Intrinsic value of Pampa Energia ADR - PAM

Previous Close

$32.91

  Intrinsic Value

$2,384

stock screener

  Rating & Target

str. buy

+999%

Previous close

$32.91

 
Intrinsic value

$2,384

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of PAM 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 1.8

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  4,354
  6,727
  10,061
  14,598
  20,595
  28,314
  38,006
  49,904
  64,214
  81,108
  100,717
  123,137
  148,421
  176,592
  207,641
  241,536
  278,229
  317,661
  359,767
  404,485
  451,756
  501,531
  553,772
  608,455
  665,571
  725,130
  787,154
  851,687
  918,786
  988,528
Variable operating expenses, $m
  2,825
  4,360
  6,516
  9,451
  13,331
  18,323
  24,593
  32,289
  41,545
  52,473
  65,149
  79,651
  96,006
  114,228
  134,312
  156,237
  179,972
  205,479
  232,716
  261,641
  292,219
  324,415
  358,207
  393,579
  430,525
  469,050
  509,171
  550,914
  594,317
  639,429
Fixed operating expenses, $m
  482
  493
  504
  515
  526
  538
  550
  562
  574
  587
  600
  613
  626
  640
  654
  669
  683
  698
  714
  729
  745
  762
  779
  796
  813
  831
  849
  868
  887
  907
Total operating expenses, $m
  3,307
  4,853
  7,020
  9,966
  13,857
  18,861
  25,143
  32,851
  42,119
  53,060
  65,749
  80,264
  96,632
  114,868
  134,966
  156,906
  180,655
  206,177
  233,430
  262,370
  292,964
  325,177
  358,986
  394,375
  431,338
  469,881
  510,020
  551,782
  595,204
  640,336
Operating income, $m
  1,047
  1,874
  3,041
  4,632
  6,738
  9,453
  12,863
  17,053
  22,095
  28,048
  34,969
  42,873
  51,789
  61,723
  72,674
  84,630
  97,573
  111,484
  126,338
  142,115
  158,792
  176,354
  194,786
  214,080
  234,233
  255,248
  277,134
  299,905
  323,582
  348,192
EBITDA, $m
  1,344
  2,328
  3,716
  5,607
  8,111
  11,337
  15,390
  20,368
  26,357
  33,430
  41,641
  51,031
  61,621
  73,422
  86,430
  100,632
  116,006
  132,529
  150,173
  168,912
  188,721
  209,580
  231,473
  254,390
  278,327
  303,288
  329,283
  356,330
  384,452
  413,682
Interest expense (income), $m
  97
  325
  722
  1,300
  2,111
  3,216
  4,676
  6,554
  8,913
  11,809
  15,292
  19,404
  24,177
  29,634
  35,789
  42,645
  50,203
  58,453
  67,384
  76,982
  87,231
  98,115
  109,621
  121,736
  134,452
  147,762
  161,664
  176,161
  191,258
  206,965
  223,297
Earnings before tax, $m
  722
  1,152
  1,741
  2,520
  3,523
  4,777
  6,309
  8,140
  10,285
  12,755
  15,564
  18,695
  22,154
  25,935
  30,029
  34,427
  39,120
  44,099
  49,356
  54,884
  60,677
  66,733
  73,050
  79,628
  86,471
  93,584
  100,973
  108,647
  116,617
  124,894
Tax expense, $m
  195
  311
  470
  680
  951
  1,290
  1,703
  2,198
  2,777
  3,444
  4,202
  5,048
  5,982
  7,002
  8,108
  9,295
  10,562
  11,907
  13,326
  14,819
  16,383
  18,018
  19,723
  21,500
  23,347
  25,268
  27,263
  29,335
  31,487
  33,722
Net income, $m
  527
  841
  1,271
  1,840
  2,572
  3,487
  4,606
  5,942
  7,508
  9,311
  11,362
  13,648
  16,173
  18,932
  21,921
  25,132
  28,558
  32,193
  36,030
  40,065
  44,294
  48,715
  53,326
  58,129
  63,124
  68,316
  73,711
  79,313
  85,130
  91,173

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
  9,034
  13,957
  20,873
  30,286
  42,729
  58,743
  78,850
  103,535
  133,224
  168,273
  208,957
  255,470
  307,928
  366,373
  430,790
  501,112
  577,239
  659,047
  746,406
  839,181
  937,254
  1,040,521
  1,148,904
  1,262,354
  1,380,853
  1,504,418
  1,633,100
  1,766,985
  1,906,196
  2,050,887
Adjusted assets (=assets-cash), $m
  9,034
  13,957
  20,873
  30,286
  42,729
  58,743
  78,850
  103,535
  133,224
  168,273
  208,957
  255,470
  307,928
  366,373
  430,790
  501,112
  577,239
  659,047
  746,406
  839,181
  937,254
  1,040,521
  1,148,904
  1,262,354
  1,380,853
  1,504,418
  1,633,100
  1,766,985
  1,906,196
  2,050,887
Revenue / Adjusted assets
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
  0.482
Average production assets, $m
  3,923
  6,061
  9,065
  13,153
  18,557
  25,511
  34,243
  44,963
  57,857
  73,078
  90,746
  110,946
  133,727
  159,109
  187,084
  217,624
  250,684
  286,212
  324,150
  364,441
  407,033
  451,880
  498,948
  548,218
  599,680
  653,342
  709,226
  767,370
  827,827
  890,663
Working capital, $m
  -231
  -357
  -533
  -774
  -1,092
  -1,501
  -2,014
  -2,645
  -3,403
  -4,299
  -5,338
  -6,526
  -7,866
  -9,359
  -11,005
  -12,801
  -14,746
  -16,836
  -19,068
  -21,438
  -23,943
  -26,581
  -29,350
  -32,248
  -35,275
  -38,432
  -41,719
  -45,139
  -48,696
  -52,392
Total debt, $m
  5,160
  9,286
  15,081
  22,969
  33,397
  46,816
  63,666
  84,352
  109,232
  138,603
  172,696
  211,674
  255,633
  304,610
  358,591
  417,521
  481,316
  549,871
  623,077
  700,824
  783,009
  869,546
  960,372
  1,055,443
  1,154,745
  1,258,292
  1,366,128
  1,478,323
  1,594,982
  1,716,233
Total liabilities, $m
  7,570
  11,696
  17,492
  25,380
  35,807
  49,226
  66,076
  86,762
  111,642
  141,013
  175,106
  214,084
  258,043
  307,021
  361,002
  419,932
  483,726
  552,282
  625,488
  703,234
  785,419
  871,957
  962,782
  1,057,853
  1,157,155
  1,260,702
  1,368,538
  1,480,734
  1,597,392
  1,718,643
Total equity, $m
  1,463
  2,261
  3,381
  4,906
  6,922
  9,516
  12,774
  16,773
  21,582
  27,260
  33,851
  41,386
  49,884
  59,352
  69,788
  81,180
  93,513
  106,766
  120,918
  135,947
  151,835
  168,564
  186,123
  204,501
  223,698
  243,716
  264,562
  286,252
  308,804
  332,244
Total liabilities and equity, $m
  9,033
  13,957
  20,873
  30,286
  42,729
  58,742
  78,850
  103,535
  133,224
  168,273
  208,957
  255,470
  307,927
  366,373
  430,790
  501,112
  577,239
  659,048
  746,406
  839,181
  937,254
  1,040,521
  1,148,905
  1,262,354
  1,380,853
  1,504,418
  1,633,100
  1,766,986
  1,906,196
  2,050,887
Debt-to-equity ratio
  3.530
  4.110
  4.460
  4.680
  4.820
  4.920
  4.980
  5.030
  5.060
  5.080
  5.100
  5.110
  5.120
  5.130
  5.140
  5.140
  5.150
  5.150
  5.150
  5.160
  5.160
  5.160
  5.160
  5.160
  5.160
  5.160
  5.160
  5.160
  5.170
  5.170
Adjusted equity ratio
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162
  0.162

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  527
  841
  1,271
  1,840
  2,572
  3,487
  4,606
  5,942
  7,508
  9,311
  11,362
  13,648
  16,173
  18,932
  21,921
  25,132
  28,558
  32,193
  36,030
  40,065
  44,294
  48,715
  53,326
  58,129
  63,124
  68,316
  73,711
  79,313
  85,130
  91,173
Depreciation, amort., depletion, $m
  297
  454
  675
  976
  1,373
  1,884
  2,526
  3,315
  4,263
  5,382
  6,673
  8,158
  9,833
  11,699
  13,756
  16,002
  18,433
  21,045
  23,835
  26,797
  29,929
  33,226
  36,687
  40,310
  44,094
  48,040
  52,149
  56,424
  60,870
  65,490
Funds from operations, $m
  824
  1,295
  1,946
  2,816
  3,945
  5,372
  7,132
  9,257
  11,771
  14,693
  18,034
  21,805
  26,006
  30,632
  35,677
  41,133
  46,991
  53,238
  59,865
  66,862
  74,223
  81,941
  90,014
  98,439
  107,218
  116,356
  125,859
  135,737
  146,000
  156,663
Change in working capital, $m
  -87
  -126
  -177
  -240
  -318
  -409
  -514
  -631
  -758
  -895
  -1,039
  -1,188
  -1,340
  -1,493
  -1,646
  -1,796
  -1,945
  -2,090
  -2,232
  -2,370
  -2,505
  -2,638
  -2,769
  -2,898
  -3,027
  -3,157
  -3,287
  -3,420
  -3,556
  -3,696
Cash from operations, $m
  910
  1,421
  2,122
  3,056
  4,263
  5,781
  7,646
  9,888
  12,529
  15,589
  19,074
  22,994
  27,346
  32,125
  37,323
  42,930
  48,935
  55,328
  62,096
  69,232
  76,729
  84,579
  92,782
  101,337
  110,245
  119,513
  129,147
  139,157
  149,556
  160,359
Maintenance CAPEX, $m
  -180
  -288
  -446
  -667
  -967
  -1,364
  -1,876
  -2,518
  -3,306
  -4,254
  -5,373
  -6,673
  -8,158
  -9,833
  -11,699
  -13,756
  -16,002
  -18,433
  -21,045
  -23,835
  -26,797
  -29,929
  -33,226
  -36,687
  -40,310
  -44,094
  -48,040
  -52,149
  -56,424
  -60,870
New CAPEX, $m
  -1,471
  -2,138
  -3,003
  -4,088
  -5,404
  -6,954
  -8,732
  -10,720
  -12,894
  -15,221
  -17,668
  -20,200
  -22,781
  -25,382
  -27,975
  -30,540
  -33,061
  -35,528
  -37,938
  -40,291
  -42,591
  -44,847
  -47,069
  -49,269
  -51,462
  -53,662
  -55,884
  -58,144
  -60,457
  -62,837
Cash from investing activities, $m
  -1,651
  -2,426
  -3,449
  -4,755
  -6,371
  -8,318
  -10,608
  -13,238
  -16,200
  -19,475
  -23,041
  -26,873
  -30,939
  -35,215
  -39,674
  -44,296
  -49,063
  -53,961
  -58,983
  -64,126
  -69,388
  -74,776
  -80,295
  -85,956
  -91,772
  -97,756
  -103,924
  -110,293
  -116,881
  -123,707
Free cash flow, $m
  -741
  -1,006
  -1,327
  -1,698
  -2,108
  -2,538
  -2,962
  -3,351
  -3,670
  -3,886
  -3,968
  -3,879
  -3,593
  -3,090
  -2,351
  -1,366
  -127
  1,367
  3,113
  5,107
  7,340
  9,804
  12,487
  15,380
  18,473
  21,757
  25,223
  28,864
  32,675
  36,653
Issuance/(repayment) of debt, $m
  2,838
  4,126
  5,796
  7,888
  10,427
  13,419
  16,850
  20,686
  24,880
  29,371
  34,093
  38,978
  43,959
  48,977
  53,981
  58,930
  63,794
  68,556
  73,206
  77,746
  82,185
  86,538
  90,825
  95,071
  99,302
  103,547
  107,835
  112,196
  116,658
  121,251
Issuance/(repurchase) of shares, $m
  23
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,861
  4,126
  5,796
  7,888
  10,427
  13,419
  16,850
  20,686
  24,880
  29,371
  34,093
  38,978
  43,959
  48,977
  53,981
  58,930
  63,794
  68,556
  73,206
  77,746
  82,185
  86,538
  90,825
  95,071
  99,302
  103,547
  107,835
  112,196
  116,658
  121,251
Total cash flow (excl. dividends), $m
  2,119
  3,120
  4,469
  6,190
  8,319
  10,881
  13,888
  17,335
  21,209
  25,484
  30,125
  35,099
  40,366
  45,887
  51,630
  57,564
  63,667
  69,923
  76,319
  82,853
  89,525
  96,341
  103,312
  110,451
  117,776
  125,304
  133,058
  141,060
  149,334
  157,904
Retained Cash Flow (-), $m
  -549
  -798
  -1,120
  -1,525
  -2,016
  -2,594
  -3,257
  -3,999
  -4,810
  -5,678
  -6,591
  -7,535
  -8,498
  -9,468
  -10,435
  -11,392
  -12,333
  -13,253
  -14,152
  -15,030
  -15,888
  -16,729
  -17,558
  -18,379
  -19,197
  -20,018
  -20,846
  -21,689
  -22,552
  -23,440
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
  1,570
  2,322
  3,348
  4,665
  6,303
  8,287
  10,630
  13,336
  16,400
  19,807
  23,534
  27,564
  31,868
  36,419
  41,194
  46,172
  51,335
  56,670
  62,167
  67,823
  73,637
  79,612
  85,754
  92,072
  98,579
  105,287
  112,212
  119,371
  126,782
  134,464
Discount rate, %
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
  1,481
  2,055
  2,763
  3,566
  4,433
  5,323
  6,186
  6,973
  7,636
  8,134
  8,438
  8,536
  8,426
  8,122
  7,648
  7,040
  6,335
  5,573
  4,793
  4,029
  3,310
  2,655
  2,080
  1,589
  1,183
  859
  606
  416
  277
  179
Current shareholders' claim on cash, %
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7
  98.7

Pampa Energia S.A. is an integrated electricity company. The Company, through its subsidiaries, is engaged in the generation, transmission and distribution of electricity in Argentina. Its segments include generation, transmission, distribution, oil and gas, and holding and others. Its generation segment includes a direct and indirect equity interest in Central Piedra Buena S.A., Central Termica Guemes S.A., Central Termica Loma de la Lata S.A. and Pampa Comercializadora S.A, among others, and investments in companies in the electricity generation sector. Its transmission segment includes an indirect equity interest through Compania Inversora en Transmision Electrica Citelec S.A. Its distribution segment includes an indirect equity interest in Electricidad Argentina S.A. and Empresa Distribuidora y Comercializadora Norte S.A. Its Oil and gas segment includes a direct interest in Petrolera Pampa S.A. Its holding and others segment includes financial investment operations, among others.

FINANCIAL RATIOS  of  Pampa Energia ADR (PAM)

Valuation Ratios
P/E Ratio -55810.8
Price to Sales 27.9
Price to Book 78.9
Price to Tangible Book
Price to Cash Flow 145.7
Price to Free Cash Flow -724.8
Growth Rates
Sales Growth Rate 337.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 49.8%
Cap. Spend. - 3 Yr. Gr. Rate 43%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 138.3%
Total Debt to Equity 235.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.5%
Ret/ On Assets - 3 Yr. Avg. 8.3%
Return On Total Capital -0.1%
Ret/ On T. Cap. - 3 Yr. Avg. 12.8%
Return On Equity -0.2%
Return On Equity - 3 Yr. Avg. 30.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 37.1%
Gross Margin - 3 Yr. Avg. 14.8%
EBITDA Margin 10.2%
EBITDA Margin - 3 Yr. Avg. 39.7%
Operating Margin 7.1%
Oper. Margin - 3 Yr. Avg. 24%
Pre-Tax Margin -4.3%
Pre-Tax Margin - 3 Yr. Avg. 22.6%
Net Profit Margin -0%
Net Profit Margin - 3 Yr. Avg. 18.3%
Effective Tax Rate 81.4%
Eff/ Tax Rate - 3 Yr. Avg. 36.6%
Payout Ratio -500%

PAM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PAM stock intrinsic value calculation we used $2721.45945946 million for the last fiscal year's total revenue generated by Pampa Energia ADR. The default revenue input number comes from 0001 income statement of Pampa Energia 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 PAM stock valuation model: a) initial revenue growth rate of 60% 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%, whose default value for PAM is calculated based on our internal credit rating of Pampa Energia 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 Pampa Energia 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 PAM stock the variable cost ratio is equal to 65%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $472 million in the base year in the intrinsic value calculation for PAM 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 14% for Pampa Energia ADR.

Corporate tax rate of 27% is the nominal tax rate for Pampa Energia 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 PAM 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 PAM are equal to 90.1%.

Life of production assets of 13.6 years is the average useful life of capital assets used in Pampa Energia 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 PAM is equal to -5.3%. 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 - $914.054054054 million for Pampa Energia 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 54.226 million for Pampa Energia 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 Pampa Energia ADR at the current share price and the inputted number of shares is $1.8 billion.

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COMPANY NEWS

▶ Pampa: 3Q Earnings Snapshot   [Nov-12-18 05:47PM  Associated Press]
▶ Pampa Energia SA to Host Earnings Call   [Aug-14-18 09:00AM  ACCESSWIRE]
▶ Pampa: 2Q Earnings Snapshot   [Aug-13-18 07:54PM  Associated Press]
▶ Pampa posts 4Q profit   [Mar-13-18 05:03AM  Associated Press]
▶ Bear of the Day: El Paso Energy (EE)   [Jan-30-18 07:00AM  Zacks]
▶ [$$] Argentina Makes Progress on Economic Reforms   [Sep-15-17 11:35PM  Barrons.com]
▶ Pampa reports 2Q loss   [Aug-11-17 07:33PM  Associated Press]
▶ ETFs with exposure to Pampa Energía SA : July 31, 2017   [Jul-31-17 05:02PM  Capital Cube]
▶ ETFs with exposure to Pampa Energía SA : July 11, 2017   [Jul-11-17 02:54PM  Capital Cube]
▶ Oil Down, Everything Else Up on the Day   [May-25-17 06:50PM  Zacks]
▶ Pampa posts 1Q profit   [May-12-17 05:01AM  Associated Press]
▶ Top Ranked Momentum Stocks to Buy for May 3rd   [May-03-17 11:00AM  Zacks]
▶ ETFs with exposure to Pampa Energía SA : April 13, 2017   [Apr-13-17 12:37PM  Capital Cube]
▶ New Strong Buy Stocks for April 12th   [Apr-12-17 10:09AM  Zacks]
▶ Pampa Energias Mindlin Says Vaca Muerta Will Boom   [Apr-07-17 12:34PM  Bloomberg]
▶ Pampa posts 4Q profit   [Mar-14-17 05:16PM  Associated Press]
▶ Pampas Mindlin: Current Bond Sale is Testing Market   [Jan-10-17 02:45PM  Bloomberg]
▶ LATAM CLOSE-No LatAm deals in first week of 2017   [Jan-06-17 01:40PM  Reuters]
▶ Hedge Funds Are Dumping Norbord Inc. (OSB)   [Dec-12-16 08:18AM  Insider Monkey]
▶ Hedge Funds Are Dumping Norbord Inc. (OSB)   [08:18AM  at Insider Monkey]
▶ Hedge Funds Are Betting On Rowan Companies PLC (RDC)   [Dec-05-16 02:28PM  at Insider Monkey]
▶ Hedge Funds Are Gaining Confidence in Cavium Inc (CAVM)   [Nov-27-16 06:15PM  at Insider Monkey]

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