867
  3,386
  3,932
  4,497
  5,074
  5,655
  6,235
  6,809
  7,372
  7,924
  8,463
  8,989
  9,504
  10,008
  10,505
  10,997
  11,487
  11,979
  12,475
  12,980
  13,496
  14,028
  14,578
  15,149
  15,744
  16,367
Total cash flow (excl. dividends), $m
  68
  484
  835
  1,507
  2,341
  3,352
  4,555
  5,958
  7,571
  9,396
  11,437
  13,693
  16,162
  18,840
  21,723
  24,807
  28,086
  31,556
  35,213
  39,055
  43,078
  47,283
  51,670
  56,240
  60,997
  65,944
  71,087
  76,432
  81,987
  87,762
  93,765
Retained Cash Flow (-), $m
  123
  -586
  -757
  -951
  -1,168
  -1,406
  -1,660
  -1,928
  -2,205
  -2,488
  -2,773
  -3,057
  -3,338
  -3,615
  -3,885
  -4,150
  -4,408
  -4,660
  -4,907
  -5,151
  -5,392
  -5,632
  -5,873
  -6,117
  -6,364
  -6,617
  -6,878
  -7,148
  -7,428
  -7,720
  -8,025
Prev. year cash balance distribution, $m
 
  170
  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
 
  68
  79
  556
  1,173
  1,947
  2,895
  4,030
  5,366
  6,908
  8,664
  10,636
  12,824
  15,225
  17,838
  20,657
  23,678
  26,896
  30,306
  33,904
  37,686
  41,651
  45,797
  50,124
  54,633
  59,326
  64,208
  69,284
  74,559
  80,042
  85,740
Discount rate, %
 
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
 
  63
  68
  443
  852
  1,280
  1,708
  2,115
  2,479
  2,781
  3,005
  3,140
  3,183
  3,134
  3,001
  2,798
  2,542
  2,249
  1,939
  1,628
  1,331
  1,060
  821
  618
  452
  321
  221
  147
  95
  59
  36
Current shareholders' claim on cash, %
  100
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1
  96.1

Methanex Corp is a Canada-based producer and supplier of methanol to a range of international markets. The Company operates production sites in Canada, Chile, Egypt, New Zealand, the United States, as well as Trinidad and Tobago. Its global operations are supported by a global supply chain of terminals, storage facilities and a fleet of methanol ocean tankers. The Company's subsidiary, Waterfront Shipping Company Limited, operates its fleet, which is made up of over 20 vessels ranging from 3,000 to 50,000 deadweight tons of capacity. It has over three production facilities in New Zealand that supply methanol primarily to customers in Asia Pacific. The Company operates over two plants in Trinidad, Titan and Atlas, which supply methanol to markets in North America, Europe, Asia Pacific and South America. Its joint venture facility in Egypt supplies methanol to markets in Europe and Asia Pacific. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America.

FINANCIAL RATIOS  of  Methanex (MEOH)

Valuation Ratios
P/E Ratio -395.9
Price to Sales 2.6
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 20.6
Price to Free Cash Flow 34.3
Growth Rates
Sales Growth Rate -10.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -76.5%
Cap. Spend. - 3 Yr. Gr. Rate -29.6%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 94.1%
Total Debt to Equity 97.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital -0.4%
Ret/ On T. Cap. - 3 Yr. Avg. 6.6%
Return On Equity -0.8%
Return On Equity - 3 Yr. Avg. 12.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 25.3%
Gross Margin - 3 Yr. Avg. 28.4%
EBITDA Margin 13.7%
EBITDA Margin - 3 Yr. Avg. 20.8%
Operating Margin 1.4%
Oper. Margin - 3 Yr. Avg. 11.2%
Pre-Tax Margin -1.9%
Pre-Tax Margin - 3 Yr. Avg. 9.4%
Net Profit Margin -0.7%
Net Profit Margin - 3 Yr. Avg. 7.5%
Effective Tax Rate 26.3%
Eff/ Tax Rate - 3 Yr. Avg. 18.3%
Payout Ratio -761.5%

MEOH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MEOH stock intrinsic value calculation we used $1998 million for the last fiscal year's total revenue generated by Methanex. The default revenue input number comes from 2016 income statement of Methanex. 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 MEOH stock valuation model: a) initial revenue growth rate of 41.2% 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 7.2%, whose default value for MEOH is calculated based on our internal credit rating of Methanex, 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 Methanex.
    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 MEOH stock the variable cost ratio is equal to 17.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1630 million in the base year in the intrinsic value calculation for MEOH 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 5.4% for Methanex.

Corporate tax rate of 27% is the nominal tax rate for Methanex. 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 MEOH 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 MEOH are equal to 157.1%.

Life of production assets of 13.8 years is the average useful life of capital assets used in Methanex 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 MEOH is equal to 12.5%. 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 - $1597 million for Methanex - 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 83.567 million for Methanex 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 Methanex at the current share price and the inputted number of shares is $4.8 billion.

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COMPANY NEWS

▶ February Top Materials Dividend Stock   [01:02PM  Simply Wall St.]
▶ Methanex Corporation to Host Earnings Call   [Feb-01-18 09:30AM  ACCESSWIRE]
▶ Methanex posts 4Q profit   [Jan-31-18 06:18PM  Associated Press]
▶ Bernard Horn Comments on Methanex   [Jan-17-18 12:49PM  GuruFocus.com]
▶ Scoop Up These 4 Chemical Stocks for Stellar Returns   [Jan-11-18 02:10PM  InvestorPlace]
▶ Methanex Earns Relative Strength Rating Upgrade; Hits Key Benchmark   [Dec-13-17 03:00AM  Investor's Business Daily]
▶ Methanex Shows Rising Relative Strength; Still Shy Of Key Benchmark   [Dec-04-17 03:00AM  Investor's Business Daily]
▶ Should You Buy Methanex Corporation (TSX:MX) Now?   [Nov-18-17 03:44PM  Simply Wall St.]
▶ Methanex Corporation Notice of Cash Dividend   [Nov-15-17 02:34PM  GlobeNewswire]
▶ Stocks With Rising Relative Price Strength: Methanex   [Nov-10-17 03:00AM  Investor's Business Daily]
▶ Stocks With Rising Relative Strength: Methanex   [Nov-02-17 03:00AM  Investor's Business Daily]
▶ Methanex Shows Rising Relative Strength; Still Shy Of Key Threshold   [Oct-31-17 03:00AM  Investor's Business Daily]
▶ ETFs with exposure to Methanex Corp. : October 30, 2017   [Oct-30-17 12:03PM  Capital Cube]
▶ Methanex posts 3Q profit   [06:35AM  Associated Press]
▶ Methanex Reports Third Quarter 2017 Earnings   [Oct-25-17 05:24PM  GlobeNewswire]
▶ ETFs with exposure to Methanex Corp. : August 11, 2017   [Aug-11-17 05:58PM  Capital Cube]
▶ Methanex posts 2Q profit   [Jul-27-17 11:46PM  Associated Press]
Financial statements of MEOH
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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