Intrinsic value of TERNIUM ADR - TX

Previous Close

$27.63

  Intrinsic Value

$4.65

stock screener

  Rating & Target

str. sell

-83%

Previous close

$27.63

 
Intrinsic value

$4.65

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of TX 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 5.5

 

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, %
  -8.29
  21.50
  19.85
  18.37
  17.03
  15.83
  14.74
  13.77
  12.89
  12.10
  11.39
  10.75
  10.18
  9.66
  9.19
  8.77
  8.40
  8.06
  7.75
  7.48
  7.23
  7.01
  6.81
  6.62
  6.46
  6.32
  6.18
  6.07
  5.96
  5.86
  5.78
Revenue, $m
  7,224
  8,777
  10,519
  12,451
  14,572
  16,878
  19,366
  22,032
  24,873
  27,883
  31,060
  34,400
  37,901
  41,562
  45,383
  49,365
  53,511
  57,822
  62,304
  66,963
  71,803
  76,834
  82,063
  87,499
  93,154
  99,038
  105,163
  111,542
  118,189
  125,119
  132,348
Variable operating expenses, $m
 
  8,052
  9,637
  11,395
  13,324
  15,422
  17,686
  20,112
  22,696
  25,435
  28,325
  31,298
  34,483
  37,814
  41,291
  44,914
  48,686
  52,609
  56,687
  60,925
  65,329
  69,906
  74,664
  79,610
  84,755
  90,108
  95,681
  101,485
  107,533
  113,838
  120,415
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
  6,082
  8,052
  9,637
  11,395
  13,324
  15,422
  17,686
  20,112
  22,696
  25,435
  28,325
  31,298
  34,483
  37,814
  41,291
  44,914
  48,686
  52,609
  56,687
  60,925
  65,329
  69,906
  74,664
  79,610
  84,755
  90,108
  95,681
  101,485
  107,533
  113,838
  120,415
Operating income, $m
  1,142
  725
  882
  1,056
  1,248
  1,456
  1,680
  1,920
  2,176
  2,448
  2,734
  3,102
  3,417
  3,747
  4,092
  4,451
  4,825
  5,213
  5,618
  6,038
  6,474
  6,928
  7,399
  7,889
  8,399
  8,930
  9,482
  10,057
  10,656
  11,281
  11,933
EBITDA, $m
  1,549
  1,220
  1,463
  1,731
  2,026
  2,347
  2,693
  3,063
  3,458
  3,877
  4,318
  4,783
  5,270
  5,779
  6,310
  6,864
  7,440
  8,039
  8,662
  9,310
  9,983
  10,683
  11,410
  12,165
  12,952
  13,770
  14,621
  15,508
  16,432
  17,396
  18,401
Interest expense (income), $m
  77
  50
  93
  142
  196
  255
  320
  389
  464
  543
  627
  716
  809
  907
  1,009
  1,116
  1,227
  1,343
  1,464
  1,589
  1,719
  1,854
  1,995
  2,141
  2,293
  2,451
  2,615
  2,786
  2,964
  3,150
  3,344
Earnings before tax, $m
  1,118
  675
  789
  914
  1,052
  1,200
  1,360
  1,531
  1,713
  1,905
  2,107
  2,386
  2,608
  2,840
  3,083
  3,335
  3,597
  3,870
  4,154
  4,449
  4,755
  5,074
  5,404
  5,749
  6,106
  6,479
  6,867
  7,271
  7,692
  8,131
  8,589
Tax expense, $m
  411
  182
  213
  247
  284
  324
  367
  413
  462
  514
  569
  644
  704
  767
  832
  900
  971
  1,045
  1,122
  1,201
  1,284
  1,370
  1,459
  1,552
  1,649
  1,749
  1,854
  1,963
  2,077
  2,195
  2,319
Net income, $m
  596
  493
  576
  668
  768
  876
  993
  1,118
  1,250
  1,391
  1,538
  1,742
  1,904
  2,074
  2,250
  2,435
  2,626
  2,825
  3,032
  3,248
  3,471
  3,704
  3,945
  4,196
  4,458
  4,730
  5,013
  5,308
  5,615
  5,936
  6,270

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  328
  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
  8,323
  9,709
  11,637
  13,774
  16,119
  18,670
  21,422
  24,372
  27,514
  30,844
  34,358
  38,053
  41,925
  45,976
  50,203
  54,608
  59,193
  63,963
  68,921
  74,074
  79,429
  84,993
  90,777
  96,791
  103,046
  109,555
  116,330
  123,387
  130,740
  138,406
  146,402
Adjusted assets (=assets-cash), $m
  7,995
  9,709
  11,637
  13,774
  16,119
  18,670
  21,422
  24,372
  27,514
  30,844
  34,358
  38,053
  41,925
  45,976
  50,203
  54,608
  59,193
  63,963
  68,921
  74,074
  79,429
  84,993
  90,777
  96,791
  103,046
  109,555
  116,330
  123,387
  130,740
  138,406
  146,402
Revenue / Adjusted assets
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
  0.904
Average production assets, $m
  4,375
  5,319
  6,375
  7,545
  8,830
  10,228
  11,736
  13,352
  15,073
  16,897
  18,822
  20,846
  22,968
  25,186
  27,502
  29,915
  32,427
  35,040
  37,757
  40,579
  43,513
  46,561
  49,730
  53,025
  56,451
  60,017
  63,729
  67,594
  71,623
  75,822
  80,203
Working capital, $m
  859
  1,641
  1,967
  2,328
  2,725
  3,156
  3,621
  4,120
  4,651
  5,214
  5,808
  6,433
  7,087
  7,772
  8,487
  9,231
  10,006
  10,813
  11,651
  12,522
  13,427
  14,368
  15,346
  16,362
  17,420
  18,520
  19,665
  20,858
  22,101
  23,397
  24,749
Total debt, $m
  1,219
  1,666
  2,535
  3,499
  4,557
  5,707
  6,949
  8,279
  9,696
  11,198
  12,782
  14,449
  16,195
  18,022
  19,928
  21,915
  23,983
  26,134
  28,370
  30,694
  33,109
  35,619
  38,228
  40,940
  43,761
  46,696
  49,752
  52,935
  56,251
  59,708
  63,314
Total liabilities, $m
  3,932
  4,379
  5,248
  6,212
  7,270
  8,420
  9,662
  10,992
  12,409
  13,911
  15,495
  17,162
  18,908
  20,735
  22,641
  24,628
  26,696
  28,847
  31,083
  33,407
  35,822
  38,332
  40,941
  43,653
  46,474
  49,409
  52,465
  55,648
  58,964
  62,421
  66,027
Total equity, $m
  4,391
  5,330
  6,388
  7,562
  8,849
  10,250
  11,761
  13,380
  15,105
  16,933
  18,863
  20,891
  23,017
  25,241
  27,561
  29,980
  32,497
  35,116
  37,838
  40,667
  43,606
  46,661
  49,837
  53,138
  56,572
  60,146
  63,865
  67,739
  71,776
  75,985
  80,375
Total liabilities and equity, $m
  8,323
  9,709
  11,636
  13,774
  16,119
  18,670
  21,423
  24,372
  27,514
  30,844
  34,358
  38,053
  41,925
  45,976
  50,202
  54,608
  59,193
  63,963
  68,921
  74,074
  79,428
  84,993
  90,778
  96,791
  103,046
  109,555
  116,330
  123,387
  130,740
  138,406
  146,402
Debt-to-equity ratio
  0.278
  0.310
  0.400
  0.460
  0.510
  0.560
  0.590
  0.620
  0.640
  0.660
  0.680
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
  0.750
  0.760
  0.760
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.780
  0.790
  0.790
Adjusted equity ratio
  0.508
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  596
  493
  576
  668
  768
  876
  993
  1,118
  1,250
  1,391
  1,538
  1,742
  1,904
  2,074
  2,250
  2,435
  2,626
  2,825
  3,032
  3,248
  3,471
  3,704
  3,945
  4,196
  4,458
  4,730
  5,013
  5,308
  5,615
  5,936
  6,270
Depreciation, amort., depletion, $m
  407
  495
  580
  675
  778
  891
  1,013
  1,143
  1,282
  1,429
  1,584
  1,681
  1,852
  2,031
  2,218
  2,413
  2,615
  2,826
  3,045
  3,273
  3,509
  3,755
  4,010
  4,276
  4,553
  4,840
  5,139
  5,451
  5,776
  6,115
  6,468
Funds from operations, $m
  1,043
  988
  1,156
  1,342
  1,546
  1,767
  2,006
  2,261
  2,532
  2,819
  3,122
  3,423
  3,756
  4,105
  4,468
  4,847
  5,241
  5,651
  6,077
  6,520
  6,980
  7,459
  7,956
  8,473
  9,010
  9,570
  10,152
  10,759
  11,391
  12,050
  12,738
Change in working capital, $m
  -57
  290
  326
  361
  396
  431
  465
  499
  531
  563
  594
  625
  655
  685
  715
  745
  775
  806
  838
  871
  905
  941
  978
  1,017
  1,057
  1,100
  1,145
  1,193
  1,243
  1,296
  1,352
Cash from operations, $m
  1,100
  698
  830
  981
  1,150
  1,336
  1,540
  1,762
  2,001
  2,257
  2,528
  2,798
  3,101
  3,420
  3,754
  4,102
  4,466
  4,845
  5,239
  5,649
  6,075
  6,518
  6,978
  7,456
  7,953
  8,469
  9,007
  9,566
  10,148
  10,755
  11,386
Maintenance CAPEX, $m
  0
  -353
  -429
  -514
  -609
  -712
  -825
  -946
  -1,077
  -1,216
  -1,363
  -1,518
  -1,681
  -1,852
  -2,031
  -2,218
  -2,413
  -2,615
  -2,826
  -3,045
  -3,273
  -3,509
  -3,755
  -4,010
  -4,276
  -4,553
  -4,840
  -5,139
  -5,451
  -5,776
  -6,115
New CAPEX, $m
  -435
  -944
  -1,056
  -1,171
  -1,285
  -1,397
  -1,508
  -1,616
  -1,721
  -1,824
  -1,925
  -2,024
  -2,122
  -2,219
  -2,316
  -2,413
  -2,512
  -2,613
  -2,716
  -2,823
  -2,933
  -3,049
  -3,169
  -3,295
  -3,427
  -3,566
  -3,712
  -3,866
  -4,028
  -4,200
  -4,380
Cash from investing activities, $m
  -555
  -1,297
  -1,485
  -1,685
  -1,894
  -2,109
  -2,333
  -2,562
  -2,798
  -3,040
  -3,288
  -3,542
  -3,803
  -4,071
  -4,347
  -4,631
  -4,925
  -5,228
  -5,542
  -5,868
  -6,206
  -6,558
  -6,924
  -7,305
  -7,703
  -8,119
  -8,552
  -9,005
  -9,479
  -9,976
  -10,495
Free cash flow, $m
  545
  -600
  -654
  -704
  -744
  -774
  -792
  -800
  -797
  -783
  -759
  -744
  -701
  -651
  -593
  -529
  -458
  -383
  -303
  -219
  -131
  -40
  54
  151
  250
  351
  455
  561
  669
  779
  891
Issuance/(repayment) of debt, $m
  -281
  775
  869
  964
  1,058
  1,150
  1,241
  1,330
  1,417
  1,502
  1,585
  1,666
  1,747
  1,827
  1,906
  1,987
  2,068
  2,151
  2,236
  2,324
  2,415
  2,510
  2,609
  2,712
  2,821
  2,935
  3,056
  3,183
  3,316
  3,457
  3,606
Issuance/(repurchase) of shares, $m
  0
  446
  482
  506
  520
  524
  518
  502
  475
  438
  391
  287
  222
  150
  70
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -332
  1,221
  1,351
  1,470
  1,578
  1,674
  1,759
  1,832
  1,892
  1,940
  1,976
  1,953
  1,969
  1,977
  1,976
  1,987
  2,068
  2,151
  2,236
  2,324
  2,415
  2,510
  2,609
  2,712
  2,821
  2,935
  3,056
  3,183
  3,316
  3,457
  3,606
Total cash flow (excl. dividends), $m
  209
  622
  697
  766
  834
  901
  967
  1,032
  1,095
  1,156
  1,216
  1,209
  1,268
  1,326
  1,384
  1,458
  1,610
  1,768
  1,933
  2,105
  2,284
  2,470
  2,663
  2,863
  3,071
  3,287
  3,511
  3,743
  3,985
  4,236
  4,498
Retained Cash Flow (-), $m
  -358
  -939
  -1,058
  -1,173
  -1,288
  -1,400
  -1,511
  -1,619
  -1,725
  -1,828
  -1,929
  -2,028
  -2,126
  -2,223
  -2,321
  -2,418
  -2,517
  -2,618
  -2,722
  -2,829
  -2,940
  -3,055
  -3,175
  -3,302
  -3,434
  -3,573
  -3,720
  -3,874
  -4,037
  -4,209
  -4,390
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
 
  -318
  -361
  -408
  -454
  -499
  -544
  -588
  -630
  -672
  -713
  -819
  -859
  -898
  -937
  -960
  -908
  -850
  -789
  -724
  -656
  -585
  -513
  -438
  -363
  -286
  -209
  -131
  -52
  28
  108
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
 
  -305
  -331
  -355
  -374
  -387
  -395
  -397
  -394
  -386
  -374
  -389
  -366
  -341
  -315
  -282
  -231
  -185
  -145
  -111
  -83
  -61
  -43
  -29
  -18
  -11
  -6
  -3
  -1
  0
  1
Current shareholders' claim on cash, %
  100
  92.5
  86.4
  81.3
  77.1
  73.6
  70.8
  68.5
  66.6
  65.1
  63.9
  63.2
  62.6
  62.3
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2

Ternium S.A. is a producer of steel products. The Company produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers, steel processors or end users. The Company operates through two segments: Steel and Mining. The Steel segment includes the sales of steel products and the Mining segment includes the sales of iron ore products, which are primarily inter-company. The Steel segment comprises three operating segments: Mexico, the Southern Region and Other Markets. In the steel segment, steel products include slabs, billets and round bars (steel in its basic, semi-finished state), hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plate, hot dipped galvanized and electrogalvanized sheets and pre-painted sheets, steel pipes and tubular products, beams, roll-formed products, and other products. In the mining segment, iron ore is sold as concentrates (fines) and pellets.

FINANCIAL RATIOS  of  TERNIUM ADR (TX)

Valuation Ratios
P/E Ratio 91
Price to Sales 7.5
Price to Book 12.4
Price to Tangible Book
Price to Cash Flow 49.3
Price to Free Cash Flow 81.6
Growth Rates
Sales Growth Rate -8.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.9%
Cap. Spend. - 3 Yr. Gr. Rate -13.2%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 9%
Total Debt to Equity 27.8%
Interest Coverage 16
Management Effectiveness
Return On Assets 7.9%
Ret/ On Assets - 3 Yr. Avg. 1.9%
Return On Total Capital 10.7%
Ret/ On T. Cap. - 3 Yr. Avg. 2.7%
Return On Equity 14.2%
Return On Equity - 3 Yr. Avg. 3.5%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 25.5%
Gross Margin - 3 Yr. Avg. 21.3%
EBITDA Margin 22.2%
EBITDA Margin - 3 Yr. Avg. 13.6%
Operating Margin 15.8%
Oper. Margin - 3 Yr. Avg. 12%
Pre-Tax Margin 15.5%
Pre-Tax Margin - 3 Yr. Avg. 7.2%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. 2%
Effective Tax Rate 36.8%
Eff/ Tax Rate - 3 Yr. Avg. 86.2%
Payout Ratio 29.7%

TX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TX stock intrinsic value calculation we used $7224 million for the last fiscal year's total revenue generated by TERNIUM ADR. The default revenue input number comes from 2016 income statement of TERNIUM 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 TX stock valuation model: a) initial revenue growth rate of 21.5% 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 TX is calculated based on our internal credit rating of TERNIUM 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 TERNIUM 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 TX stock the variable cost ratio is equal to 91.9%.

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 TX 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 5.6% for TERNIUM ADR.

Corporate tax rate of 27% is the nominal tax rate for TERNIUM 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 TX 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 TX are equal to 60.6%.

Life of production assets of 12.4 years is the average useful life of capital assets used in TERNIUM 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 TX is equal to 18.7%. 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 - $4391 million for TERNIUM 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 200.503 million for TERNIUM 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 TERNIUM ADR at the current share price and the inputted number of shares is $5.5 billion.

RELATED COMPANIES Price Int.Val. Rating
MT ArcelorMittal 28.00 6.09  str.sell
TS Tenaris ADR 28.55 4.19  str.sell
GGB Gerdau ADR 3.21 0.66  str.sell
SIM Grupo Simec AD 10.00 2.39  str.sell
VALE Vale ADR 10.11 1.73  str.sell
PKX POSCO ADR 71.18 25.26  str.sell
SID Companhia Side 2.33 1.44  str.sell

COMPANY NEWS

▶ Tenaris Announces 2017 Third Quarter Results   [Nov-01-17 04:45PM  Marketwired]
▶ Ternium Announces CEO Succession   [Oct-31-17 04:30PM  Business Wire]
▶ All You Need To Know About Ternium SAs (TX) Financial Health   [Oct-19-17 02:37PM  Simply Wall St.]
▶ Is There Now An Opportunity In Ternium SA (TX)?   [Sep-08-17 04:02PM  Simply Wall St.]
▶ ETFs with exposure to Ternium SA : August 30, 2017   [Aug-29-17 08:53PM  Capital Cube]
▶ Tenaris Announces 2017 Second Quarter Results   [Aug-02-17 04:31PM  Marketwired]
▶ Steel Stock With 258% EPS Growth Edges Closer To Breakout   [Jul-11-17 04:19PM  Investor's Business Daily]
▶ New Strong Buy Stocks for July 7th   [Jul-07-17 10:31AM  Zacks]
▶ Is Ternium (TX) a Great Growth Stock?   [Jul-06-17 08:39AM  Zacks]
▶ Top Ranked Value Stocks to Buy for July 5th   [Jul-05-17 09:07AM  Zacks]
▶ Steel Stock Shows Renewed Strength And 258% Growth   [01:11PM  Investor's Business Daily]
▶ Steel Stock With 360% Earnings Growth Tests Its Mettle   [Jun-26-17 04:04PM  Investor's Business Daily]
▶ Top Ranked Income Stocks to Buy for May 19th   [May-19-17 10:27AM  Zacks]
▶ Top Ranked Income Stocks to Buy for May 17th   [May-17-17 07:38AM  Zacks]
▶ Top Ranked Income Stocks to Buy for May 15th   [May-15-17 10:33AM  Zacks]
▶ What to Make of ArcelorMittals 1Q17 Performance   [May-12-17 11:05AM  Market Realist]
▶ Top Ranked Income Stocks to Buy for May 11th   [May-11-17 10:26AM  Zacks]
▶ Ternium Files 2016 Form 20-F   [May-01-17 04:43PM  Business Wire]
▶ Tenaris Announces 2017 First Quarter Results   [Apr-26-17 09:11PM  Marketwired]
▶ No. 1 Steel Stock With 258% EPS Growth May Forge New Breakout   [12:18PM  Investor's Business Daily]
▶ Ternium Announces First Quarter 2017 Results   [Apr-25-17 04:15PM  Marketwired]
▶ Top Ranked Income Stocks to Buy for April 19th   [Apr-19-17 10:48AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for April 18th   [Apr-18-17 12:19PM  Zacks]
▶ Top Ranked Income Stocks to Buy for April 17th   [Apr-17-17 11:37AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for April 13th   [Apr-13-17 12:22PM  Zacks]
▶ Top Ranked Income Stocks to Buy for April 12th   [Apr-12-17 10:53AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for April 11th   [Apr-11-17 11:50AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for April 5th   [Apr-05-17 11:10AM  Zacks]
▶ Top Ranked Value Stocks to Buy for April 4th   [Apr-04-17 10:51AM  Zacks]
Financial statements of TX
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.