ASX:SGM

Stock Analysis Report

Sims Metal Management

Executive Summary

Sims Metal Management Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, China, Turkey, South Korea, the United States, and internationally.

Snowflake

Fundamentals

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

How has Sims Metal Management's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.7%

SGM

0.05%

AU Metals and Mining

2.5%

AU Market


1 Year Return

-19.2%

SGM

10.3%

AU Metals and Mining

11.1%

AU Market

Return vs Industry: SGM underperformed the Australian Metals and Mining industry which returned 10.3% over the past year.

Return vs Market: SGM underperformed the Australian Market which returned 11.1% over the past year.


Shareholder returns

SGMIndustryMarket
7 Day-0.7%0.05%2.5%
30 Day-10.3%-5.6%0.7%
90 Day-1.8%-8.9%1.4%
1 Year-15.9%-19.2%17.9%10.3%17.5%11.1%
3 Year13.0%0.5%62.5%43.1%37.8%19.4%
5 Year5.2%-11.1%56.0%20.7%51.7%17.6%

Price Volatility Vs. Market

How volatile is Sims Metal Management's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sims Metal Management undervalued compared to its fair value and its price relative to the market?

1.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SGM (A$9.78) is trading below our estimate of fair value (A$9.92)

Significantly Undervalued: SGM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SGM is poor value based on its PE Ratio (13x) compared to the Metals and Mining industry average (12.6x).

PE vs Market: SGM is good value based on its PE Ratio (13x) compared to the Australian market (18x).


Price to Earnings Growth Ratio

Low PEG Ratio: SGM is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: SGM is good value based on its PB Ratio (0.9x) compared to the AU Metals and Mining industry average (1.6x).


Next Steps

Future Growth

How is Sims Metal Management forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

6.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGM's forecast earnings growth (6.8% per year) is above the savings rate (2.3%).

Earnings vs Market: SGM's earnings (6.8% per year) are forecast to grow slower than the Australian market (10.3% per year).

High Growth Earnings: SGM's earnings are forecast to grow, but not significantly.

Revenue vs Market: SGM's revenue (0.2% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: SGM's revenue (0.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SGM's Return on Equity is forecast to be low in 3 years time (6.5%).


Next Steps

Past Performance

How has Sims Metal Management performed over the past 5 years?

34.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SGM's earnings have grown significantly by 34.3% per year over the past 5 years.

Accelerating Growth: SGM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SGM had negative earnings growth (-25%) over the past year, making it difficult to compare to the Metals and Mining industry average (1.3%).


Return on Equity

High ROE: SGM's Return on Equity (6.6%) is considered low.


Return on Assets

ROA vs Industry: SGM's Return on Assets is below or equal to the Metals and Mining industry average last year.


Return on Capital Employed

ROCE Improving: SGM's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Sims Metal Management's financial position?


Financial Position Analysis

Short Term Liabilities: SGM's short term assets (A$1.2B) exceeds its short term liabilities (A$658.7M)

Long Term Liabilities: SGM's short term assets (1.2B) exceeds its long term liabilities (228.0M)


Debt to Equity History and Analysis

Debt Level: SGM's debt to equity ratio (1.5%) is considered satisfactory

Reducing Debt: SGM's debt to equity ratio has increased from 0.8% to 1.5% over the past 5 years.

Debt Coverage: SGM's debt is well covered by operating cash flow (1028.9%).

Interest Coverage: SGM's interest payments on its debt are well covered by EBIT (31.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: SGM's debt is covered by short term assets (assets are 35.142850x debt).


Next Steps

Dividend

What is Sims Metal Management's current dividend yield, its reliability and sustainability?

4.29%

Current Dividend Yield


Dividend Yield vs Market

company4.3%marketbottom25%2.5%markettop25%5.6%industryaverage4.8%forecastin3Years3.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SGM's dividend (4.29%) is higher than the bottom 25% of dividend payers in the Australian market (2.46%).

High Dividend: SGM's dividend (4.29%) is low compared to the top 25% of dividend payers in the Australian market (5.56%).

Stable Dividend: SGM's dividend payments have been volatile in the past 10 years.

Growing Dividend: SGM's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.9%), SGM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SGM's dividends in 3 years are forecast to be well covered by earnings (49.3% payout ratio).


Next Steps

Management

What is the CEO of Sims Metal Management's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Alistair Field (55yo)

2.2yrs

Tenure

AU$5,135,885

Compensation

Mr. Alistair Field, (NHD) Mech Eng, MBA, has been Group Chief Executive Officer & Managing Director at Sims Metal Management Limited since August 3, 2017 and served as its Group Chief Operating Officer sin ...


CEO Compensation Analysis

Compensation vs. Market: Alistair has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Australian market.

Compensation vs Earnings: Alistair's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

Experienced Management: SGM's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

4.9yrs

Average Tenure

64yo

Average Age

Experienced Board: SGM's board of directors are considered experienced (4.9 years average tenure).


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$17,069,60217 Sep 19
Cooper Investors Pty Limited
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SellAU$48,851,97417 Sep 19
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Orbis Investment Management Limited
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Max PriceAU$10.20
SellAU$5,452,34923 Jul 19
Orbis Investment Management Limited
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Max PriceAU$10.78
BuyAU$23,210,01620 May 19
Orbis Investment Management Limited
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Max PriceAU$9.93
BuyAU$18,82014 May 19
Deborah O’Toole
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,000
Max PriceAU$9.41
BuyAU$21,289,02502 May 19
Orbis Investment Management Limited
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Shares2,140,516
Max PriceAU$11.04
SellAU$617,72102 May 19
Orbis Investment Management Limited
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Shares51,887
Max PriceAU$11.91
BuyAU$21,04028 Apr 19
Michael Kane
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,000
Max PriceAU$10.52
BuyAU$743,99701 Apr 19
UBS Asset Management
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Max PriceAU$10.58
SellAU$2,108,26601 Apr 19
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Max PriceAU$10.69
SellAU$69,185,23027 Mar 19
UBS Asset Management
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Shares6,178,353
Max PriceAU$11.68
BuyAU$69,294,76927 Mar 19
UBS Asset Management
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Shares6,201,806
Max PriceAU$11.19
BuyAU$32,036,77526 Mar 19
Paradice Investment Management Pty Ltd.
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Shares2,668,117
Max PriceAU$12.01
SellAU$37,494,91126 Mar 19
Paradice Investment Management Pty Ltd.
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Shares3,499,596
Max PriceAU$10.71
SellAU$109,12615 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares9,942
Max PriceAU$10.98
SellAU$3,64615 Mar 19
Macquarie Investment Management Limited
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Shares333
Max PriceAU$10.95
SellAU$346,24614 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares30,688
Max PriceAU$11.35
BuyAU$175,85114 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares15,556
Max PriceAU$11.32
SellAU$012 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares10,118
Max PriceAU$11.62
BuyAU$012 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares28,858
Max PriceAU$11.61
SellAU$5,07712 Mar 19
Macquarie Investment Management Limited
EntityCompany
Shares445
Max PriceAU$11.41
BuyAU$008 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares1,852,892
Max PriceAU$13.25
SellAU$008 Mar 19
Macquarie Group, Ltd., Banking & Securities Investments
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Shares1,206,672
Max PriceAU$13.32
SellAU$008 Mar 19
MQ Specialist Investment Management Ltd.
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Shares3
Max PriceAU$12.89
BuyAU$008 Mar 19
Macquarie Investment Management Limited
EntityCompany
Shares131,444
Max PriceAU$11.63
SellAU$008 Mar 19
Macquarie Investment Management Limited
EntityCompany
Shares200,076
Max PriceAU$11.46
BuyAU$114,085,56208 Feb 19
UBS Asset Management
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Shares11,400,543
Max PriceAU$10.33
SellAU$2,180,40908 Feb 19
UBS Asset Management
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Shares219,152
Max PriceAU$9.95
BuyAU$22,540,64523 Jan 19
Orbis Investment Management Limited
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Shares2,427,282
Max PriceAU$9.48
BuyAU$20,135,24616 Jan 19
Orbis Investment Management Limited
EntityCompany
Shares2,015,737
Max PriceAU$10.05
BuyAU$25,96918 Dec 18
Deborah O’Toole
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,500
Max PriceAU$10.39
BuyAU$23,793,57718 Dec 18
Orbis Investment Management Limited
EntityCompany
Shares2,271,267
Max PriceAU$10.70
BuyAU$25,568,02507 Dec 18
Orbis Investment Management Limited
EntityCompany
Shares2,332,024
Max PriceAU$11.61
BuyAU$25,54013 Nov 18
Robert Bass
EntityIndividual
Shares2,000
Max PriceAU$12.77
BuyAU$11,607,36808 Nov 18
Paradice Investment Management Pty Ltd.
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Shares966,737
Max PriceAU$12.01
BuyAU$25,558,31630 Oct 18
Orbis Investment Management Limited
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Shares2,176,385
Max PriceAU$11.89

Ownership Breakdown


Management Team

  • Bill Schmiedel

    President of Global Trade

    • Tenure: 0yrs
    • Compensation: AU$4.03m
  • Stephen Mikkelsen (55yo)

    Group Chief Financial Officer

    • Tenure: 1.8yrs
    • Compensation: AU$2.69m
  • Steve Skurnac

    Group Chief Development Officer

    • Tenure: 2.3yrs
    • Compensation: AU$2.44m
  • Brad Baker

    Chief Human Resources Officer

    • Tenure: 1.8yrs
  • Angela Catt

    Company Secretary & Director of Investor Relations

    • Tenure: 1.8yrs
  • Alistair Field (55yo)

    Group CEO. MD & Director

    • Tenure: 2.2yrs
    • Compensation: AU$5.14m
  • Elise Gautier

    Group Chief Risk & Compliance Officer

    • Tenure: 0.9yrs
  • Brendan McDonnell

    Chief Technology Officer

    • Tenure: 1.8yrs
  • Gretchen Johanns

    Group General Counsel & Company Secretary

    • Tenure: 0.9yrs
  • Réal Hamilton-Romeo

    Director of Corporate Communications

    • Tenure: 0yrs

Board Members

  • Georgia Nelson (69yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: AU$323.87k
  • Jim Thompson (69yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: AU$341.01k
  • Geoff Brunsdon (61yo)

    Independent Chairman of the Board

    • Tenure: 7.6yrs
    • Compensation: AU$515.23k
  • Mike Kane (68yo)

    Independent Non-Executive Director

    • Tenure: 0.6yrs
    • Compensation: AU$83.46k
  • Deb O’Toole (62yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: AU$267.64k
  • Heather Ridout (65yo)

    Independent Non-Executive Director

    • Tenure: 8.1yrs
    • Compensation: AU$267.10k
  • Hiroyuki Kato (63yo)

    Non-Independent Non-Executive Director

    • Tenure: 0.9yrs
    • Compensation: AU$145.49k
  • Alistair Field (55yo)

    Group CEO. MD & Director

    • Tenure: 2.2yrs
    • Compensation: AU$5.14m

Company Information

Sims Metal Management Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sims Metal Management Limited
  • Ticker: SGM
  • Exchange: ASX
  • Founded: 1917
  • Industry: Steel
  • Sector: Materials
  • Market Cap: AU$1.988b
  • Shares outstanding: 202.90m
  • Website: https://www.simsmm.com

Number of Employees


Location

  • Sims Metal Management Limited
  • 555 Theodore Fremd Avenue
  • Suite C300
  • Rye
  • New York
  • 10580
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
SMUP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
I8MDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
SGMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
SMSM.YOTCPK (Pink Sheets LLC)SPON ADR EA REP 1 ORD SHS NPVUSUSDNov 1994
I8MADB (Deutsche Boerse AG)SPON ADR EA REP 1 ORD SHS NPVDEEURNov 1994

Biography

Sims Metal Management Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, China, Turkey, South Korea, the United States, and internationally. The compan ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 10:33
End of Day Share Price2019/10/16 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.