Intrinsic value of Companhia Siderurgica Nacional ADR - SID

Previous Close

$2.48

  Intrinsic Value

$3.25

stock screener

  Rating & Target

buy

+31%

  Value-price divergence*

+632%

Previous close

$2.48

 
Intrinsic value

$3.25

 
Up/down potential

+31%

 
Rating

buy

 
Value-price divergence*

+632%

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

We calculate the intrinsic value of SID 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 2015), $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 3.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2015(a)
   2016
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -4.92
  13.60
  12.74
  11.97
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
Revenue, $m
  4,848
  5,507
  6,209
  6,952
  7,735
  8,559
  9,421
  10,323
  11,264
  12,244
  13,264
  14,325
  15,428
  16,574
  17,765
  19,002
  20,289
  21,627
  23,018
  24,466
  25,974
  27,544
  29,181
  30,887
  32,666
  34,524
  36,463
  38,489
  40,606
  42,819
  45,133
Variable operating expenses, $m
 
  4,526
  5,086
  5,679
  6,304
  6,962
  7,650
  8,370
  9,121
  9,903
  10,718
  11,435
  12,315
  13,230
  14,181
  15,169
  16,196
  17,264
  18,375
  19,531
  20,734
  21,988
  23,294
  24,656
  26,077
  27,559
  29,107
  30,724
  32,414
  34,181
  36,028
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
  3,210
  4,526
  5,086
  5,679
  6,304
  6,962
  7,650
  8,370
  9,121
  9,903
  10,718
  11,435
  12,315
  13,230
  14,181
  15,169
  16,196
  17,264
  18,375
  19,531
  20,734
  21,988
  23,294
  24,656
  26,077
  27,559
  29,107
  30,724
  32,414
  34,181
  36,028
Operating income, $m
  1,637
  981
  1,123
  1,273
  1,431
  1,597
  1,771
  1,953
  2,143
  2,340
  2,546
  2,890
  3,112
  3,343
  3,584
  3,833
  4,093
  4,363
  4,644
  4,936
  5,240
  5,557
  5,887
  6,231
  6,590
  6,965
  7,356
  7,764
  8,192
  8,638
  9,105
EBITDA, $m
  2,009
  1,485
  1,674
  1,874
  2,086
  2,308
  2,540
  2,783
  3,037
  3,301
  3,576
  3,862
  4,160
  4,469
  4,790
  5,123
  5,470
  5,831
  6,206
  6,596
  7,003
  7,426
  7,868
  8,328
  8,807
  9,308
  9,831
  10,377
  10,948
  11,545
  12,169
Interest expense (income), $m
  937
  997
  1,159
  1,332
  1,515
  1,707
  1,910
  2,122
  2,344
  2,575
  2,816
  3,067
  3,328
  3,599
  3,881
  4,174
  4,478
  4,794
  5,123
  5,466
  5,822
  6,192
  6,579
  6,981
  7,401
  7,838
  8,295
  8,772
  9,270
  9,791
  10,335
Earnings before tax, $m
  571
  -16
  -36
  -59
  -84
  -110
  -139
  -169
  -201
  -235
  -270
  -177
  -215
  -255
  -297
  -340
  -385
  -432
  -480
  -530
  -582
  -636
  -692
  -750
  -811
  -874
  -939
  -1,007
  -1,079
  -1,153
  -1,230
Tax expense, $m
  60
  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
Net income, $m
  398
  -16
  -36
  -59
  -84
  -110
  -139
  -169
  -201
  -235
  -270
  -177
  -215
  -255
  -297
  -340
  -385
  -432
  -480
  -530
  -582
  -636
  -692
  -750
  -811
  -874
  -939
  -1,007
  -1,079
  -1,153
  -1,230

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,730
  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
  15,382
  17,484
  19,711
  22,070
  24,557
  27,170
  29,908
  32,771
  35,757
  38,869
  42,107
  45,475
  48,976
  52,615
  56,396
  60,325
  64,409
  68,656
  73,074
  77,671
  82,457
  87,442
  92,637
  98,053
  103,703
  109,600
  115,756
  122,187
  128,908
  135,933
  143,280
Adjusted assets (=assets-cash), $m
  12,652
  17,484
  19,711
  22,070
  24,557
  27,170
  29,908
  32,771
  35,757
  38,869
  42,107
  45,475
  48,976
  52,615
  56,396
  60,325
  64,409
  68,656
  73,074
  77,671
  82,457
  87,442
  92,637
  98,053
  103,703
  109,600
  115,756
  122,187
  128,908
  135,933
  143,280
Revenue / Adjusted assets
  0.383
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
Average production assets, $m
  5,596
  6,355
  7,165
  8,023
  8,927
  9,877
  10,872
  11,913
  12,998
  14,129
  15,306
  16,531
  17,803
  19,126
  20,500
  21,929
  23,413
  24,957
  26,563
  28,234
  29,974
  31,786
  33,674
  35,643
  37,697
  39,841
  42,079
  44,416
  46,859
  49,413
  52,084
Working capital, $m
  3,511
  1,559
  1,757
  1,967
  2,189
  2,422
  2,666
  2,921
  3,188
  3,465
  3,754
  4,054
  4,366
  4,690
  5,027
  5,378
  5,742
  6,120
  6,514
  6,924
  7,351
  7,795
  8,258
  8,741
  9,245
  9,770
  10,319
  10,892
  11,491
  12,118
  12,773
Total debt, $m
  10,839
  12,601
  14,477
  16,463
  18,557
  20,757
  23,063
  25,473
  27,988
  30,608
  33,334
  36,170
  39,118
  42,182
  45,365
  48,674
  52,113
  55,689
  59,408
  63,279
  67,309
  71,506
  75,880
  80,441
  85,198
  90,163
  95,347
  100,762
  106,420
  112,336
  118,522
Total liabilities, $m
  12,958
  14,721
  16,597
  18,583
  20,677
  22,877
  25,183
  27,593
  30,108
  32,728
  35,454
  38,290
  41,238
  44,302
  47,485
  50,794
  54,233
  57,809
  61,528
  65,399
  69,429
  73,626
  78,000
  82,561
  87,318
  92,283
  97,467
  102,882
  108,540
  114,456
  120,642
Total equity, $m
  2,423
  2,762
  3,114
  3,487
  3,880
  4,293
  4,726
  5,178
  5,650
  6,141
  6,653
  7,185
  7,738
  8,313
  8,911
  9,531
  10,177
  10,848
  11,546
  12,272
  13,028
  13,816
  14,637
  15,492
  16,385
  17,317
  18,289
  19,306
  20,367
  21,477
  22,638
Total liabilities and equity, $m
  15,381
  17,483
  19,711
  22,070
  24,557
  27,170
  29,909
  32,771
  35,758
  38,869
  42,107
  45,475
  48,976
  52,615
  56,396
  60,325
  64,410
  68,657
  73,074
  77,671
  82,457
  87,442
  92,637
  98,053
  103,703
  109,600
  115,756
  122,188
  128,907
  135,933
  143,280
Debt-to-equity ratio
  4.473
  4.560
  4.650
  4.720
  4.780
  4.840
  4.880
  4.920
  4.950
  4.980
  5.010
  5.030
  5.060
  5.070
  5.090
  5.110
  5.120
  5.130
  5.150
  5.160
  5.170
  5.180
  5.180
  5.190
  5.200
  5.210
  5.210
  5.220
  5.230
  5.230
  5.240
Adjusted equity ratio
  -0.024
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  398
  -16
  -36
  -59
  -84
  -110
  -139
  -169
  -201
  -235
  -270
  -177
  -215
  -255
  -297
  -340
  -385
  -432
  -480
  -530
  -582
  -636
  -692
  -750
  -811
  -874
  -939
  -1,007
  -1,079
  -1,153
  -1,230
Depreciation, amort., depletion, $m
  372
  503
  551
  602
  655
  711
  769
  830
  894
  961
  1,030
  972
  1,047
  1,125
  1,206
  1,290
  1,377
  1,468
  1,563
  1,661
  1,763
  1,870
  1,981
  2,097
  2,217
  2,344
  2,475
  2,613
  2,756
  2,907
  3,064
Funds from operations, $m
  1,679
  488
  515
  542
  571
  600
  630
  661
  693
  726
  760
  795
  832
  870
  909
  950
  992
  1,037
  1,083
  1,131
  1,181
  1,234
  1,289
  1,347
  1,407
  1,470
  1,536
  1,605
  1,678
  1,754
  1,834
Change in working capital, $m
  76
  187
  199
  210
  222
  233
  244
  255
  266
  277
  289
  300
  312
  324
  337
  350
  364
  379
  394
  410
  427
  444
  463
  483
  504
  526
  549
  573
  599
  626
  655
Cash from operations, $m
  1,603
  301
  316
  332
  349
  367
  386
  406
  427
  449
  472
  495
  520
  545
  572
  599
  628
  658
  689
  721
  755
  790
  826
  864
  903
  944
  987
  1,032
  1,079
  1,128
  1,179
Maintenance CAPEX, $m
  0
  -329
  -374
  -421
  -472
  -525
  -581
  -640
  -701
  -765
  -831
  -900
  -972
  -1,047
  -1,125
  -1,206
  -1,290
  -1,377
  -1,468
  -1,563
  -1,661
  -1,763
  -1,870
  -1,981
  -2,097
  -2,217
  -2,344
  -2,475
  -2,613
  -2,756
  -2,907
New CAPEX, $m
  -511
  -760
  -810
  -857
  -904
  -950
  -995
  -1,040
  -1,086
  -1,131
  -1,177
  -1,224
  -1,273
  -1,323
  -1,374
  -1,428
  -1,485
  -1,544
  -1,606
  -1,671
  -1,740
  -1,812
  -1,888
  -1,969
  -2,054
  -2,143
  -2,238
  -2,338
  -2,443
  -2,554
  -2,671
Cash from investing activities, $m
  -906
  -1,089
  -1,184
  -1,278
  -1,376
  -1,475
  -1,576
  -1,680
  -1,787
  -1,896
  -2,008
  -2,124
  -2,245
  -2,370
  -2,499
  -2,634
  -2,775
  -2,921
  -3,074
  -3,234
  -3,401
  -3,575
  -3,758
  -3,950
  -4,151
  -4,360
  -4,582
  -4,813
  -5,056
  -5,310
  -5,578
Free cash flow, $m
  697
  -788
  -867
  -947
  -1,027
  -1,108
  -1,190
  -1,274
  -1,359
  -1,447
  -1,537
  -1,630
  -1,725
  -1,825
  -1,928
  -2,035
  -2,147
  -2,263
  -2,385
  -2,512
  -2,646
  -2,786
  -2,932
  -3,086
  -3,247
  -3,417
  -3,594
  -3,781
  -3,977
  -4,183
  -4,399
Issuance/(repayment) of debt, $m
  -784
  1,762
  1,875
  1,986
  2,094
  2,201
  2,306
  2,410
  2,515
  2,620
  2,727
  2,836
  2,948
  3,064
  3,184
  3,308
  3,439
  3,576
  3,720
  3,871
  4,030
  4,197
  4,374
  4,561
  4,757
  4,965
  5,184
  5,415
  5,659
  5,916
  6,186
Issuance/(repurchase) of shares, $m
  -3
  355
  388
  432
  477
  523
  571
  621
  673
  726
  781
  709
  769
  830
  894
  961
  1,030
  1,103
  1,178
  1,256
  1,338
  1,423
  1,513
  1,606
  1,703
  1,805
  1,912
  2,024
  2,140
  2,263
  2,391
Cash from financing (excl. dividends), $m  
  -803
  2,117
  2,263
  2,418
  2,571
  2,724
  2,877
  3,031
  3,188
  3,346
  3,508
  3,545
  3,717
  3,894
  4,078
  4,269
  4,469
  4,679
  4,898
  5,127
  5,368
  5,620
  5,887
  6,167
  6,460
  6,770
  7,096
  7,439
  7,799
  8,179
  8,577
Total cash flow (excl. dividends), $m
  -87
  1,329
  1,396
  1,471
  1,544
  1,616
  1,687
  1,758
  1,828
  1,899
  1,971
  1,915
  1,991
  2,069
  2,150
  2,235
  2,323
  2,415
  2,512
  2,614
  2,722
  2,835
  2,954
  3,080
  3,213
  3,354
  3,501
  3,657
  3,822
  3,996
  4,179
Retained Cash Flow (-), $m
  -622
  -355
  -388
  -432
  -477
  -523
  -571
  -621
  -673
  -726
  -781
  -709
  -769
  -830
  -894
  -961
  -1,030
  -1,103
  -1,178
  -1,256
  -1,338
  -1,423
  -1,513
  -1,606
  -1,703
  -1,805
  -1,912
  -2,024
  -2,140
  -2,263
  -2,391
Prev. year cash balance distribution, $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 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
 
  974
  1,008
  1,039
  1,067
  1,093
  1,116
  1,136
  1,155
  1,173
  1,190
  1,206
  1,223
  1,239
  1,256
  1,274
  1,293
  1,313
  1,335
  1,358
  1,384
  1,412
  1,442
  1,475
  1,510
  1,548
  1,590
  1,634
  1,682
  1,733
  1,788
Discount rate, %
 
  9.10
  9.56
  10.03
  10.53
  11.06
  11.61
  12.19
  12.80
  13.44
  14.12
  14.82
  15.56
  16.34
  17.16
  18.02
  18.92
  19.86
  20.86
  21.90
  23.00
  24.15
  25.35
  26.62
  27.95
  29.35
  30.82
  32.36
  33.97
  35.67
  37.46
PV of cash for distribution, $m
 
  893
  840
  780
  715
  647
  577
  508
  441
  377
  318
  264
  215
  173
  137
  106
  81
  60
  44
  32
  22
  15
  10
  6
  4
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  90.5
  82.2
  74.7
  68.0
  62.0
  56.6
  51.7
  47.3
  43.3
  39.7
  36.9
  34.2
  31.8
  29.5
  27.4
  25.4
  23.6
  21.9
  20.3
  18.8
  17.4
  16.2
  15.0
  13.9
  12.9
  11.9
  11.0
  10.2
  9.5
  8.8

Companhia Siderúrgica Nacional operates as an integrated steel producer in Brazil. It operates through five segments: Steel, Mining, Logistics, Cement, and Energy. It offers flat steel; slabs; hot-rolled products, including heavy and light-gauge hot-rolled coils and sheets; cold-rolled products comprising cold-rolled coils and sheets; galvanized sheets and coils; tin mill products that consist of flat-rolled low-carbon steel coils or sheets; profiles, sections, channels, UPE sections, and steel sleepers; and long steel products. The company primarily explores for iron ore reserves at Casa de Pedra mine located in the city of Congonhas in the state of Minas Gerais, Brazil. It sells iron ore products in Asia, Europe, and Brazil. The company also engages in logistics business comprising railway and port facilities; produces and sells cement; and generates electric power from its thermoelectric co-generation and hydroelectric power plants. The company also exports its products. Companhia Siderúrgica Nacional was founded in 1941 and is headquartered in São Paulo, Brazil. Companhia Siderúrgica Nacional operates as a subsidiary of Vicunha Aços S.A.

FINANCIAL RATIOS  of  Companhia Siderurgica Nacional ADR (SID)

Valuation Ratios
P/E Ratio 8.5
Price to Sales 0.7
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 2.1
Price to Free Cash Flow 3.1
Growth Rates
Sales Growth Rate -4.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.6%
Cap. Spend. - 3 Yr. Gr. Rate -10%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 422.9%
Total Debt to Equity 447.3%
Interest Coverage 2
Management Effectiveness
Return On Assets 7.9%
Ret/ On Assets - 3 Yr. Avg. 5%
Return On Total Capital 3.2%
Ret/ On T. Cap. - 3 Yr. Avg. 1.4%
Return On Equity 18.8%
Return On Equity - 3 Yr. Avg. 7.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 23%
Gross Margin - 3 Yr. Avg. 26.5%
EBITDA Margin 38.8%
EBITDA Margin - 3 Yr. Avg. 28.7%
Operating Margin 33.8%
Oper. Margin - 3 Yr. Avg. 23.1%
Pre-Tax Margin 11.8%
Pre-Tax Margin - 3 Yr. Avg. 4.6%
Net Profit Margin 8.2%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 10.5%
Eff/ Tax Rate - 3 Yr. Avg. 26.8%
Payout Ratio 43.7%

SID stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SID stock intrinsic value calculation we used $4848 million for the last fiscal year's total revenue generated by Companhia Siderurgica Nacional ADR. The default revenue input number comes from 2015 income statement of Companhia Siderurgica Nacional 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 SID stock valuation model: a) initial revenue growth rate of 13.6% 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 9.1%, whose default value for SID is calculated based on our internal credit rating of Companhia Siderurgica Nacional 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 Companhia Siderurgica Nacional 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 SID stock the variable cost ratio is equal to 82.5%.

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 SID 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 9.2% for Companhia Siderurgica Nacional ADR.

Corporate tax rate of 27% is the nominal tax rate for Companhia Siderurgica Nacional 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 SID 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 SID are equal to 115.4%.

Life of production assets of 17 years is the average useful life of capital assets used in Companhia Siderurgica Nacional 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 SID is equal to 28.3%. 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 - $2423 million for Companhia Siderurgica Nacional 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 1359.9 million for Companhia Siderurgica Nacional 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 Companhia Siderurgica Nacional ADR at the current share price and the inputted number of shares is $3.4 billion.

RELATED COMPANIES Price Int.Val. Rating
VALE Vale ADR 9.99 1.81  str.sell
GGB Gerdau ADR 3.44 0.75  str.sell
PBR Petroleo Brasi 8.70 3.08  str.sell
BAK Braskem ADR 23.55 44.31  str.buy
MT ArcelorMittal 25.97 2.04  str.sell
TX TERNIUM ADR 29.08 4.59  str.sell

COMPANY NEWS

▶ Brazil's CSN delays second-quarter results   [Aug-15-17 05:57PM  Reuters]
▶ First Asset Opens the Market   [Jul-05-17 10:09AM  PR Newswire]
▶ 7 Stocks You Could Buy to Beat the Market   [Jan-18-17 03:20PM  GuruFocus.com]
▶ Bruce Pile's Top Recommendations For 2017   [Dec-27-16 06:06PM  Forbes]
▶ Is Woodward Inc (WWD) a Good Stock to Buy?   [Dec-12-16 07:48PM  Insider Monkey]
▶ Is Woodward Inc (WWD) a Good Stock to Buy?   [07:48PM  at Insider Monkey]
▶ CSN announces 3Q16 results   [Nov-14-16 06:41AM  PR Newswire]
▶ Here's Why These Steel Stocks Got Hammered   [Sep-14-16 02:45PM  at Motley Fool]
▶ CSN announces 2Q16 results   [05:54PM  PR Newswire]
▶ Why Are These Stocks Deep In Red on Friday?   [12:48PM  at Insider Monkey]
▶ CSN announces 1Q16 results   [May-12-16 08:52AM  PR Newswire]
▶ 5 Stocks Below $10 That Have Crushed the Market   [01:55PM  at Investopedia]
▶ Heres Why These 5 Stocks Are Grabbing Headlines Today   [Apr-13-16 02:20PM  at Insider Monkey]
▶ Five Top-Performering Stocks Hedge Funds Overlooked   [Apr-02-16 03:49PM  at Insider Monkey]
▶ CSN announces its 4Q15 results   [12:28AM  PR Newswire]
▶ CSN announces 4Q15 and 2015 Results   [Mar-28-16 11:27PM  at noodls]
▶ 4Q15 and 2015 Earnings Release Schedule   [Mar-21-16 05:03PM  at noodls]
▶ Why Brazilian Industrial Stocks Surged Higher Today   [Mar-17-16 04:08PM  at Motley Fool]
▶ 3 Low-priced Stocks Set to Head Higher   [01:54PM  at Investopedia]
▶ Is Brazil Economy Bottoming Out?   [12:39PM  at Barrons.com]
▶ Do GGB, CMC, SID, and TMST Weigh Their Weight in Gold?   [Feb-29-16 08:30AM  Accesswire]
▶ 5 Commodity Stocks That Could Reverse Higher in February   [Feb-09-16 06:21AM  at TheStreet]
▶ ArcelorMittal: 'We Knew We Were Early, But Not This Early'   [Dec-02  12:09PM  at Barrons.com]
▶ CSN announces 3Q15 results   [07:27AM  PR Newswire]
Stock chart of SID Financial statements of SID
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

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

Copyright © X-FIN.com 2005-2017. All rigths reserved.