New Risk • May 07New major risk - Financial positionThe company's debt is not well covered by operating cash flow. Currently running at an operating cash loss. This is considered a major risk. If the company's operating cash flows are too small relative to the size of their debt, it increases their balance sheet risk. The company has less cash from operations to cover its expenses from servicing large debt and it increases the risk of liquidity issues. It also extends the time it would take for the company to pay back the debt in full, meaning it may not be able to easily pay it all off in a distress scenario. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (currently running at an operating cash loss). Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Paying a dividend despite having no free cash flows. Minor Risk Large one-off items impacting financial results.
Buy Or Sell Opportunity • Mar 10Now 21% undervaluedOver the last 90 days, the stock has risen 6.2% to Mex$35.77. The fair value is estimated to be Mex$45.19, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 16% over the last 3 years. Earnings per share has declined by 8.9%.
New Risk • Mar 02New minor risk - Earnings qualityThe company has large one-off items impacting its financial results. One-off items were 92% of the size of the rest of the company's trailing 12-month earnings before tax. This is considered a minor risk. One-off items are incomes or expenses that the company does not expect to repeat in future periods. Examples include profits from the sale of a business or expenses from a restructuring or legal settlements. If the company's reported statutory earnings include a large proportion of one-off items it means they may be an unreliable indicator of its true business performance as the earnings were skewed by these incomes or expenses. Currently, the following risks have been identified for the company: Major Risk Dividend is not well covered by earnings and cash flows. Paying a dividend despite being loss-making. Paying a dividend despite having no free cash flows. Minor Risk Large one-off items impacting financial results.