ASX:WSA

Stock Analysis Report

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Executive Summary

Western Areas Limited mines for, processes, and sells nickel sulphide concentrates and other base metals in Australia. More Details

Rewards

Trading at 48.9% below our estimate of its fair value

Earnings are forecast to grow 59.08% per year

Risk Analysis

No risks detected for WSA from our risk checks.


Snowflake Analysis

Flawless balance sheet and fair value.


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 is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: WSA's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

-8.5%

WSA

-3.4%

AU Metals and Mining

-0.1%

AU Market


1 Year Return

0.4%

WSA

47.1%

AU Metals and Mining

12.7%

AU Market

Return vs Industry: WSA underperformed the Australian Metals and Mining industry which returned 47.1% over the past year.

Return vs Market: WSA underperformed the Australian Market which returned 12.7% over the past year.


Shareholder returns

WSAIndustryMarket
7 Day-8.5%-3.4%-0.1%
30 Day-5.2%2.6%-2.2%
90 Day-6.3%6.2%1.2%
1 Year1.3%0.4%54.2%47.1%16.3%12.7%
3 Year-20.2%-22.1%79.0%54.5%27.6%12.2%
5 Year0.6%-2.5%199.5%152.2%59.8%29.0%

Long-Term 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?

48.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WSA (A$2.36) is trading below our estimate of fair value (A$4.62)

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


Price To Earnings Ratio

PE vs Industry: WSA is unprofitable, so we can't compare its PE Ratio to the AU Metals and Mining industry average.

PE vs Market: WSA 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 WSA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WSA is good value based on its PB Ratio (1.2x) compared to the AU Metals and Mining industry average (2.5x).


Next Steps

Future Growth

How is Western Areas forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

59.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WSA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).

Earnings vs Market: WSA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: WSA's is expected to become profitable in the next 3 years.

Revenue vs Market: WSA's revenue (5.4% per year) is forecast to grow slower than the Australian market (5.5% per year).

High Growth Revenue: WSA's revenue (5.4% 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 (6.2%).


Next Steps

Past Performance

How has Western Areas performed over the past 5 years?

42.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WSA is currently unprofitable.

Growing Profit Margin: WSA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: WSA is unprofitable, but has reduced losses over the past 5 years at a rate of 42.3% per year.

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

Earnings vs Industry: WSA is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (27.5%).


Return on Equity

High ROE: WSA has a negative Return on Equity (-0.91%), as it is currently unprofitable.


Next Steps

Financial Health

How is Western Areas's financial position?


Financial Position Analysis

Short Term Liabilities: WSA's short term assets (A$145.0M) exceed its short term liabilities (A$73.9M).

Long Term Liabilities: WSA's short term assets (A$145.0M) exceed its long term liabilities (A$79.7M).


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 0.1%.

Debt Coverage: WSA has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: WSA has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

0.70%

Forecast Dividend Yield


Dividend Yield vs Market

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

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


Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if WSA's dividend payments have been 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?

8.8yrs

Average management tenure


CEO

Dan Lougher (60 yo)

9.08yrs

Tenure

AU$2,008,602

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 ($USD1.54M) is above average for companies of similar size in the Australian market ($USD722.57K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Daniel Lougher
MD, CEO & Director9.08yrsAU$2.01m0.19%
A$ 1.3m
Joseph Belladonna
CFO & Company Secretary10.67yrsAU$1.04m0.088%
A$ 572.8k
Wyn Jones
General Manager of Operations8.58yrsAU$845.67k0.081%
A$ 522.8k
Leonard Lau
General Manager of Corporate Developmentno datano datano data
Duncan Sutherland
GM of Forrestania Nickel Operations & Executive Director8.5yrsno datano data

8.8yrs

Average Tenure

Experienced Management: WSA's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Daniel Lougher
MD, CEO & Director9.08yrsAU$2.01m0.19%
A$ 1.3m
Ian Macliver
Independent Non-Executive Chairman7.33yrsAU$192.37k0.015%
A$ 98.2k
Yasmin Broughton
Independent Non-Executive Director0.42yrno datano data
Timothy Netscher
Independent Non-Executive Director6.58yrsAU$166.72k0.015%
A$ 95.3k
Richard Yeates
Independent Non-Executive Director11.42yrsAU$166.72k0.0036%
A$ 23.6k
Natalia Streltsova
Independent Non-Executive Director4.17yrsAU$166.72k0.0053%
A$ 34.5k

7.0yrs

Average Tenure

60.5yo

Average Age

Experienced Board: WSA's board of directors are considered experienced (7 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$649.158m
  • Shares outstanding: 275.07m
  • 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 and other base metals in Australia. It holds a 100% interest in the Forrestania project located in Western Australia. West...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/07 07:08
End of Day Share Price2021/03/05 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


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.