Foraco International (TSX:FAR) - Share price, News & Analysis

FAR fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	4/6
Financial Health	3/6
Dividends	0/6

FAR Stock Overview

Foraco International SA, together with its subsidiaries, provides drilling services worldwide.

Rewards

Trading at 38.8% below our estimate of its fair value

Revenue is forecast to grow 11.15% per year

Earnings grew by 656.5% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Foraco International Competitors

Major Drilling Group International

TSX:MDI

CA$694.5m

Geodrill

TSX:GEO

CA$98.3m

Orbit Garant Drilling

TSX:OGD

CA$29.2m

Primoris Services

NasdaqGS:PRIM

US$1.4b

Price History & Performance

Summary of all time highs, changes and price drops for Foraco International
Historical stock prices
Current Share Price	CA$1.82
52 Week High	CA$2.45
52 Week Low	CA$0.47
Beta	1.35
1 Month Change	0.55%
3 Month Change	-19.11%
1 Year Change	271.43%
3 Year Change	304.44%
5 Year Change	378.95%
Change since IPO	-25.71%

Recent News & Updates

Dec 17

Should You Be Adding Foraco International (TSE:FAR) To Your Watchlist Today?

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Aug 31

Here's Why I Think Foraco International (TSE:FAR) Might Deserve Your Attention Today

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

	FAR	CA Metals and Mining	CA Market
7D	4.0%	0.08%	-2.9%
1Y	271.4%	0.6%	16.1%

Return vs Industry: FAR exceeded the Canadian Metals and Mining industry which returned -1.3% over the past year.

Return vs Market: FAR exceeded the Canadian Market which returned 15% over the past year.

Price Volatility

Is FAR's price volatile compared to industry and market?
FAR volatility
FAR Average Weekly Movement	8.5%
Metals and Mining Industry Average Movement	10.6%
Market Average Movement	9.8%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	3.7%

Stable Share Price: FAR is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: FAR's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1997	2,693	Daniel Simoncini	https://www.foraco.com

Foraco International SA, together with its subsidiaries, provides drilling services worldwide. It operates through Mining and Water segments. The company offers its drilling services to the mining and energy industry, such as exploration, development, and production related underground water drilling services.

Foraco International Fundamentals Summary

How do Foraco International's earnings and revenue compare to its market cap?
FAR fundamental statistics
Market Cap	US$141.95m
Earnings (TTM)	US$34.82m
Revenue (TTM)	US$254.97m

4.1x

P/E Ratio

0.6x

P/S Ratio

Is FAR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FAR income statement (TTM)
Revenue	US$254.97m
Cost of Revenue	US$209.30m
Gross Profit	US$45.67m
Expenses	US$10.85m
Earnings	US$34.82m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.35
Gross Margin	17.91%
Net Profit Margin	13.66%
Debt/Equity Ratio	155.6%

How did FAR perform over the long term?

See historical performance and comparison

Valuation

Is Foraco International undervalued compared to its fair value and its price relative to the market?

38.8%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: FAR (CA$1.82) is trading below our estimate of fair value (CA$2.97)

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

Price To Earnings Ratio

PE vs Industry: FAR is good value based on its PE Ratio (4.1x) compared to the Canadian Metals and Mining industry average (10.3x).

PE vs Market: FAR is good value based on its PE Ratio (4.1x) compared to the Canadian market (12.6x).

Price to Earnings Growth Ratio

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

Price to Book Ratio

PB vs Industry: FAR's PB Ratio (2.4x) is in line with the CA Metals and Mining industry average.

Future Growth

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

11.1%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if FAR's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if FAR's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FAR's revenue (11.1% per year) is forecast to grow faster than the Canadian market (5.6% per year).

High Growth Revenue: FAR's revenue (11.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if FAR's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Foraco International performed over the past 5 years?

65.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FAR has a large one-off gain of $34.6M impacting its September 30 2021 financial results.

Growing Profit Margin: FAR's current net profit margins (13.7%) are higher than last year (2.3%).

Past Earnings Growth Analysis

Earnings Trend: FAR has become profitable over the past 5 years, growing earnings by 65.6% per year.

Accelerating Growth: FAR's earnings growth over the past year (656.5%) exceeds its 5-year average (65.6% per year).

Earnings vs Industry: FAR earnings growth over the past year (656.5%) exceeded the Metals and Mining industry 93.2%.

Return on Equity

High ROE: Whilst FAR's Return on Equity (58.83%) is outstanding, this metric is skewed due to their high level of debt.

Financial Health

How is Foraco International's financial position?

Financial Position Analysis

Short Term Liabilities: FAR's short term assets ($110.5M) exceed its short term liabilities ($67.1M).

Long Term Liabilities: FAR's short term assets ($110.5M) exceed its long term liabilities ($101.2M).

Debt to Equity History and Analysis

Debt Level: FAR's net debt to equity ratio (121.8%) is considered high.

Reducing Debt: FAR's debt to equity ratio has increased from 119.6% to 155.6% over the past 5 years.

Debt Coverage: FAR's debt is well covered by operating cash flow (31.5%).

Interest Coverage: FAR's interest payments on its debt are not well covered by EBIT (2.3x coverage).

Balance Sheet

Dividend

What is Foraco International current dividend yield, its reliability and sustainability?

Dividend Yield vs Market

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

High Dividend: Unable to evaluate FAR'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 FAR's dividends per share have been stable in the past.

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

Current Payout to Shareholders

Dividend Coverage: FAR is not paying a notable dividend for the Canadian market.

Future Payout to Shareholders

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

Next Steps

Explore strong dividend paying companies in the Materials industry.

Management

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

18.9yrs

Average management tenure

CEO

Daniel Simoncini (63 yo)

24.58yrs

Tenure

US$1,526,620

Compensation

Mr. Daniel Simoncini has been the Chief Executive Officer of Foraco International SA since June 1997. Mr. Simoncini held various senior management positions with other entities. From 1994 to 1997, he serve...

CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD1.53M) is above average for companies of similar size in the Canadian market ($USD158.71K).

Compensation vs Earnings: Daniel's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: FAR's management team is seasoned and experienced (18.9 years average tenure).

Board Members

Experienced Board: FAR's board of directors are seasoned and experienced ( 14.4 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.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.7%.

Data	Last Updated (UTC time)
Company Analysis	2022/01/26 01:02
End of Day Share Price	2022/01/25 00:00
Earnings	2021/09/30
Annual Earnings	2020/12/31