Intrinsic value of Newmont Mining - NEM

Previous Close

$37.84

  Intrinsic Value

$13.77

stock screener

  Rating & Target

str. sell

-64%

  Value-price divergence*

-79%

Previous close

$37.84

 
Intrinsic value

$13.77

 
Up/down potential

-64%

 
Rating

str. sell

 
Value-price divergence*

-79%

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

We calculate the intrinsic value of NEM 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 20.3

 

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, %
  10.29
  12.30
  11.57
  10.91
  10.32
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
  6.86
  6.67
  6.50
  6.35
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
Revenue, $m
  6,711
  7,536
  8,408
  9,326
  10,289
  11,296
  12,348
  13,444
  14,586
  15,773
  17,008
  18,291
  19,625
  21,011
  22,451
  23,949
  25,506
  27,126
  28,813
  30,569
  32,399
  34,307
  36,296
  38,372
  40,538
  42,801
  45,166
  47,637
  50,221
  52,924
  55,752
Variable operating expenses, $m
 
  7,114
  7,938
  8,804
  9,712
  10,663
  11,656
  12,691
  13,769
  14,890
  16,055
  17,267
  18,526
  19,834
  21,194
  22,607
  24,078
  25,607
  27,199
  28,857
  30,585
  32,385
  34,263
  36,223
  38,268
  40,405
  42,637
  44,969
  47,409
  49,960
  52,630
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
  6,776
  7,114
  7,938
  8,804
  9,712
  10,663
  11,656
  12,691
  13,769
  14,890
  16,055
  17,267
  18,526
  19,834
  21,194
  22,607
  24,078
  25,607
  27,199
  28,857
  30,585
  32,385
  34,263
  36,223
  38,268
  40,405
  42,637
  44,969
  47,409
  49,960
  52,630
Operating income, $m
  -65
  422
  471
  522
  576
  633
  691
  753
  817
  883
  952
  1,024
  1,099
  1,177
  1,257
  1,341
  1,428
  1,519
  1,614
  1,712
  1,814
  1,921
  2,033
  2,149
  2,270
  2,397
  2,529
  2,668
  2,812
  2,964
  3,122
EBITDA, $m
  1,155
  1,796
  2,004
  2,223
  2,452
  2,692
  2,943
  3,204
  3,477
  3,760
  4,054
  4,360
  4,678
  5,008
  5,351
  5,708
  6,079
  6,466
  6,868
  7,286
  7,722
  8,177
  8,651
  9,146
  9,662
  10,202
  10,765
  11,354
  11,970
  12,615
  13,289
Interest expense (income), $m
  0
  142
  184
  229
  275
  324
  375
  429
  485
  543
  603
  666
  731
  799
  870
  943
  1,019
  1,098
  1,181
  1,267
  1,356
  1,449
  1,546
  1,648
  1,753
  1,863
  1,979
  2,099
  2,225
  2,356
  2,494
Earnings before tax, $m
  -214
  280
  287
  294
  301
  308
  316
  324
  332
  340
  349
  358
  368
  377
  387
  398
  409
  421
  433
  445
  458
  472
  486
  501
  517
  533
  551
  569
  588
  608
  629
Tax expense, $m
  563
  76
  77
  79
  81
  83
  85
  87
  90
  92
  94
  97
  99
  102
  105
  107
  110
  114
  117
  120
  124
  127
  131
  135
  140
  144
  149
  154
  159
  164
  170
Net income, $m
  -627
  205
  209
  214
  220
  225
  231
  236
  242
  249
  255
  261
  268
  275
  283
  291
  299
  307
  316
  325
  334
  345
  355
  366
  377
  389
  402
  415
  429
  444
  459

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,812
  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
  21,031
  20,479
  22,849
  25,342
  27,958
  30,695
  33,553
  36,532
  39,635
  42,862
  46,217
  49,704
  53,328
  57,094
  61,008
  65,078
  69,310
  73,713
  78,296
  83,068
  88,041
  93,224
  98,630
  104,271
  110,159
  116,308
  122,733
  129,449
  136,471
  143,816
  151,501
Adjusted assets (=assets-cash), $m
  18,219
  20,479
  22,849
  25,342
  27,958
  30,695
  33,553
  36,532
  39,635
  42,862
  46,217
  49,704
  53,328
  57,094
  61,008
  65,078
  69,310
  73,713
  78,296
  83,068
  88,041
  93,224
  98,630
  104,271
  110,159
  116,308
  122,733
  129,449
  136,471
  143,816
  151,501
Revenue / Adjusted assets
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
  0.368
Average production assets, $m
  6,243
  7,009
  7,820
  8,673
  9,568
  10,505
  11,483
  12,503
  13,565
  14,669
  15,817
  17,011
  18,251
  19,540
  20,879
  22,272
  23,721
  25,227
  26,796
  28,429
  30,131
  31,905
  33,755
  35,686
  37,701
  39,805
  42,004
  44,303
  46,706
  49,219
  51,850
Working capital, $m
  2,927
  761
  849
  942
  1,039
  1,141
  1,247
  1,358
  1,473
  1,593
  1,718
  1,847
  1,982
  2,122
  2,268
  2,419
  2,576
  2,740
  2,910
  3,087
  3,272
  3,465
  3,666
  3,876
  4,094
  4,323
  4,562
  4,811
  5,072
  5,345
  5,631
Total debt, $m
  4,615
  5,262
  6,529
  7,863
  9,263
  10,727
  12,256
  13,850
  15,510
  17,236
  19,031
  20,897
  22,836
  24,850
  26,944
  29,122
  31,386
  33,741
  36,193
  38,747
  41,407
  44,180
  47,072
  50,090
  53,240
  56,530
  59,967
  63,560
  67,317
  71,246
  75,358
Total liabilities, $m
  10,310
  10,957
  12,224
  13,558
  14,958
  16,422
  17,951
  19,545
  21,205
  22,931
  24,726
  26,592
  28,531
  30,545
  32,639
  34,817
  37,081
  39,436
  41,888
  44,442
  47,102
  49,875
  52,767
  55,785
  58,935
  62,225
  65,662
  69,255
  73,012
  76,941
  81,053
Total equity, $m
  10,721
  9,523
  10,625
  11,784
  13,001
  14,273
  15,602
  16,988
  18,430
  19,931
  21,491
  23,113
  24,798
  26,549
  28,369
  30,261
  32,229
  34,276
  36,407
  38,627
  40,939
  43,349
  45,863
  48,486
  51,224
  54,083
  57,071
  60,194
  63,459
  66,874
  70,448
Total liabilities and equity, $m
  21,031
  20,480
  22,849
  25,342
  27,959
  30,695
  33,553
  36,533
  39,635
  42,862
  46,217
  49,705
  53,329
  57,094
  61,008
  65,078
  69,310
  73,712
  78,295
  83,069
  88,041
  93,224
  98,630
  104,271
  110,159
  116,308
  122,733
  129,449
  136,471
  143,815
  151,501
Debt-to-equity ratio
  0.430
  0.550
  0.610
  0.670
  0.710
  0.750
  0.790
  0.820
  0.840
  0.860
  0.890
  0.900
  0.920
  0.940
  0.950
  0.960
  0.970
  0.980
  0.990
  1.000
  1.010
  1.020
  1.030
  1.030
  1.040
  1.050
  1.050
  1.060
  1.060
  1.070
  1.070
Adjusted equity ratio
  0.434
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -627
  205
  209
  214
  220
  225
  231
  236
  242
  249
  255
  261
  268
  275
  283
  291
  299
  307
  316
  325
  334
  345
  355
  366
  377
  389
  402
  415
  429
  444
  459
Depreciation, amort., depletion, $m
  1,220
  1,374
  1,533
  1,701
  1,876
  2,060
  2,252
  2,452
  2,660
  2,876
  3,101
  3,335
  3,579
  3,831
  4,094
  4,367
  4,651
  4,947
  5,254
  5,574
  5,908
  6,256
  6,619
  6,997
  7,392
  7,805
  8,236
  8,687
  9,158
  9,651
  10,167
Funds from operations, $m
  1,783
  1,579
  1,743
  1,915
  2,096
  2,285
  2,482
  2,688
  2,902
  3,125
  3,356
  3,597
  3,847
  4,107
  4,377
  4,658
  4,950
  5,254
  5,570
  5,899
  6,243
  6,600
  6,974
  7,363
  7,770
  8,194
  8,638
  9,102
  9,587
  10,094
  10,625
Change in working capital, $m
  -490
  83
  88
  93
  97
  102
  106
  111
  115
  120
  125
  130
  135
  140
  145
  151
  157
  164
  170
  177
  185
  193
  201
  210
  219
  229
  239
  250
  261
  273
  286
Cash from operations, $m
  2,273
  1,496
  1,655
  1,822
  1,999
  2,183
  2,376
  2,577
  2,787
  3,005
  3,232
  3,467
  3,712
  3,967
  4,231
  4,506
  4,792
  5,090
  5,400
  5,722
  6,058
  6,408
  6,773
  7,153
  7,551
  7,966
  8,399
  8,852
  9,326
  9,821
  10,340
Maintenance CAPEX, $m
  0
  -1,224
  -1,374
  -1,533
  -1,701
  -1,876
  -2,060
  -2,252
  -2,452
  -2,660
  -2,876
  -3,101
  -3,335
  -3,579
  -3,831
  -4,094
  -4,367
  -4,651
  -4,947
  -5,254
  -5,574
  -5,908
  -6,256
  -6,619
  -6,997
  -7,392
  -7,805
  -8,236
  -8,687
  -9,158
  -9,651
New CAPEX, $m
  -1,133
  -766
  -811
  -853
  -895
  -937
  -978
  -1,020
  -1,062
  -1,104
  -1,148
  -1,193
  -1,240
  -1,289
  -1,340
  -1,393
  -1,448
  -1,507
  -1,568
  -1,633
  -1,702
  -1,774
  -1,850
  -1,930
  -2,015
  -2,105
  -2,199
  -2,298
  -2,403
  -2,514
  -2,630
Cash from investing activities, $m
  -80
  -1,990
  -2,185
  -2,386
  -2,596
  -2,813
  -3,038
  -3,272
  -3,514
  -3,764
  -4,024
  -4,294
  -4,575
  -4,868
  -5,171
  -5,487
  -5,815
  -6,158
  -6,515
  -6,887
  -7,276
  -7,682
  -8,106
  -8,549
  -9,012
  -9,497
  -10,004
  -10,534
  -11,090
  -11,672
  -12,281
Free cash flow, $m
  2,193
  -495
  -531
  -564
  -597
  -630
  -662
  -694
  -726
  -759
  -793
  -828
  -863
  -901
  -940
  -980
  -1,023
  -1,068
  -1,116
  -1,166
  -1,218
  -1,274
  -1,333
  -1,396
  -1,461
  -1,531
  -1,604
  -1,682
  -1,764
  -1,850
  -1,941
Issuance/(repayment) of debt, $m
  -1,312
  1,213
  1,268
  1,334
  1,399
  1,464
  1,529
  1,594
  1,660
  1,727
  1,795
  1,866
  1,939
  2,015
  2,094
  2,177
  2,264
  2,356
  2,452
  2,553
  2,660
  2,773
  2,892
  3,018
  3,150
  3,290
  3,437
  3,593
  3,757
  3,930
  4,112
Issuance/(repurchase) of shares, $m
  0
  843
  893
  945
  997
  1,048
  1,098
  1,149
  1,200
  1,252
  1,305
  1,360
  1,417
  1,476
  1,537
  1,602
  1,669
  1,740
  1,815
  1,894
  1,978
  2,066
  2,159
  2,257
  2,361
  2,470
  2,586
  2,707
  2,836
  2,972
  3,115
Cash from financing (excl. dividends), $m  
  -1,734
  2,056
  2,161
  2,279
  2,396
  2,512
  2,627
  2,743
  2,860
  2,979
  3,100
  3,226
  3,356
  3,491
  3,631
  3,779
  3,933
  4,096
  4,267
  4,447
  4,638
  4,839
  5,051
  5,275
  5,511
  5,760
  6,023
  6,300
  6,593
  6,902
  7,227
Total cash flow (excl. dividends), $m
  460
  1,561
  1,629
  1,715
  1,799
  1,882
  1,965
  2,049
  2,133
  2,219
  2,307
  2,398
  2,492
  2,590
  2,692
  2,798
  2,910
  3,028
  3,152
  3,282
  3,420
  3,565
  3,718
  3,879
  4,049
  4,229
  4,418
  4,618
  4,829
  5,051
  5,285
Retained Cash Flow (-), $m
  629
  -1,048
  -1,102
  -1,159
  -1,216
  -1,273
  -1,329
  -1,385
  -1,443
  -1,501
  -1,560
  -1,622
  -1,685
  -1,751
  -1,820
  -1,892
  -1,968
  -2,047
  -2,131
  -2,219
  -2,312
  -2,410
  -2,514
  -2,623
  -2,738
  -2,859
  -2,988
  -3,123
  -3,265
  -3,415
  -3,574
Prev. year cash balance distribution, $m
 
  2,246
  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
 
  2,759
  528
  555
  583
  610
  636
  663
  691
  719
  747
  777
  807
  839
  872
  906
  942
  981
  1,021
  1,063
  1,107
  1,154
  1,204
  1,256
  1,311
  1,369
  1,431
  1,496
  1,564
  1,636
  1,711
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
 
  2,645
  483
  483
  480
  472
  462
  448
  432
  413
  392
  369
  344
  319
  293
  266
  239
  213
  188
  164
  141
  119
  100
  82
  67
  53
  42
  32
  24
  18
  13
Current shareholders' claim on cash, %
  100
  95.0
  90.5
  86.4
  82.7
  79.4
  76.3
  73.4
  70.8
  68.3
  66.0
  63.9
  61.9
  60.0
  58.2
  56.5
  54.9
  53.4
  51.9
  50.6
  49.2
  47.9
  46.7
  45.5
  44.4
  43.3
  42.2
  41.2
  40.2
  39.2
  38.3

Newmont Mining Corporation is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company's segments include North America, South America, Asia Pacific and Africa. The Company's North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company's South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company's Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company's Africa segment consists primarily of Ahafo and Akyem in Ghana. As of December 31, 2016, it had gold reserves of 68.5 million ounces and an aggregate land position of approximately 23,000 square miles (59,000 square kilometers).

FINANCIAL RATIOS  of  Newmont Mining (NEM)

Valuation Ratios
P/E Ratio -32
Price to Sales 3
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow 17.6
Growth Rates
Sales Growth Rate 10.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -13.6%
Cap. Spend. - 3 Yr. Gr. Rate -9.8%
Financial Strength
Quick Ratio 5
Current Ratio 0.5
LT Debt to Equity 37.8%
Total Debt to Equity 43%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.7%
Ret/ On Assets - 3 Yr. Avg. 0.1%
Return On Total Capital -3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.2%
Return On Equity -5.7%
Return On Equity - 3 Yr. Avg. 0.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 43.8%
Gross Margin - 3 Yr. Avg. 42.5%
EBITDA Margin 15%
EBITDA Margin - 3 Yr. Avg. 22%
Operating Margin -1%
Oper. Margin - 3 Yr. Avg. 6.3%
Pre-Tax Margin -3.2%
Pre-Tax Margin - 3 Yr. Avg. 4.6%
Net Profit Margin -9.3%
Net Profit Margin - 3 Yr. Avg. 0.6%
Effective Tax Rate -263.1%
Eff/ Tax Rate - 3 Yr. Avg. -35.2%
Payout Ratio -10.7%

NEM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NEM stock intrinsic value calculation we used $6711 million for the last fiscal year's total revenue generated by Newmont Mining. The default revenue input number comes from 2016 income statement of Newmont Mining. 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 NEM stock valuation model: a) initial revenue growth rate of 12.3% 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 NEM is calculated based on our internal credit rating of Newmont Mining, 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 Newmont Mining.
    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 NEM stock the variable cost ratio is equal to 94.4%.

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 NEM 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 Newmont Mining.

Corporate tax rate of 27% is the nominal tax rate for Newmont Mining. 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 NEM 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 NEM are equal to 93%.

Life of production assets of 5.1 years is the average useful life of capital assets used in Newmont Mining 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 NEM is equal to 10.1%. 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 - $10721 million for Newmont Mining - 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 535.82 million for Newmont Mining 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 Newmont Mining at the current share price and the inputted number of shares is $20.3 billion.

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COMPANY NEWS

▶ How Mining Stocks Are Reacting as of October 17   [Oct-19-17 12:18PM  Market Realist]
▶ Upgrade Well Timed for Shiny Newmont Mining   [Oct-14-17 09:00AM  TheStreet.com]
▶ Upgrade Well Timed for Shiny Newmont Mining   [Oct-13-17 02:33PM  TheStreet.com]
▶ A Brief Technical Analysis of the Miners in October 2017   [Oct-11-17 03:03PM  Market Realist]
▶ Analyzing Mining Stocks Moving Averages   [Oct-10-17 04:58PM  Market Realist]
▶ Gain Exposure to Gold Through Newcrest Mining   [Oct-09-17 03:40PM  GuruFocus.com]
▶ U.S. Stocks Quiet; China Issues Pop As Holidays End   [11:56AM  Investor's Business Daily]
▶ Compelling Reasons to Remain Bullish on Gold   [Oct-06-17 01:40PM  GuruFocus.com]
▶ How the Dollar Affected Gold on October 4   [07:41AM  Market Realist]
▶ How Mining Stocks Correlate to Gold   [Oct-05-17 03:57PM  Market Realist]
▶ Chart in Focus: Correlation of Mining Stocks with Gold   [Oct-04-17 07:45AM  Market Realist]
▶ Stocks Generating Improved Relative Strength: Newmont Mining   [03:00AM  Investor's Business Daily]
▶ How Mining Stocks Performed in September 2017   [Oct-03-17 04:06PM  Market Realist]
▶ The Apocalypse Stock Portfolio   [Oct-02-17 06:00AM  Investopedia]
▶ Analyzing Mining Stocks Technicals   [Sep-29-17 06:03PM  Market Realist]
▶ Newmont Announces Revised Timing for Q3 2017 Earnings Call   [Sep-28-17 04:05PM  Business Wire]
▶ ETF Flopper: Miners Tumble as Gold Sinks   [Sep-26-17 05:26PM  Barrons.com]
▶ Which Indicators Are Playing Precious Metals?   [01:32PM  Market Realist]
▶ Analyzing Miners Technicals in September 2017   [Sep-25-17 05:37PM  Market Realist]
▶ Factors Likely to Hinder Gold Industry Growth   [Sep-22-17 04:52PM  Zacks]
▶ Despite Bitcoin And Trump, Gold Regains Lost Luster   [Sep-21-17 03:52PM  Investor's Business Daily]
▶ A Correlation Study of the Major Mining Stocks   [Sep-20-17 08:08AM  Market Realist]
▶ Do Newmont Minings Latest Ratings Show Analyst Optimism?   [Sep-18-17 10:39AM  Market Realist]
▶ Mario Gabelli Comments on Newmont Mining Corp   [Sep-15-17 01:47PM  GuruFocus.com]
▶ 10 Ways To Invest In Gold From 7 Experts   [Sep-13-17 12:57PM  Forbes]
▶ Gold miners experience post Irma sell-off   [Sep-11-17 07:52PM  Investing.com]
▶ Is It Too Late To Buy Newmont Mining Corporation (NEM)?   [Sep-09-17 10:38AM  Simply Wall St.]
▶ Newmont Mining Earns IBD Rating Upgrade   [Sep-08-17 03:00AM  Investor's Business Daily]
▶ Newmont Announces Third Quarter 2017 Earnings Call   [Sep-07-17 08:30PM  Business Wire]
▶ ETF Inflows Propping Up Gold Prices   [07:00AM  Morningstar]
▶ Bullish on Newmont Mining as Gold Surges   [Sep-05-17 12:52PM  GuruFocus.com]
▶ Understanding Silver Miners Financial Leverage after 2Q17   [Sep-04-17 09:07AM  Market Realist]
▶ Trade of the Day: Newmont Mining Corp (NEM)   [Sep-01-17 09:23AM  InvestorPlace]
▶ Agnico Eagle Goes Ex-Dividend Wednesday   [Aug-30-17 04:06PM  GuruFocus.com]
▶ Consider Newmont Mining   [Aug-29-17 04:30PM  GuruFocus.com]
▶ Newmont Mining Earns Relative Strength Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ The Hot Stock: Newmont Mining Climbs 3.5%   [Aug-28-17 04:18PM  Barrons.com]
Financial statements of NEM
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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