ASX:WSA

Stock Analysis Report

Executive Summary

Western Areas Limited mines for, processes, and sells nickel sulphide concentrates in Australia.

Rewards

PE ratio (18.1x) is below the Australian market (18.6x)

Earnings grew by 356.8% over the past year

Risk Analysis

No risks detected for WSA from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has Western Areas's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

5.5%

WSA

0.8%

AU Metals and Mining

0.7%

AU Market


1 Year Return

17.0%

WSA

6.2%

AU Metals and Mining

15.5%

AU Market

Return vs Industry: WSA exceeded the Australian Metals and Mining industry which returned 6.2% over the past year.

Return vs Market: WSA exceeded the Australian Market which returned 15.5% over the past year.


Shareholder returns

WSAIndustryMarket
7 Day5.5%0.8%0.7%
30 Day-5.9%-5.1%0.8%
90 Day-7.9%5.9%6.1%
1 Year17.7%17.0%11.7%6.2%20.6%15.5%
3 Year14.6%12.1%55.5%36.4%38.1%19.7%
5 Year-33.5%-36.4%85.7%41.9%51.8%17.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Western Areas undervalued compared to its fair value and its price relative to the market?

18.07x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WSA (A$2.69) is trading above our estimate of fair value (A$0.49)

Significantly Below Fair Value: WSA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WSA is poor value based on its PE Ratio (18.1x) compared to the Metals and Mining industry average (11.8x).

PE vs Market: WSA is good value based on its PE Ratio (18.1x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: WSA is poor value based on its PEG Ratio (20.9x)


Price to Book Ratio

PB vs Industry: WSA is overvalued based on its PB Ratio (1.4x) compared to the AU Metals and Mining industry average (1.4x).


Next Steps

Future Growth

How is Western Areas forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

0.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WSA's forecast earnings growth (0.9% per year) is below the savings rate (1.1%).

Earnings vs Market: WSA's earnings (0.9% per year) are forecast to grow slower than the Australian market (9.3% per year).

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

Revenue vs Market: WSA's revenue (0.8% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: WSA's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WSA's Return on Equity is forecast to be low in 3 years time (10.2%).


Next Steps

Past Performance

How has Western Areas performed over the past 5 years?

3.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WSA has high quality earnings.

Growing Profit Margin: WSA's current net profit margins (12.9%) are higher than last year (3.3%).


Past Earnings Growth Analysis

Earnings Trend: WSA has become profitable over the past 5 years, growing earnings by 3.2% per year.

Accelerating Growth: WSA's earnings growth over the past year (356.8%) exceeds its 5-year average (3.2% per year).

Earnings vs Industry: WSA earnings growth over the past year (356.8%) exceeded the Metals and Mining industry 16.7%.


Return on Equity

High ROE: WSA's Return on Equity (7.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Western Areas's financial position?


Financial Position Analysis

Short Term Liabilities: WSA's short term assets (A$235.6M) exceed its short term liabilities (A$64.9M).

Long Term Liabilities: WSA's short term assets (A$235.6M) exceed its long term liabilities (A$58.0M).


Debt to Equity History and Analysis

Debt Level: WSA is debt free.

Reducing Debt: WSA has no debt compared to 5 years ago when its debt to equity ratio was 30.7%.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if WSA's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: WSA is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: WSA is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Western Areas's current dividend yield, its reliability and sustainability?

0.74%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Western Areas before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.7%marketbottom25%2.3%markettop25%5.4%industryaverage4.4%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: WSA's dividend (0.74%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.3%).

High Dividend: WSA's dividend (0.74%) is low compared to the top 25% of dividend payers in the Australian market (5.35%).


Stability and Growth of Payments

Stable Dividend: WSA is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: WSA is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

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


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.0yrs

Average management tenure


CEO

Dan Lougher (59yo)

8yrs

Tenure

AU$2,060,966

Compensation

Mr. Daniel Richard Lougher, also known as Dan, B.Sc. (Mining Geology), Msc. Eng., MAusIMM, has been Non-Executive Director at Perseus Mining Limited. Mr. Lougher has been the Chief Executive Officer and Ma ...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD1.36M) is above average for companies of similar size in the Australian market ($USD689.90K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Lougher
MD, CEO & Director8yrsAU$2.06m0.14% A$995.3k
Joseph Belladonna
CFO & Company Secretary9.6yrsAU$976.60k0.089% A$652.9k
Wyn Jones
General Manager of Operations7.5yrsAU$844.59k0.081% A$595.8k
Leonard Lau
General Manager of Corporate Development0yrsno datano data
Graham Marshall
General Manager of Commercial10.1yrsAU$641.30kno data
Duncan Sutherland
GM of Forrestania Nickel Operations & Executive Director7.4yrsno datano data

8.0yrs

Average Tenure

Experienced Management: WSA's management team is seasoned and experienced (8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Daniel Lougher
MD, CEO & Director8yrsAU$2.06m0.14% A$995.3k
Ian Macliver
Independent Non-Executive Chairman6.3yrsAU$183.21k0.013% A$98.0k
Craig Readhead
Independent Non-Executive Director5.7yrsAU$158.78k0.0073% A$53.8k
Timothy Netscher
Independent Non-Executive Director5.5yrsAU$158.78k0.0057% A$42.0k
Richard Yeates
Independent Non-Executive Director10.3yrsAU$158.78k0.0037% A$26.9k
Natalia Streltsova
Independent Non-Executive Director3.1yrsAU$158.78k0.0024% A$17.8k

6.0yrs

Average Tenure

60yo

Average Age

Experienced Board: WSA's board of directors are considered experienced (6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Western Areas Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Western Areas Limited
  • Ticker: WSA
  • Exchange: ASX
  • Founded: 1999
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$736.375m
  • Shares outstanding: 273.75m
  • Website: https://www.westernareas.com.au

Location

  • Western Areas Limited
  • 2 Kings Park Road
  • Level 2
  • West Perth
  • Western Australia
  • 6005
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WSAASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2000
FX9DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2000
WNAR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2000
WSACHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2000

Biography

Western Areas Limited mines for, processes, and sells nickel sulphide concentrates in Australia. The company develops high-grade nickel mines; and explores for nickel sulphides and other base metals. Its flagship property is the Forrestania project located in Western Australia. Western Areas Limited was founded in 1999 and is headquartered in West Perth, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 10:34
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
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.