ASX:WSA

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet with reasonable growth potential.


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


Market Performance


7 Day Return

2.0%

ASX:WSA

-2.4%

AU Metals and Mining

-1.8%

AU Market


1 Year Return

-16.2%

ASX:WSA

11.2%

AU Metals and Mining

0.2%

AU Market

WSA underperformed the Metals and Mining industry which returned 11.2% over the past year.

WSA underperformed the Market in Australia which returned 0.2% over the past year.


Share holder returns

WSAIndustryMarket
7 Day2.0%-2.4%-1.8%
30 Day2.0%-8.4%-3.5%
90 Day9.7%-1.2%-0.4%
1 Year-15.4%-16.2%19.0%11.2%5.9%0.2%
3 Year-17.0%-18.4%69.2%51.3%31.5%14.4%
5 Year-44.2%-46.8%42.5%10.9%38.3%7.3%

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 based on future cash flows and its price relative to the stock market?

47.98x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Western Areas's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Western Areas's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Western Areas is overvalued based on earnings compared to the AU Metals and Mining industry average.

Western Areas is overvalued based on earnings compared to the Australia market.


Price Based on Expected Growth

Western Areas is poor value based on expected growth next year.


Price Based on Value of Assets

Western Areas is good value based on assets compared to the AU Metals and Mining industry average.


Next Steps

Future Growth

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

36.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Western Areas's revenue is expected to grow by 7.2% yearly, however this is not considered high growth (20% yearly).

Western Areas's earnings are expected to grow significantly at over 20% yearly.

Western Areas's revenue growth is expected to exceed the Australia market average.

Western Areas's earnings growth is expected to exceed the Australia market average.

Western Areas's earnings growth is expected to exceed the low risk savings rate of 2.3%.


Earnings per Share Growth Estimates


Future Return on Equity

Western Areas is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Western Areas performed over the past 5 years?

-18.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Western Areas's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Western Areas's 1-year earnings growth exceeds its 5-year average (19.9% vs -18%)

Western Areas's earnings growth has not exceeded the AU Metals and Mining industry average in the past year (19.9% vs 20.8%).


Return on Equity

Western Areas has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Western Areas used its assets less efficiently than the AU Metals and Mining industry average last year based on Return on Assets.


Return on Capital Employed

Western Areas has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).


Next Steps

Financial Health

How is Western Areas's financial position?


Financial Position Analysis

Western Areas is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Western Areas's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Western Areas's level of debt (0%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (56.4% vs 0% today).

Debt is well covered by operating cash flow (96369.6%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 7.3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1859.5x debt.


Next Steps

Dividend

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

1.47%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Western Areas's pays a lower dividend yield than the bottom 25% of dividend payers in Australia (2.58%).

Western Areas's dividend is below the markets top 25% of dividend payers in Australia (5.88%).

Western Areas is not paying a notable dividend for Australia, therefore no need to check if the payments are stable.

Western Areas is not paying a notable dividend for Australia, therefore no need to check if the payments are increasing.


Current Payout to Shareholders

No need to calculate the sustainability of Western Areas's dividends as it is not paying a notable one for Australia.


Future Payout to Shareholders

No need to calculate the sustainability of Western Areas's dividends in 3 years as they are not expected to pay a notable one for Australia.


Next Steps

Management

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

7.5yrs

Average management tenure


CEO

Dan Lougher (59yo)

7.5yrs

Tenure

AU$2,045,940

Compensation

Mr. Daniel Richard Lougher, also known as Dan, B.Sc.(Mining Geology), Msc. Eng., MAusIMM, has been the Chief Executive Officer and Managing Director at Western Areas Ltd since February 1, 2012. Mr. Lougher ...


CEO Compensation Analysis

Dan's remuneration is higher than average for companies of similar size in Australia.

Dan's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

7.5yrs

Average Tenure

The average tenure for the Western Areas management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

5.5yrs

Average Tenure

60yo

Average Age

The tenure for the Western Areas board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellAU$138,24116 Aug 19
Schroder Investment Management Limited
EntityCompany
Shares61,717
Max PriceAU$2.24
BuyAU$79916 Aug 19
Schroder Investment Management Limited
EntityCompany
Shares364
Max PriceAU$2.19
BuyAU$8,289,82012 Aug 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares3,672,903
Max PriceAU$2.26
SellAU$401,32812 Aug 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares185,199
Max PriceAU$2.17
BuyAU$3,105,19816 Jul 19
Schroder Investment Management Limited
EntityCompany
Shares1,407,824
Max PriceAU$2.21
BuyAU$3,079,91410 Jun 19
Dimensional Fund Advisors L.P.
EntityCompany
Shares1,313,405
Max PriceAU$2.43
SellAU$8,226,63009 May 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares4,673,063
Max PriceAU$1.76
BuyAU$4,551,32609 May 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares1,925,920
Max PriceAU$2.36
BuyAU$6,270,54617 Mar 19
Dimensional Fund Advisors L.P.
EntityCompany
Shares2,752,614
Max PriceAU$2.36
SellAU$1,892,10017 Mar 19
Dimensional Fund Advisors L.P.
EntityCompany
Shares864,732
Max PriceAU$2.35
BuyAU$14,29918 Jan 19
Natalia Streltsova
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares6,620
Max PriceAU$2.16
SellAU$131,30006 Nov 18
Daniel Lougher
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares56,840
Max PriceAU$2.31
BuyAU$24,60003 Sep 18
Daniel Lougher
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares10,000
Max PriceAU$2.46
SellAU$341,25029 Aug 18
Daniel Lougher
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares125,000
Max PriceAU$2.73
SellAU$271,00029 Aug 18
David Southam
EntityIndividual
Shares100,000
Max PriceAU$2.71
BuyAU$9,235,74127 Aug 18
Paradice Investment Management Pty Ltd.
EntityCompany
Shares2,962,099
Max PriceAU$3.69
BuyAU$9,57624 Aug 18
Timothy Netscher
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,600
Max PriceAU$2.66

Ownership Breakdown


Management Team

  • Dan Lougher (59yo)

    MD, CEO & Director

    • Tenure: 7.5yrs
    • Compensation: AU$2.05m
  • Joe Belladonna

    CFO & Company Secretary

    • Tenure: 9.1yrs
    • Compensation: AU$964.02k
  • Graham Marshall (63yo)

    General Manager of Commercial

    • Tenure: 9.6yrs
    • Compensation: AU$641.30k
  • Wyn Jones

    General Manager of Operations

    • Tenure: 7.0yrs
    • Compensation: AU$826.00k
  • Duncan Sutherland

    GM of Forrestania Nickel Operations & Executive Director

    • Tenure: 6.9yrs
  • Len Lau

    General Manager of Corporate Development

    • Tenure: 0.0yrs

Board Members

  • Ian Macliver (59yo)

    Independent Non-Executive Chairman

    • Tenure: 5.8yrs
    • Compensation: AU$178.39k
  • Craig Readhead (65yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: AU$154.61k
  • Dan Lougher (59yo)

    MD, CEO & Director

    • Tenure: 7.5yrs
    • Compensation: AU$2.05m
  • Tim Netscher (69yo)

    Independent Non-Executive Director

    • Tenure: 5.0yrs
    • Compensation: AU$154.61k
  • Rick Yeates (60yo)

    Independent Non-Executive Director

    • Tenure: 9.8yrs
    • Compensation: AU$154.61k
  • Natalia Streltsova

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: AU$154.61k

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$675.659m
  • Shares outstanding: 273.55m
  • 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 f ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/20 10:33
End of Day Share Price2019/08/20 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.