Intrinsic value of Nortel Inversora ADR - NTL

Previous Close

$33.00

  Intrinsic Value

$7,974

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+1474%

Previous close

$33.00

 
Intrinsic value

$7,974

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+1474%

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

We calculate the intrinsic value of NTL 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 0.1

 

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, %
  31.57
  31.60
  28.94
  26.55
  24.39
  22.45
  20.71
  19.14
  17.72
  16.45
  15.31
  14.27
  13.35
  12.51
  11.76
  11.09
  10.48
  9.93
  9.44
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
  6.25
Revenue, $m
  3,413
  4,492
  5,791
  7,329
  9,116
  11,163
  13,475
  16,053
  18,898
  22,007
  25,375
  28,998
  32,868
  36,981
  41,330
  45,912
  50,722
  55,758
  61,019
  66,507
  72,222
  78,168
  84,352
  90,779
  97,458
  104,399
  111,613
  119,111
  126,909
  135,022
  143,464
Variable operating expenses, $m
 
  3,804
  4,905
  6,207
  7,722
  9,455
  11,413
  13,597
  16,007
  18,640
  21,493
  24,561
  27,839
  31,323
  35,007
  38,887
  42,961
  47,227
  51,683
  56,331
  61,172
  66,209
  71,446
  76,890
  82,547
  88,426
  94,536
  100,887
  107,492
  114,363
  121,514
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,913
  3,804
  4,905
  6,207
  7,722
  9,455
  11,413
  13,597
  16,007
  18,640
  21,493
  24,561
  27,839
  31,323
  35,007
  38,887
  42,961
  47,227
  51,683
  56,331
  61,172
  66,209
  71,446
  76,890
  82,547
  88,426
  94,536
  100,887
  107,492
  114,363
  121,514
Operating income, $m
  500
  687
  886
  1,121
  1,395
  1,708
  2,062
  2,456
  2,891
  3,367
  3,882
  4,437
  5,029
  5,658
  6,324
  7,025
  7,760
  8,531
  9,336
  10,176
  11,050
  11,960
  12,906
  13,889
  14,911
  15,973
  17,077
  18,224
  19,417
  20,658
  21,950
EBITDA, $m
  897
  751
  969
  1,226
  1,525
  1,868
  2,254
  2,686
  3,162
  3,682
  4,245
  4,851
  5,499
  6,187
  6,915
  7,681
  8,486
  9,328
  10,209
  11,127
  12,083
  13,078
  14,112
  15,187
  16,305
  17,466
  18,673
  19,927
  21,232
  22,589
  24,002
Interest expense (income), $m
  101
  104
  233
  388
  572
  786
  1,030
  1,307
  1,615
  1,955
  2,326
  2,729
  3,162
  3,625
  4,116
  4,636
  5,184
  5,759
  6,361
  6,990
  7,645
  8,329
  9,039
  9,778
  10,547
  11,345
  12,175
  13,037
  13,933
  14,865
  15,835
Earnings before tax, $m
  358
  583
  653
  733
  823
  922
  1,031
  1,150
  1,277
  1,412
  1,556
  1,708
  1,867
  2,033
  2,207
  2,388
  2,577
  2,772
  2,975
  3,186
  3,405
  3,631
  3,867
  4,111
  4,364
  4,628
  4,902
  5,187
  5,484
  5,793
  6,115
Tax expense, $m
  103
  157
  176
  198
  222
  249
  278
  310
  345
  381
  420
  461
  504
  549
  596
  645
  696
  749
  803
  860
  919
  980
  1,044
  1,110
  1,178
  1,250
  1,324
  1,401
  1,481
  1,564
  1,651
Net income, $m
  140
  426
  477
  535
  601
  673
  753
  839
  932
  1,031
  1,136
  1,247
  1,363
  1,484
  1,611
  1,744
  1,881
  2,024
  2,172
  2,326
  2,485
  2,651
  2,823
  3,001
  3,186
  3,378
  3,579
  3,787
  4,003
  4,229
  4,464

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  368
  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
  3,070
  3,556
  4,585
  5,803
  7,218
  8,839
  10,669
  12,710
  14,963
  17,424
  20,091
  22,959
  26,024
  29,280
  32,724
  36,351
  40,160
  44,147
  48,313
  52,658
  57,183
  61,891
  66,787
  71,876
  77,164
  82,660
  88,371
  94,308
  100,483
  106,905
  113,590
Adjusted assets (=assets-cash), $m
  2,702
  3,556
  4,585
  5,803
  7,218
  8,839
  10,669
  12,710
  14,963
  17,424
  20,091
  22,959
  26,024
  29,280
  32,724
  36,351
  40,160
  44,147
  48,313
  52,658
  57,183
  61,891
  66,787
  71,876
  77,164
  82,660
  88,371
  94,308
  100,483
  106,905
  113,590
Revenue / Adjusted assets
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
  1.263
Average production assets, $m
  488
  642
  828
  1,048
  1,304
  1,596
  1,927
  2,296
  2,702
  3,147
  3,629
  4,147
  4,700
  5,288
  5,910
  6,565
  7,253
  7,973
  8,726
  9,510
  10,328
  11,178
  12,062
  12,981
  13,937
  14,929
  15,961
  17,033
  18,148
  19,308
  20,515
Working capital, $m
  -58
  -287
  -371
  -469
  -583
  -714
  -862
  -1,027
  -1,209
  -1,408
  -1,624
  -1,856
  -2,104
  -2,367
  -2,645
  -2,938
  -3,246
  -3,569
  -3,905
  -4,256
  -4,622
  -5,003
  -5,399
  -5,810
  -6,237
  -6,682
  -7,143
  -7,623
  -8,122
  -8,641
  -9,182
Total debt, $m
  762
  1,239
  2,065
  3,043
  4,179
  5,480
  6,950
  8,589
  10,398
  12,375
  14,516
  16,819
  19,280
  21,895
  24,660
  27,573
  30,631
  33,833
  37,178
  40,667
  44,301
  48,082
  52,013
  56,099
  60,346
  64,759
  69,345
  74,113
  79,070
  84,228
  89,596
Total liabilities, $m
  2,379
  2,856
  3,682
  4,660
  5,796
  7,097
  8,567
  10,206
  12,015
  13,992
  16,133
  18,436
  20,897
  23,512
  26,277
  29,190
  32,248
  35,450
  38,795
  42,284
  45,918
  49,699
  53,630
  57,716
  61,963
  66,376
  70,962
  75,730
  80,687
  85,845
  91,213
Total equity, $m
  691
  701
  903
  1,143
  1,422
  1,741
  2,102
  2,504
  2,948
  3,433
  3,958
  4,523
  5,127
  5,768
  6,447
  7,161
  7,911
  8,697
  9,518
  10,374
  11,265
  12,193
  13,157
  14,160
  15,201
  16,284
  17,409
  18,579
  19,795
  21,060
  22,377
Total liabilities and equity, $m
  3,070
  3,557
  4,585
  5,803
  7,218
  8,838
  10,669
  12,710
  14,963
  17,425
  20,091
  22,959
  26,024
  29,280
  32,724
  36,351
  40,159
  44,147
  48,313
  52,658
  57,183
  61,892
  66,787
  71,876
  77,164
  82,660
  88,371
  94,309
  100,482
  106,905
  113,590
Debt-to-equity ratio
  1.103
  1.770
  2.290
  2.660
  2.940
  3.150
  3.310
  3.430
  3.530
  3.610
  3.670
  3.720
  3.760
  3.800
  3.830
  3.850
  3.870
  3.890
  3.910
  3.920
  3.930
  3.940
  3.950
  3.960
  3.970
  3.980
  3.980
  3.990
  3.990
  4.000
  4.000
Adjusted equity ratio
  0.120
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197
  0.197

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  140
  426
  477
  535
  601
  673
  753
  839
  932
  1,031
  1,136
  1,247
  1,363
  1,484
  1,611
  1,744
  1,881
  2,024
  2,172
  2,326
  2,485
  2,651
  2,823
  3,001
  3,186
  3,378
  3,579
  3,787
  4,003
  4,229
  4,464
Depreciation, amort., depletion, $m
  397
  64
  83
  105
  130
  160
  193
  230
  270
  315
  363
  415
  470
  529
  591
  657
  725
  797
  873
  951
  1,033
  1,118
  1,206
  1,298
  1,394
  1,493
  1,596
  1,703
  1,815
  1,931
  2,052
Funds from operations, $m
  536
  490
  560
  640
  731
  833
  946
  1,069
  1,202
  1,346
  1,499
  1,661
  1,833
  2,013
  2,202
  2,400
  2,606
  2,821
  3,045
  3,277
  3,518
  3,769
  4,029
  4,299
  4,580
  4,871
  5,175
  5,490
  5,818
  6,160
  6,516
Change in working capital, $m
  -189
  -69
  -83
  -98
  -114
  -131
  -148
  -165
  -182
  -199
  -216
  -232
  -248
  -263
  -278
  -293
  -308
  -322
  -337
  -351
  -366
  -381
  -396
  -411
  -427
  -444
  -462
  -480
  -499
  -519
  -540
Cash from operations, $m
  725
  559
  643
  738
  845
  964
  1,093
  1,234
  1,384
  1,545
  1,714
  1,893
  2,080
  2,276
  2,481
  2,693
  2,914
  3,143
  3,381
  3,628
  3,884
  4,149
  4,425
  4,710
  5,007
  5,316
  5,636
  5,970
  6,317
  6,679
  7,056
Maintenance CAPEX, $m
  0
  -49
  -64
  -83
  -105
  -130
  -160
  -193
  -230
  -270
  -315
  -363
  -415
  -470
  -529
  -591
  -657
  -725
  -797
  -873
  -951
  -1,033
  -1,118
  -1,206
  -1,298
  -1,394
  -1,493
  -1,596
  -1,703
  -1,815
  -1,931
New CAPEX, $m
  -726
  -154
  -186
  -220
  -256
  -293
  -331
  -369
  -407
  -445
  -482
  -518
  -553
  -588
  -622
  -655
  -688
  -720
  -752
  -785
  -817
  -850
  -884
  -919
  -955
  -993
  -1,032
  -1,072
  -1,115
  -1,160
  -1,207
Cash from investing activities, $m
  -726
  -203
  -250
  -303
  -361
  -423
  -491
  -562
  -637
  -715
  -797
  -881
  -968
  -1,058
  -1,151
  -1,246
  -1,345
  -1,445
  -1,549
  -1,658
  -1,768
  -1,883
  -2,002
  -2,125
  -2,253
  -2,387
  -2,525
  -2,668
  -2,818
  -2,975
  -3,138
Free cash flow, $m
  -1
  356
  393
  436
  485
  541
  603
  672
  748
  830
  918
  1,012
  1,112
  1,218
  1,330
  1,447
  1,570
  1,698
  1,832
  1,971
  2,116
  2,266
  2,422
  2,585
  2,754
  2,929
  3,112
  3,301
  3,499
  3,704
  3,918
Issuance/(repayment) of debt, $m
  410
  686
  826
  977
  1,137
  1,301
  1,470
  1,639
  1,809
  1,977
  2,142
  2,303
  2,461
  2,615
  2,765
  2,913
  3,058
  3,202
  3,345
  3,489
  3,634
  3,781
  3,931
  4,086
  4,246
  4,413
  4,586
  4,768
  4,958
  5,158
  5,368
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  
  274
  686
  826
  977
  1,137
  1,301
  1,470
  1,639
  1,809
  1,977
  2,142
  2,303
  2,461
  2,615
  2,765
  2,913
  3,058
  3,202
  3,345
  3,489
  3,634
  3,781
  3,931
  4,086
  4,246
  4,413
  4,586
  4,768
  4,958
  5,158
  5,368
Total cash flow (excl. dividends), $m
  288
  1,042
  1,219
  1,413
  1,622
  1,842
  2,073
  2,312
  2,557
  2,806
  3,059
  3,315
  3,573
  3,833
  4,095
  4,360
  4,628
  4,900
  5,177
  5,459
  5,749
  6,047
  6,354
  6,671
  7,000
  7,342
  7,698
  8,069
  8,457
  8,862
  9,286
Retained Cash Flow (-), $m
  -76
  -169
  -203
  -240
  -279
  -319
  -361
  -402
  -444
  -485
  -525
  -565
  -604
  -641
  -678
  -715
  -750
  -786
  -821
  -856
  -891
  -928
  -964
  -1,002
  -1,042
  -1,083
  -1,125
  -1,170
  -1,216
  -1,265
  -1,317
Prev. year cash balance distribution, $m
 
  159
  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
 
  1,032
  1,016
  1,173
  1,343
  1,523
  1,712
  1,910
  2,113
  2,321
  2,534
  2,750
  2,969
  3,192
  3,417
  3,645
  3,878
  4,114
  4,356
  4,604
  4,858
  5,119
  5,389
  5,669
  5,959
  6,260
  6,573
  6,900
  7,240
  7,596
  7,969
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
 
  989
  931
  1,021
  1,106
  1,180
  1,243
  1,290
  1,321
  1,334
  1,329
  1,306
  1,267
  1,213
  1,147
  1,070
  985
  895
  802
  709
  617
  530
  447
  372
  303
  244
  192
  148
  112
  83
  60
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

Nortel Inversora S.A., through its subsidiary, Telecom Argentina S.A., provides fixed-line public and mobile telecommunication services in Argentina and internationally. It operates through three segments: Fixed Services, Personal Mobile Services, and NĂșcleo Mobile Services. The company offers local fixed telephony, public telephony, domestic and international long-distance telephony, domestic and international point-to-point link, domestic and international telex, and Internet access services. It also provides value-added services, data transmission, videoconferencing, transportation of audio and video signals, and mobile radio communication services. In addition, the company offers call forwarding, call waiting, three-way calling, itemized billing, voicemail, SMS, MMS, GPRS, mobile Internet, online streaming, corporate e-mail and social network access, and other miscellaneous cellular services; provides IT solution outsourcing services; and sells mobile communication devices. The company was founded in 1990 and is based in Buenos Aires, Argentina.

FINANCIAL RATIOS  of  Nortel Inversora ADR (NTL)

Valuation Ratios
P/E Ratio 1.6
Price to Sales 0.1
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 0.3
Price to Free Cash Flow -224.4
Growth Rates
Sales Growth Rate 31.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75.8%
Cap. Spend. - 3 Yr. Gr. Rate 22%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 80%
Total Debt to Equity 110.3%
Interest Coverage 5
Management Effectiveness
Return On Assets 7.7%
Ret/ On Assets - 3 Yr. Avg. 7.6%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 18.1%
Return On Equity 21.4%
Return On Equity - 3 Yr. Avg. 23.4%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 83.6%
Gross Margin - 3 Yr. Avg. 82.8%
EBITDA Margin 25.1%
EBITDA Margin - 3 Yr. Avg. 25.6%
Operating Margin 14.6%
Oper. Margin - 3 Yr. Avg. 15.4%
Pre-Tax Margin 10.5%
Pre-Tax Margin - 3 Yr. Avg. 13.4%
Net Profit Margin 4.1%
Net Profit Margin - 3 Yr. Avg. 4.9%
Effective Tax Rate 28.8%
Eff/ Tax Rate - 3 Yr. Avg. 32.2%
Payout Ratio 65.7%

NTL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTL stock intrinsic value calculation we used $3413 million for the last fiscal year's total revenue generated by Nortel Inversora ADR. The default revenue input number comes from 2016 income statement of Nortel Inversora ADR. 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 NTL stock valuation model: a) initial revenue growth rate of 31.6% 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 NTL is calculated based on our internal credit rating of Nortel Inversora ADR, 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 Nortel Inversora ADR.
    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 NTL stock the variable cost ratio is equal to 84.7%.

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 NTL 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 18.8% for Nortel Inversora ADR.

Corporate tax rate of 27% is the nominal tax rate for Nortel Inversora ADR. 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 NTL 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 NTL are equal to 14.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Nortel Inversora ADR 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 NTL is equal to -6.4%. 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 - $691 million for Nortel Inversora ADR - 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 3.056 million for Nortel Inversora ADR 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 Nortel Inversora ADR at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Hedge Funds Are Betting On Extended Stay America Inc (STAY)   [Nov-29-16 08:37AM  Insider Monkey]
▶ NORTEL INVESTMENTS INC Financials   [01:04PM  EDGAR Online Financials]
▶ What do Hedge Funds Think of Nortel Inversora S.A. (ADR) (NTL)?   [Nov-25  03:11PM  at Insider Monkey]
▶ 3 Stocks Going Ex-Dividend Monday: NTL, PFLT, PGH   [Oct-17  10:03AM  at TheStreet]
▶ 5 Tech Trades Ready to Move   [Aug-05  10:01AM  at TheStreet]
▶ The slow death of the private office   [Sep-23  12:36PM  at Fortune]
Stock chart of NTL Financial statements of NTL Annual reports of NTL
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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