Intrinsic value of Unit - UNT

Previous Close

$20.34

  Intrinsic Value

$5.32

stock screener

  Rating & Target

str. sell

-74%

Previous close

$20.34

 
Intrinsic value

$5.32

 
Up/down potential

-74%

 
Rating

str. sell

We calculate the intrinsic value of UNT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -29.51
  22.90
  21.11
  19.50
  18.05
  16.74
  15.57
  14.51
  13.56
  12.71
  11.93
  11.24
  10.62
  10.06
  9.55
  9.09
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.84
Revenue, $m
  602
  740
  896
  1,071
  1,264
  1,476
  1,705
  1,953
  2,218
  2,500
  2,798
  3,112
  3,443
  3,789
  4,151
  4,528
  4,922
  5,331
  5,757
  6,199
  6,659
  7,137
  7,634
  8,150
  8,687
  9,245
  9,826
  10,431
  11,061
  11,718
  12,403
Variable operating expenses, $m
 
  2,175
  2,633
  3,145
  3,712
  4,332
  5,006
  5,731
  6,508
  7,334
  8,208
  9,124
  10,093
  11,108
  12,169
  13,275
  14,428
  15,628
  16,876
  18,173
  19,522
  20,922
  22,378
  23,892
  25,465
  27,102
  28,806
  30,579
  32,426
  34,351
  36,359
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
  747
  2,175
  2,633
  3,145
  3,712
  4,332
  5,006
  5,731
  6,508
  7,334
  8,208
  9,124
  10,093
  11,108
  12,169
  13,275
  14,428
  15,628
  16,876
  18,173
  19,522
  20,922
  22,378
  23,892
  25,465
  27,102
  28,806
  30,579
  32,426
  34,351
  36,359
Operating income, $m
  -144
  -1,435
  -1,737
  -2,075
  -2,448
  -2,857
  -3,300
  -3,778
  -4,290
  -4,834
  -5,411
  -6,012
  -6,650
  -7,319
  -8,018
  -8,747
  -9,507
  -10,297
  -11,119
  -11,974
  -12,862
  -13,785
  -14,745
  -15,742
  -16,779
  -17,857
  -18,979
  -20,148
  -21,365
  -22,633
  -23,956
EBITDA, $m
  64
  -1,180
  -1,429
  -1,708
  -2,016
  -2,354
  -2,720
  -3,115
  -3,537
  -3,987
  -4,463
  -4,964
  -5,491
  -6,044
  -6,621
  -7,223
  -7,850
  -8,503
  -9,182
  -9,888
  -10,622
  -11,384
  -12,176
  -12,999
  -13,856
  -14,746
  -15,673
  -16,638
  -17,643
  -18,690
  -19,783
Interest expense (income), $m
  36
  34
  46
  59
  75
  92
  110
  130
  152
  175
  200
  226
  253
  282
  313
  344
  377
  412
  448
  485
  524
  564
  606
  649
  695
  742
  791
  841
  894
  950
  1,007
Earnings before tax, $m
  -207
  -1,469
  -1,783
  -2,134
  -2,523
  -2,948
  -3,411
  -3,909
  -4,442
  -5,009
  -5,610
  -6,238
  -6,903
  -7,601
  -8,330
  -9,091
  -9,884
  -10,709
  -11,567
  -12,459
  -13,386
  -14,349
  -15,351
  -16,391
  -17,473
  -18,599
  -19,770
  -20,989
  -22,259
  -23,583
  -24,963
Tax expense, $m
  -71
  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
  -136
  -1,469
  -1,783
  -2,134
  -2,523
  -2,948
  -3,411
  -3,909
  -4,442
  -5,009
  -5,610
  -6,238
  -6,903
  -7,601
  -8,330
  -9,091
  -9,884
  -10,709
  -11,567
  -12,459
  -13,386
  -14,349
  -15,351
  -16,391
  -17,473
  -18,599
  -19,770
  -20,989
  -22,259
  -23,583
  -24,963

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1
  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
  2,479
  3,045
  3,687
  4,406
  5,202
  6,073
  7,018
  8,037
  9,127
  10,286
  11,514
  12,808
  14,168
  15,593
  17,082
  18,635
  20,254
  21,939
  23,690
  25,511
  27,404
  29,370
  31,414
  33,539
  35,748
  38,045
  40,437
  42,926
  45,519
  48,222
  51,039
Adjusted assets (=assets-cash), $m
  2,478
  3,045
  3,687
  4,406
  5,202
  6,073
  7,018
  8,037
  9,127
  10,286
  11,514
  12,808
  14,168
  15,593
  17,082
  18,635
  20,254
  21,939
  23,690
  25,511
  27,404
  29,370
  31,414
  33,539
  35,748
  38,045
  40,437
  42,926
  45,519
  48,222
  51,039
Revenue / Adjusted assets
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
Average production assets, $m
  2,431
  2,988
  3,618
  4,324
  5,104
  5,959
  6,887
  7,886
  8,955
  10,093
  11,298
  12,568
  13,902
  15,300
  16,761
  18,286
  19,874
  21,527
  23,246
  25,033
  26,890
  28,819
  30,825
  32,909
  35,077
  37,332
  39,678
  42,121
  44,665
  47,317
  50,082
Working capital, $m
  -44
  -55
  -67
  -80
  -95
  -111
  -128
  -146
  -166
  -187
  -210
  -233
  -258
  -284
  -311
  -340
  -369
  -400
  -432
  -465
  -499
  -535
  -573
  -611
  -652
  -693
  -737
  -782
  -830
  -879
  -930
Total debt, $m
  820
  1,115
  1,449
  1,822
  2,235
  2,687
  3,177
  3,706
  4,272
  4,874
  5,511
  6,182
  6,888
  7,628
  8,401
  9,207
  10,047
  10,921
  11,830
  12,775
  13,758
  14,778
  15,839
  16,942
  18,088
  19,281
  20,522
  21,814
  23,160
  24,562
  26,024
Total liabilities, $m
  1,285
  1,580
  1,914
  2,287
  2,700
  3,152
  3,642
  4,171
  4,737
  5,339
  5,976
  6,647
  7,353
  8,093
  8,866
  9,672
  10,512
  11,386
  12,295
  13,240
  14,223
  15,243
  16,304
  17,407
  18,553
  19,746
  20,987
  22,279
  23,625
  25,027
  26,489
Total equity, $m
  1,194
  1,464
  1,774
  2,119
  2,502
  2,921
  3,376
  3,866
  4,390
  4,948
  5,538
  6,161
  6,815
  7,500
  8,216
  8,964
  9,742
  10,552
  11,395
  12,271
  13,181
  14,127
  15,110
  16,132
  17,195
  18,300
  19,450
  20,647
  21,895
  23,195
  24,550
Total liabilities and equity, $m
  2,479
  3,044
  3,688
  4,406
  5,202
  6,073
  7,018
  8,037
  9,127
  10,287
  11,514
  12,808
  14,168
  15,593
  17,082
  18,636
  20,254
  21,938
  23,690
  25,511
  27,404
  29,370
  31,414
  33,539
  35,748
  38,046
  40,437
  42,926
  45,520
  48,222
  51,039
Debt-to-equity ratio
  0.687
  0.760
  0.820
  0.860
  0.890
  0.920
  0.940
  0.960
  0.970
  0.990
  1.000
  1.000
  1.010
  1.020
  1.020
  1.030
  1.030
  1.030
  1.040
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.060
Adjusted equity ratio
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -136
  -1,469
  -1,783
  -2,134
  -2,523
  -2,948
  -3,411
  -3,909
  -4,442
  -5,009
  -5,610
  -6,238
  -6,903
  -7,601
  -8,330
  -9,091
  -9,884
  -10,709
  -11,567
  -12,459
  -13,386
  -14,349
  -15,351
  -16,391
  -17,473
  -18,599
  -19,770
  -20,989
  -22,259
  -23,583
  -24,963
Depreciation, amort., depletion, $m
  208
  255
  308
  367
  432
  503
  580
  663
  753
  847
  948
  1,047
  1,159
  1,275
  1,397
  1,524
  1,656
  1,794
  1,937
  2,086
  2,241
  2,402
  2,569
  2,742
  2,923
  3,111
  3,306
  3,510
  3,722
  3,943
  4,173
Funds from operations, $m
  274
  -1,214
  -1,475
  -1,767
  -2,091
  -2,445
  -2,830
  -3,245
  -3,689
  -4,162
  -4,663
  -5,190
  -5,745
  -6,326
  -6,934
  -7,567
  -8,228
  -8,915
  -9,630
  -10,373
  -11,145
  -11,948
  -12,782
  -13,649
  -14,550
  -15,488
  -16,463
  -17,479
  -18,537
  -19,640
  -20,790
Change in working capital, $m
  34
  -10
  -12
  -13
  -14
  -16
  -17
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
Cash from operations, $m
  240
  -1,203
  -1,463
  -1,754
  -2,076
  -2,430
  -2,813
  -3,227
  -3,670
  -4,141
  -4,640
  -5,167
  -5,720
  -6,300
  -6,906
  -7,539
  -8,198
  -8,884
  -9,598
  -10,340
  -11,111
  -11,912
  -12,745
  -13,610
  -14,510
  -15,446
  -16,420
  -17,434
  -18,490
  -19,591
  -20,738
Maintenance CAPEX, $m
  0
  -203
  -249
  -302
  -360
  -425
  -497
  -574
  -657
  -746
  -841
  -941
  -1,047
  -1,159
  -1,275
  -1,397
  -1,524
  -1,656
  -1,794
  -1,937
  -2,086
  -2,241
  -2,402
  -2,569
  -2,742
  -2,923
  -3,111
  -3,306
  -3,510
  -3,722
  -3,943
New CAPEX, $m
  -187
  -557
  -631
  -706
  -780
  -855
  -928
  -999
  -1,069
  -1,138
  -1,205
  -1,270
  -1,334
  -1,398
  -1,461
  -1,524
  -1,588
  -1,653
  -1,719
  -1,787
  -1,857
  -1,930
  -2,005
  -2,085
  -2,168
  -2,255
  -2,346
  -2,443
  -2,544
  -2,652
  -2,765
Cash from investing activities, $m
  -111
  -760
  -880
  -1,008
  -1,140
  -1,280
  -1,425
  -1,573
  -1,726
  -1,884
  -2,046
  -2,211
  -2,381
  -2,557
  -2,736
  -2,921
  -3,112
  -3,309
  -3,513
  -3,724
  -3,943
  -4,171
  -4,407
  -4,654
  -4,910
  -5,178
  -5,457
  -5,749
  -6,054
  -6,374
  -6,708
Free cash flow, $m
  129
  -1,963
  -2,343
  -2,761
  -3,217
  -3,709
  -4,237
  -4,800
  -5,396
  -6,025
  -6,686
  -7,378
  -8,102
  -8,857
  -9,643
  -10,460
  -11,310
  -12,194
  -13,111
  -14,064
  -15,054
  -16,082
  -17,152
  -18,263
  -19,420
  -20,624
  -21,877
  -23,183
  -24,545
  -25,964
  -27,446
Issuance/(repayment) of debt, $m
  -129
  295
  334
  373
  413
  452
  491
  529
  566
  602
  637
  672
  706
  739
  773
  806
  840
  874
  909
  945
  982
  1,021
  1,061
  1,103
  1,146
  1,193
  1,241
  1,292
  1,346
  1,403
  1,462
Issuance/(repurchase) of shares, $m
  0
  1,740
  2,092
  2,480
  2,905
  3,367
  3,865
  4,399
  4,966
  5,567
  6,201
  6,860
  7,558
  8,286
  9,047
  9,839
  10,663
  11,519
  12,410
  13,335
  14,296
  15,295
  16,334
  17,413
  18,536
  19,704
  20,920
  22,187
  23,507
  24,883
  26,318
Cash from financing (excl. dividends), $m  
  -129
  2,035
  2,426
  2,853
  3,318
  3,819
  4,356
  4,928
  5,532
  6,169
  6,838
  7,532
  8,264
  9,025
  9,820
  10,645
  11,503
  12,393
  13,319
  14,280
  15,278
  16,316
  17,395
  18,516
  19,682
  20,897
  22,161
  23,479
  24,853
  26,286
  27,780
Total cash flow (excl. dividends), $m
  0
  73
  83
  92
  101
  110
  119
  127
  136
  144
  152
  154
  161
  169
  177
  185
  192
  200
  208
  216
  225
  234
  243
  252
  262
  273
  284
  296
  308
  321
  335
Retained Cash Flow (-), $m
  120
  -1,740
  -2,092
  -2,480
  -2,905
  -3,367
  -3,865
  -4,399
  -4,966
  -5,567
  -6,201
  -6,860
  -7,558
  -8,286
  -9,047
  -9,839
  -10,663
  -11,519
  -12,410
  -13,335
  -14,296
  -15,295
  -16,334
  -17,413
  -18,536
  -19,704
  -20,920
  -22,187
  -23,507
  -24,883
  -26,318
Prev. year cash balance distribution, $m
 
  1
  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
 
  -1,666
  -2,009
  -2,388
  -2,804
  -3,257
  -3,747
  -4,271
  -4,830
  -5,423
  -6,049
  -6,707
  -7,396
  -8,117
  -8,870
  -9,654
  -10,470
  -11,319
  -12,202
  -13,119
  -14,072
  -15,062
  -16,091
  -17,161
  -18,273
  -19,431
  -20,636
  -21,891
  -23,199
  -24,562
  -25,984
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  -1,559
  -1,747
  -1,917
  -2,062
  -2,178
  -2,258
  -2,300
  -2,302
  -2,264
  -2,188
  -2,078
  -1,939
  -1,778
  -1,600
  -1,414
  -1,226
  -1,042
  -868
  -708
  -565
  -441
  -336
  -250
  -181
  -128
  -88
  -59
  -38
  -24
  -14
Current shareholders' claim on cash, %
  100
  38.3
  14.9
  5.8
  2.3
  0.9
  0.4
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Unit Corporation is an oil and natural gas contract drilling company. The Company has operations in the exploration and production and mid-stream areas. The Company operates through three segments: Oil and Natural Gas, Contract Drilling and Mid-Stream. It is primarily engaged in the exploration, development, acquisition, and production of oil and natural gas properties, the land contract drilling of natural gas and oil wells, and the buying, selling, gathering, processing and treating of natural gas. Its Oil and Natural Gas operations are carried out by its subsidiary Unit Petroleum Company. Contract Drilling operations are carried out by its subsidiary Unit Drilling Company. Its drills onshore oil and natural gas wells for its own account, as well as for other oil and natural gas companies. Its Mid-Stream operations are carried out by its subsidiary Superior Pipeline Company, L.L.C. Its mid-stream operations consist of buying, selling, gathering, processing and treating natural gas.

FINANCIAL RATIOS  of  Unit (UNT)

Valuation Ratios
P/E Ratio -7.7
Price to Sales 1.7
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 4.4
Price to Free Cash Flow 19.8
Growth Rates
Sales Growth Rate -29.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -66.7%
Cap. Spend. - 3 Yr. Gr. Rate -23.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 68.7%
Total Debt to Equity 68.7%
Interest Coverage -5
Management Effectiveness
Return On Assets -4.3%
Ret/ On Assets - 3 Yr. Avg. -9.6%
Return On Total Capital -6.4%
Ret/ On T. Cap. - 3 Yr. Avg. -13.4%
Return On Equity -10.8%
Return On Equity - 3 Yr. Avg. -20.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 42.5%
Gross Margin - 3 Yr. Avg. 21.7%
EBITDA Margin 6.1%
EBITDA Margin - 3 Yr. Avg. -34.2%
Operating Margin -24.1%
Oper. Margin - 3 Yr. Avg. -68.3%
Pre-Tax Margin -34.4%
Pre-Tax Margin - 3 Yr. Avg. -71.7%
Net Profit Margin -22.6%
Net Profit Margin - 3 Yr. Avg. -45.1%
Effective Tax Rate 34.3%
Eff/ Tax Rate - 3 Yr. Avg. 37%
Payout Ratio 0%

UNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UNT stock intrinsic value calculation we used $602 million for the last fiscal year's total revenue generated by Unit. The default revenue input number comes from 2016 income statement of Unit. 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 UNT stock valuation model: a) initial revenue growth rate of 22.9% 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 6.9%, whose default value for UNT is calculated based on our internal credit rating of Unit, 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 Unit.
    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 UNT stock the variable cost ratio is equal to 294.2%.

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 UNT 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 4.1% for Unit.

Corporate tax rate of 27% is the nominal tax rate for Unit. 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 UNT 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 UNT are equal to 403.8%.

Life of production assets of 12 years is the average useful life of capital assets used in Unit 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 UNT is equal to -7.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1194 million for Unit - 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 53.182 million for Unit 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 Unit at the current share price and the inputted number of shares is $1.1 billion.

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COMPANY NEWS

▶ Stocks Showing Improving Market Leadership: Unit Earns 83 RS Rating   [Jan-18-18 03:00AM  Investor's Business Daily]
▶ Stocks Showing Improved Relative Strength: Unit   [Jan-12-18 03:00AM  Investor's Business Daily]
▶ ETFs with exposure to Unit Corp. : December 14, 2017   [Dec-14-17 02:14PM  Capital Cube]
▶ Unit Corporation to Participate in Upcoming Conferences   [Nov-29-17 04:55PM  Business Wire]
▶ Unit Corporation Announces Newly Appointed Officer   [Nov-27-17 09:50AM  Business Wire]
▶ Stocks Flashing Renewed Technical Strength: Unit   [Nov-13-17 03:00AM  Investor's Business Daily]
▶ Unit Shows Improved Relative Strength; Still Shy Of Benchmark   [Nov-10-17 03:00AM  Investor's Business Daily]
▶ Unit misses 3Q profit forecasts   [Nov-02-17 08:37AM  Associated Press]
▶ Unit Corp. Value Analysis (NYSE:UNT) : October 23, 2017   [Oct-23-17 11:49AM  Capital Cube]
▶ ETFs with exposure to Unit Corp. : October 18, 2017   [Oct-18-17 10:03AM  Capital Cube]
▶ ETFs with exposure to Unit Corp. : September 28, 2017   [Sep-28-17 10:20AM  Capital Cube]
▶ Arnold Van Den Berg: Bullish on Oil and Gas   [Sep-25-17 06:20PM  GuruFocus.com]
▶ ETFs with exposure to Unit Corp. : September 7, 2017   [Sep-07-17 02:06PM  Capital Cube]
▶ Unit Corporation Announces Management Promotions   [Aug-29-17 03:00PM  Business Wire]
▶ Unit beats 2Q profit forecasts   [Aug-03-17 09:46AM  Associated Press]
▶ 3 Stocks That Could Lose You a Lot of Money   [Jul-18-17 03:09PM  Motley Fool]
▶ Unit Corp. Value Analysis (NYSE:UNT) : July 5, 2017   [Jul-05-17 02:00PM  Capital Cube]
▶ Unit Corporation to Participate in Upcoming Conferences   [May-31-17 04:42PM  Business Wire]
▶ Unit misses 1Q profit forecasts   [May-04-17 09:16AM  Associated Press]
▶ 2 Stocks to Avoid (and 1 to Buy)   [Apr-25-17 12:00PM  Motley Fool]
▶ Conference-OGIS New York for Unit Corp.   [Mar-08-17 05:56PM  at Company Spotlight]
▶ Unit Corporation to Participate in Upcoming Conferences   [Feb-22-17 02:52PM  Business Wire]
▶ Do Hedge Funds Love Unit Corporation (UNT)?   [Dec-04-16 02:38PM  at Insider Monkey]
▶ Unit Corporation to Participate in Upcoming Conferences   [Nov-21-16 03:36PM  Business Wire]
▶ Oil patch is starting to heat up for investors   [Oct-04-16 12:57PM  at MarketWatch]
▶ How Risky Is Helmerich & Payne, Inc.?   [Sep-14-16 12:44PM  at Motley Fool]
Financial statements of UNT
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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