ASX:NAM

Stock Analysis Report

Executive Summary

Namoi Cotton Limited, together with its subsidiaries, engages in the ginning and marketing of cotton in Australia and Asia.

Rewards

Trading at 88.4% below its fair value

Revenue is forecast to grow 60.86% per year

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been diluted in the past year

Does not have a meaningful market cap (A$45M)



Snowflake Analysis

Fair value with mediocre balance sheet.

Share Price & News

How has Namoi Cotton's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NAM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.5%

NAM

-0.2%

AU Commercial Services

2.0%

AU Market


1 Year Return

-20.0%

NAM

17.8%

AU Commercial Services

18.2%

AU Market

Return vs Industry: NAM underperformed the Australian Commercial Services industry which returned 17.8% over the past year.

Return vs Market: NAM underperformed the Australian Market which returned 18.2% over the past year.


Shareholder returns

NAMIndustryMarket
7 Day-1.5%-0.2%2.0%
30 Day-5.9%-0.2%-0.7%
90 Day-4.5%2.2%0.7%
1 Year-20.0%-20.0%24.0%17.8%24.1%18.2%
3 Year-17.0%-20.0%21.7%8.9%36.0%17.3%
5 Year3.8%0%71.4%39.8%64.1%27.1%

Price Volatility Vs. Market

How volatile is Namoi Cotton's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Namoi Cotton undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NAM (A$0.32) is trading below our estimate of fair value (A$2.76)

Significantly Below Fair Value: NAM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NAM is unprofitable, so we can't compare its PE Ratio to the Commercial Services industry average.

PE vs Market: NAM is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NAM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NAM is good value based on its PB Ratio (0.4x) compared to the AU Commercial Services industry average (2.3x).


Next Steps

Future Growth

How is Namoi Cotton forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

72.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NAM is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: NAM is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: NAM is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: NAM's revenue (60.9% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: NAM's revenue (60.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NAM is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Namoi Cotton performed over the past 5 years?

-18.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NAM is currently unprofitable.

Growing Profit Margin: NAM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NAM is unprofitable, and losses have increased over the past 5 years at a rate of -18.7% per year.

Accelerating Growth: Unable to compare NAM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NAM is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (18.9%).


Return on Equity

High ROE: NAM has a negative Return on Equity (-14.76%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Namoi Cotton's financial position?


Financial Position Analysis

Short Term Liabilities: NAM's short term assets (A$61.1M) exceed its short term liabilities (A$52.1M).

Long Term Liabilities: NAM's short term assets (A$61.1M) exceed its long term liabilities (A$49.1M).


Debt to Equity History and Analysis

Debt Level: NAM's debt to equity ratio (40.8%) is considered high.

Reducing Debt: NAM's debt to equity ratio has reduced from 42.3% to 40.8% over the past 5 years.

Debt Coverage: NAM's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if NAM's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: NAM has a high level of physical assets or inventory.

Debt Coverage by Assets: NAM's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Namoi Cotton's current dividend yield, its reliability and sustainability?

1.86%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%2.4%markettop25%5.5%industryaverage2.6%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate NAM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NAM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NAM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NAM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: NAM is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NAM's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Namoi Cotton's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Michael Renehan 0

0.3yrs

Tenure

0

Mr. Michael Renehan, MEng Chemical, MBA, MAICD, has been Chief Executive Officer of Namoi Cotton Limited since September 01, 2019. Mr. Renehan had been the Chief Executive Officer of Murray Irrigation Limi ...


Management Age and Tenure

1.6yrs

Average Tenure

Experienced Management: NAM's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

1.5yrs

Average Tenure

62yo

Average Age

Experienced Board: NAM's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$205,47512 Jun 19
Tim Watson
EntityIndividual
Role
Chairman of the Board
Chairman
Shares513,943
Max PriceAU$0.40
BuyAU$4,70412 Jun 19
Tim Watson
EntityIndividual
Role
Chairman of the Board
Chairman
Shares13,835
Max PriceAU$0.34
BuyAU$73,41710 Jun 19
Tim Watson
EntityIndividual
Role
Chairman of the Board
Chairman
Shares198,424
Max PriceAU$0.37
BuyAU$90,30010 Jun 19
Tim Watson
EntityIndividual
Role
Chairman of the Board
Chairman
Shares250,000
Max PriceAU$0.36

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.7%.


Management Team

  • Stuart Greenwood

    Chief Financial Officer

    • Tenure: 11.9yrs
    • Compensation: AU$326.90k
  • Michael Renehan

    Chief Executive Officer

    • Tenure: 0.3yrs
  • Shane McGregor

    Chief Operations Officer

    • Tenure: 6.9yrs
    • Compensation: AU$363.66k
  • Alex Mehl

    Chief Information Officer

    • Tenure: 1.6yrs
    • Compensation: AU$287.59k
  • Andrew Metcalfe

    Company Secretary

    • Tenure: 0.08yrs

Board Members

  • Stuart Boydell (72yo)

    Non-Executive Director

    • Tenure: 25.5yrs
    • Compensation: AU$98.68k
  • Joe Di Leo (62yo)

    Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: AU$56.01k
  • James Jackson (57yo)

    Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: AU$56.01k
  • Glen Price (64yo)

    Non Executive Director

    • Tenure: 10.4yrs
    • Compensation: AU$76.95k
  • Robert Green (62yo)

    Non-Executive Director

    • Tenure: 6.6yrs
    • Compensation: AU$86.45k
  • Tim Watson (57yo)

    Chairman

    • Tenure: 1.3yrs
    • Compensation: AU$102.68k
  • Juanita Hamparsum (48yo)

    Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: AU$56.01k

Company Information

Namoi Cotton Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Namoi Cotton Limited
  • Ticker: NAM
  • Exchange: ASX
  • Founded: 1962
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: AU$44.889m
  • Shares outstanding: 140.28m
  • Website: https://www.namoicotton.com.au

Location

  • Namoi Cotton Limited
  • 27 Trucking Yard Lane
  • Wee Waa
  • New South Wales
  • 2388
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NAMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDApr 1998
NAMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDApr 1998

Biography

Namoi Cotton Limited, together with its subsidiaries, engages in the ginning and marketing of cotton in Australia and Asia. The company operates 12 cotton gins in New South Wales and Queensland. It is also ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 10:35
End of Day Share Price2019/12/06 00:00
Earnings2019/08/31
Annual Earnings2019/02/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.