Intrinsic value of Companhia Energetica de Minas Gerais-Cem - CIG

Previous Close

$2.93

  Intrinsic Value

$23.20

stock screener

  Rating & Target

str. buy

+692%

Previous close

$2.93

 
Intrinsic value

$23.20

 
Up/down potential

+692%

 
Rating

str. buy

We calculate the intrinsic value of CIG 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 0001), $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 0.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  13.70
  12.83
  12.05
  11.34
  10.71
  10.14
  9.62
  9.16
  8.75
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
  6.61
  6.45
  6.31
  6.18
  6.06
  5.95
  5.86
  5.77
  5.69
  5.62
  5.56
  5.51
  5.46
  5.41
Revenue, $m
  7,456
  8,413
  9,426
  10,495
  11,619
  12,797
  14,028
  15,313
  16,653
  18,046
  19,496
  21,003
  22,570
  24,197
  25,889
  27,647
  29,475
  31,376
  33,355
  35,414
  37,560
  39,795
  42,126
  44,557
  47,094
  49,743
  52,510
  55,401
  58,423
  61,584
Variable operating expenses, $m
  6,269
  7,030
  7,836
  8,687
  9,581
  10,518
  11,498
  12,521
  13,586
  14,695
  15,512
  16,711
  17,957
  19,252
  20,597
  21,996
  23,451
  24,963
  26,538
  28,176
  29,883
  31,662
  33,516
  35,451
  37,469
  39,577
  41,778
  44,078
  46,483
  48,997
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
  6,269
  7,030
  7,836
  8,687
  9,581
  10,518
  11,498
  12,521
  13,586
  14,695
  15,512
  16,711
  17,957
  19,252
  20,597
  21,996
  23,451
  24,963
  26,538
  28,176
  29,883
  31,662
  33,516
  35,451
  37,469
  39,577
  41,778
  44,078
  46,483
  48,997
Operating income, $m
  1,187
  1,382
  1,590
  1,808
  2,038
  2,278
  2,530
  2,793
  3,067
  3,351
  3,985
  4,293
  4,613
  4,945
  5,291
  5,650
  6,024
  6,413
  6,817
  7,238
  7,677
  8,133
  8,610
  9,107
  9,625
  10,167
  10,732
  11,323
  11,941
  12,587
EBITDA, $m
  1,703
  1,922
  2,153
  2,398
  2,655
  2,924
  3,205
  3,499
  3,805
  4,123
  4,454
  4,799
  5,156
  5,528
  5,915
  6,316
  6,734
  7,168
  7,620
  8,091
  8,581
  9,092
  9,624
  10,180
  10,759
  11,365
  11,997
  12,657
  13,348
  14,070
Interest expense (income), $m
  749
  1,087
  1,374
  1,680
  2,005
  2,347
  2,707
  3,083
  3,477
  3,889
  4,317
  4,763
  5,227
  5,709
  6,211
  6,732
  7,273
  7,835
  8,420
  9,029
  9,662
  10,321
  11,007
  11,723
  12,469
  13,247
  14,058
  14,906
  15,791
  16,717
  17,684
Earnings before tax, $m
  100
  8
  -91
  -197
  -309
  -428
  -553
  -685
  -822
  -966
  -779
  -935
  -1,097
  -1,265
  -1,440
  -1,622
  -1,811
  -2,008
  -2,212
  -2,424
  -2,644
  -2,874
  -3,113
  -3,362
  -3,621
  -3,892
  -4,174
  -4,469
  -4,776
  -5,097
Tax expense, $m
  27
  2
  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
  73
  6
  -91
  -197
  -309
  -428
  -553
  -685
  -822
  -966
  -779
  -935
  -1,097
  -1,265
  -1,440
  -1,622
  -1,811
  -2,008
  -2,212
  -2,424
  -2,644
  -2,874
  -3,113
  -3,362
  -3,621
  -3,892
  -4,174
  -4,469
  -4,776
  -5,097

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  14,506
  16,367
  18,338
  20,418
  22,605
  24,896
  27,292
  29,793
  32,398
  35,110
  37,930
  40,863
  43,910
  47,076
  50,367
  53,788
  57,344
  61,043
  64,893
  68,900
  73,074
  77,423
  81,957
  86,687
  91,623
  96,776
  102,159
  107,784
  113,664
  119,813
Adjusted assets (=assets-cash), $m
  14,506
  16,367
  18,338
  20,418
  22,605
  24,896
  27,292
  29,793
  32,398
  35,110
  37,930
  40,863
  43,910
  47,076
  50,367
  53,788
  57,344
  61,043
  64,893
  68,900
  73,074
  77,423
  81,957
  86,687
  91,623
  96,776
  102,159
  107,784
  113,664
  119,813
Revenue / Adjusted assets
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
Average production assets, $m
  3,035
  3,424
  3,836
  4,272
  4,729
  5,208
  5,709
  6,233
  6,778
  7,345
  7,935
  8,548
  9,186
  9,848
  10,537
  11,252
  11,996
  12,770
  13,575
  14,414
  15,287
  16,197
  17,145
  18,135
  19,167
  20,245
  21,372
  22,548
  23,778
  25,065
Working capital, $m
  -1,752
  -1,977
  -2,215
  -2,466
  -2,730
  -3,007
  -3,297
  -3,599
  -3,913
  -4,241
  -4,582
  -4,936
  -5,304
  -5,686
  -6,084
  -6,497
  -6,927
  -7,373
  -7,838
  -8,322
  -8,827
  -9,352
  -9,900
  -10,471
  -11,067
  -11,690
  -12,340
  -13,019
  -13,729
  -14,472
Total debt, $m
  5,799
  7,091
  8,459
  9,903
  11,420
  13,010
  14,673
  16,408
  18,216
  20,098
  22,056
  24,091
  26,205
  28,403
  30,687
  33,061
  35,529
  38,096
  40,768
  43,549
  46,445
  49,464
  52,610
  55,893
  59,319
  62,895
  66,631
  70,534
  74,615
  78,882
Total liabilities, $m
  10,067
  11,359
  12,727
  14,170
  15,688
  17,278
  18,941
  20,676
  22,484
  24,366
  26,324
  28,359
  30,473
  32,671
  34,955
  37,329
  39,797
  42,364
  45,035
  47,816
  50,713
  53,731
  56,878
  60,161
  63,586
  67,163
  70,899
  74,802
  78,883
  83,150
Total equity, $m
  4,439
  5,008
  5,612
  6,248
  6,917
  7,618
  8,351
  9,117
  9,914
  10,744
  11,607
  12,504
  13,436
  14,405
  15,412
  16,459
  17,547
  18,679
  19,857
  21,083
  22,361
  23,691
  25,079
  26,526
  28,037
  29,614
  31,261
  32,982
  34,781
  36,663
Total liabilities and equity, $m
  14,506
  16,367
  18,339
  20,418
  22,605
  24,896
  27,292
  29,793
  32,398
  35,110
  37,931
  40,863
  43,909
  47,076
  50,367
  53,788
  57,344
  61,043
  64,892
  68,899
  73,074
  77,422
  81,957
  86,687
  91,623
  96,777
  102,160
  107,784
  113,664
  119,813
Debt-to-equity ratio
  1.310
  1.420
  1.510
  1.580
  1.650
  1.710
  1.760
  1.800
  1.840
  1.870
  1.900
  1.930
  1.950
  1.970
  1.990
  2.010
  2.020
  2.040
  2.050
  2.070
  2.080
  2.090
  2.100
  2.110
  2.120
  2.120
  2.130
  2.140
  2.150
  2.150
Adjusted equity ratio
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  73
  6
  -91
  -197
  -309
  -428
  -553
  -685
  -822
  -966
  -779
  -935
  -1,097
  -1,265
  -1,440
  -1,622
  -1,811
  -2,008
  -2,212
  -2,424
  -2,644
  -2,874
  -3,113
  -3,362
  -3,621
  -3,892
  -4,174
  -4,469
  -4,776
  -5,097
Depreciation, amort., depletion, $m
  516
  540
  564
  590
  617
  645
  675
  706
  738
  772
  470
  506
  544
  583
  623
  666
  710
  756
  803
  853
  905
  958
  1,015
  1,073
  1,134
  1,198
  1,265
  1,334
  1,407
  1,483
Funds from operations, $m
  590
  545
  473
  393
  308
  217
  122
  21
  -84
  -194
  -309
  -429
  -553
  -682
  -817
  -956
  -1,101
  -1,252
  -1,408
  -1,571
  -1,740
  -1,916
  -2,099
  -2,289
  -2,487
  -2,694
  -2,909
  -3,134
  -3,369
  -3,614
Change in working capital, $m
  -211
  -225
  -238
  -251
  -264
  -277
  -289
  -302
  -315
  -328
  -341
  -354
  -368
  -382
  -397
  -413
  -430
  -447
  -465
  -484
  -504
  -525
  -548
  -571
  -596
  -622
  -650
  -679
  -710
  -743
Cash from operations, $m
  801
  770
  711
  644
  572
  494
  411
  323
  230
  133
  32
  -75
  -185
  -300
  -419
  -543
  -672
  -805
  -943
  -1,087
  -1,236
  -1,390
  -1,551
  -1,718
  -1,891
  -2,071
  -2,259
  -2,455
  -2,659
  -2,871
Maintenance CAPEX, $m
  -158
  -180
  -203
  -227
  -253
  -280
  -308
  -338
  -369
  -401
  -435
  -470
  -506
  -544
  -583
  -623
  -666
  -710
  -756
  -803
  -853
  -905
  -958
  -1,015
  -1,073
  -1,134
  -1,198
  -1,265
  -1,334
  -1,407
New CAPEX, $m
  -365
  -389
  -412
  -435
  -457
  -479
  -501
  -523
  -545
  -567
  -590
  -613
  -637
  -662
  -688
  -716
  -744
  -774
  -805
  -838
  -873
  -910
  -949
  -989
  -1,033
  -1,078
  -1,126
  -1,177
  -1,230
  -1,286
Cash from investing activities, $m
  -523
  -569
  -615
  -662
  -710
  -759
  -809
  -861
  -914
  -968
  -1,025
  -1,083
  -1,143
  -1,206
  -1,271
  -1,339
  -1,410
  -1,484
  -1,561
  -1,641
  -1,726
  -1,815
  -1,907
  -2,004
  -2,106
  -2,212
  -2,324
  -2,442
  -2,564
  -2,693
Free cash flow, $m
  278
  201
  96
  -18
  -138
  -265
  -398
  -538
  -683
  -835
  -993
  -1,157
  -1,328
  -1,506
  -1,691
  -1,882
  -2,082
  -2,289
  -2,504
  -2,728
  -2,962
  -3,205
  -3,458
  -3,722
  -3,997
  -4,284
  -4,583
  -4,896
  -5,223
  -5,565
Issuance/(repayment) of debt, $m
  1,215
  1,292
  1,368
  1,444
  1,517
  1,590
  1,663
  1,735
  1,808
  1,882
  1,957
  2,035
  2,115
  2,198
  2,284
  2,374
  2,468
  2,567
  2,671
  2,781
  2,897
  3,018
  3,147
  3,282
  3,426
  3,576
  3,736
  3,904
  4,081
  4,267
Issuance/(repurchase) of shares, $m
  460
  564
  694
  833
  978
  1,129
  1,286
  1,450
  1,619
  1,796
  1,642
  1,832
  2,029
  2,234
  2,447
  2,669
  2,900
  3,140
  3,390
  3,650
  3,922
  4,205
  4,501
  4,809
  5,132
  5,469
  5,821
  6,190
  6,575
  6,979
Cash from financing (excl. dividends), $m  
  1,675
  1,856
  2,062
  2,277
  2,495
  2,719
  2,949
  3,185
  3,427
  3,678
  3,599
  3,867
  4,144
  4,432
  4,731
  5,043
  5,368
  5,707
  6,061
  6,431
  6,819
  7,223
  7,648
  8,091
  8,558
  9,045
  9,557
  10,094
  10,656
  11,246
Total cash flow (excl. dividends), $m
  1,953
  2,057
  2,159
  2,259
  2,357
  2,454
  2,551
  2,647
  2,744
  2,843
  2,606
  2,709
  2,815
  2,926
  3,041
  3,160
  3,286
  3,418
  3,557
  3,703
  3,856
  4,019
  4,190
  4,370
  4,561
  4,762
  4,974
  5,197
  5,433
  5,681
Retained Cash Flow (-), $m
  -534
  -569
  -694
  -833
  -978
  -1,129
  -1,286
  -1,450
  -1,619
  -1,796
  -1,642
  -1,832
  -2,029
  -2,234
  -2,447
  -2,669
  -2,900
  -3,140
  -3,390
  -3,650
  -3,922
  -4,205
  -4,501
  -4,809
  -5,132
  -5,469
  -5,821
  -6,190
  -6,575
  -6,979
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
  1,420
  1,487
  1,464
  1,426
  1,379
  1,325
  1,264
  1,197
  1,125
  1,047
  964
  877
  786
  692
  593
  492
  387
  278
  167
  53
  -65
  -186
  -311
  -439
  -571
  -707
  -848
  -993
  -1,142
  -1,297
Discount rate, %
  7.40
  7.77
  8.16
  8.57
  8.99
  9.44
  9.92
  10.41
  10.93
  11.48
  12.05
  12.66
  13.29
  13.95
  14.65
  15.38
  16.15
  16.96
  17.81
  18.70
  19.63
  20.62
  21.65
  22.73
  23.87
  25.06
  26.31
  27.63
  29.01
  30.46
PV of cash for distribution, $m
  1,322
  1,280
  1,157
  1,026
  896
  771
  652
  542
  442
  353
  276
  210
  155
  111
  76
  50
  30
  17
  7
  2
  -2
  -3
  -3
  -3
  -3
  -2
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  85.6
  72.4
  60.5
  49.9
  40.8
  33.1
  26.6
  21.3
  17.0
  13.5
  11.1
  9.1
  7.4
  5.9
  4.8
  3.8
  3.1
  2.4
  1.9
  1.5
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1

Companhia Energetica de Minas Gerais-CEMIG is a holding company that is engaged in the generation, transmission and distribution of electricity. The Company's segments include Generation, Transmission, Distribution, Telecom, Gas and Other. The Company, through its interests in subsidiaries or jointly controlled entities, is engaged in the activities of the construction and operation of systems for sale of electricity, as well as various fields of energy and telecommunications, for the purpose of commercial operation. Its electric power transmission business consists of transporting power from the facilities where it is generated to points of consumption, distribution networks and Free Consumers. Its distribution operation consists of transfers of electricity from distribution substations to final consumers. It is also engaged in businesses, such as telecommunications, energy solutions consulting, and acquisition, transport and distribution of gas and its subproducts and derivatives.

FINANCIAL RATIOS  of  Companhia Energetica de Minas Gerais-Cem (CIG)

Valuation Ratios
P/E Ratio 35.8
Price to Sales 0.6
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 9.9
Price to Free Cash Flow 164.9
Growth Rates
Sales Growth Rate -14.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.6%
Cap. Spend. - 3 Yr. Gr. Rate 3.2%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 80%
Total Debt to Equity 117.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 6%
Ret/ On Assets - 3 Yr. Avg. 8.8%
Return On Total Capital 1.2%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 2.6%
Return On Equity - 3 Yr. Avg. 16.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 23.1%
Gross Margin - 3 Yr. Avg. 28.5%
EBITDA Margin 19%
EBITDA Margin - 3 Yr. Avg. 25.1%
Operating Margin 9.6%
Oper. Margin - 3 Yr. Avg. 19.9%
Pre-Tax Margin 2%
Pre-Tax Margin - 3 Yr. Avg. 13.4%
Net Profit Margin 1.8%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 8.6%
Eff/ Tax Rate - 3 Yr. Avg. 21.7%
Payout Ratio 200.9%

CIG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIG stock intrinsic value calculation we used $6557.53548777 million for the last fiscal year's total revenue generated by Companhia Energetica de Minas Gerais-Cem. The default revenue input number comes from 0001 income statement of Companhia Energetica de Minas Gerais-Cem. 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 CIG stock valuation model: a) initial revenue growth rate of 13.7% 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 7.4%, whose default value for CIG is calculated based on our internal credit rating of Companhia Energetica de Minas Gerais-Cem, 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 Energetica de Minas Gerais-Cem.
    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 CIG 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 CIG 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 23.7% for Companhia Energetica de Minas Gerais-Cem.

Corporate tax rate of 27% is the nominal tax rate for Companhia Energetica de Minas Gerais-Cem. 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 CIG 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 CIG are equal to 40.7%.

Life of production assets of 16.9 years is the average useful life of capital assets used in Companhia Energetica de Minas Gerais-Cem 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 CIG is equal to -23.5%. 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 - $3905.16460284 million for Companhia Energetica de Minas Gerais-Cem - 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 188.713 million for Companhia Energetica de Minas Gerais-Cem 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 Energetica de Minas Gerais-Cem at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

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▶ Cemig Files 2016 20-F Form with the SEC   [May-17-17 02:02PM  PR Newswire]

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