TSX:ORL

Stock Analysis Report

Executive Summary

Orocobre Limited engages in the exploration, development, and production of lithium, potassium, boron, and potash deposits in Argentina.

Rewards

PE ratio (12.5x) is below the Canadian market (15.8x)

Revenue is forecast to grow 33.66% per year

Earnings grew by 2744.6% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -30.2% per year for the next 3 years

High level of non-cash earnings

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ORL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.5%

ORL

0.4%

CA Metals and Mining

1.6%

CA Market


1 Year Return

0.9%

ORL

28.4%

CA Metals and Mining

10.0%

CA Market

Return vs Industry: ORL underperformed the Canadian Metals and Mining industry which returned 26.9% over the past year.

Return vs Market: ORL underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

ORLIndustryMarket
7 Day6.5%0.4%1.6%
30 Day36.1%3.5%2.7%
90 Day56.2%8.8%6.4%
1 Year0.9%0.9%29.3%28.4%13.5%10.0%
3 Year-26.3%-26.3%-0.3%-2.1%17.5%6.8%
5 Year22.8%22.8%28.5%24.4%36.6%16.5%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

12.01x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ORL (CA$3.5) is trading above our estimate of fair value (CA$0.01)

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


Price To Earnings Ratio

PE vs Industry: ORL is good value based on its PE Ratio (12.5x) compared to the Metals and Mining industry average (17.3x).

PE vs Market: ORL is good value based on its PE Ratio (12.5x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: ORL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ORL is good value based on its PB Ratio (1.1x) compared to the CA Metals and Mining industry average (1.5x).


Next Steps

Future Growth

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

-32.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ORL's earnings are forecast to decline over the next 3 years (-30.2% per year).

Earnings vs Market: ORL's earnings are forecast to decline over the next 3 years (-30.2% per year).

High Growth Earnings: ORL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ORL's revenue (33.7% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: ORL's revenue (33.7% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ORL's Return on Equity is forecast to be low in 3 years time (7.3%).


Next Steps

Past Performance

How has Orocobre performed over the past 5 years?

65.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ORL has a high level of non-cash earnings.

Growing Profit Margin: ORL's current net profit margins (67.3%) are higher than last year (11%).


Past Earnings Growth Analysis

Earnings Trend: ORL has become profitable over the past 5 years, growing earnings by 65.3% per year.

Accelerating Growth: ORL's earnings growth over the past year (2744.6%) exceeds its 5-year average (65.3% per year).

Earnings vs Industry: ORL earnings growth over the past year (2744.6%) exceeded the Metals and Mining industry -1.4%.


Return on Equity

High ROE: ORL's Return on Equity (7.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Orocobre's financial position?


Financial Position Analysis

Short Term Liabilities: ORL's short term assets ($362.9M) exceed its short term liabilities ($110.9M).

Long Term Liabilities: ORL's short term assets ($362.9M) exceed its long term liabilities ($267.4M).


Debt to Equity History and Analysis

Debt Level: ORL's debt to equity ratio (25.5%) is considered satisfactory.

Reducing Debt: ORL's debt to equity ratio has increased from 1.7% to 25.5% over the past 5 years.

Debt Coverage: ORL's debt is not well covered by operating cash flow (4.5%).

Interest Coverage: ORL earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: ORL's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

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

0.02%

Forecast Dividend Yield


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.4%industryaverage1.1%forecastin3Years0.02%

Current dividend yield vs market & industry

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

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


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

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


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Martin de Solay (48yo)

1.2yrs

Tenure

US$1,023,215

Compensation

Mr. Martin Perez de Solay, (I.ENG), has been CEO and Managing Director of Orocobre Limited since November 23, 2018 and its Director since January 18, 2018. He is a qualified industrial engineer with a care ...


CEO Compensation Analysis

Compensation vs Market: Martin's total compensation ($USD1.02M) is below average for companies of similar size in the Canadian market ($USD1.63M).

Compensation vs Earnings: Insufficient data to compare Martin's compensation with company performance.


Management Age and Tenure

1.2yrs

Average Tenure

Experienced Management: ORL's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

6.4yrs

Average Tenure

58.5yo

Average Age

Experienced Board: ORL's board of directors are considered experienced (6.4 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

SellCA$2,252,90920 Oct 19
BNY Mellon Asset Management
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Shares1,067,276
Max PriceCA$2.12
SellCA$29,56715 Oct 19
Lockwood Advisors, Inc.
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Max PriceCA$3.15
SellCA$015 Oct 19
BNY Mellon Asset Management
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BuyCA$015 Oct 19
BNY Mellon Asset Management
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Shares365,802
Max PriceCA$3.10
BuyCA$10,31228 Aug 19
Leanne Heywood
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares5,000
Max PriceCA$2.06
BuyCA$50,75026 Aug 19
Robert Hubbard
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares25,000
Max PriceCA$2.03
BuyCA$016 May 19
BNY Mellon Asset Management
EntityCompany
Shares4,104,187
Max PriceCA$3.74
BuyCA$29,19516 May 19
Lockwood Advisors, Inc.
EntityCompany
Shares9,400
Max PriceCA$3.11
SellCA$016 May 19
BNY Mellon Asset Management
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Shares1,124,758
Max PriceCA$3.72
SellCA$3,733,62706 Mar 19
AustralianSuper Pty. Ltd.
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Shares991,126
Max PriceCA$3.77
BuyCA$853,52106 Mar 19
AustralianSuper Pty. Ltd.
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Shares227,118
Max PriceCA$3.76

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 12.5%.


Management Team

  • Rick Anthon

    Corporate Development Manager

    • Compensation: US$497.28k
  • Neil Kaplan

    CFO & Joint Company Secretary

    • Tenure: 7yrs
    • Compensation: US$550.88k
  • Christian Cortes

    Financial Controller

    • Andrew Barber

      Investor Relations Manager

      • Martin de Solay (48yo)

        MD, CEO & Director

        • Tenure: 1.2yrs
        • Compensation: US$1.02m
      • Tara Berrie

        Commercial Executive

        • Hersen Porta

          Chief Operations Officer

          • Tenure: 0.3yrs

        Board Members

        • John Gibson (61yo)

          Non-Executive Director

          • Tenure: 9.8yrs
          • Compensation: US$70.67k
        • Richard Seville (57yo)

          Non-Executive Director

          • Tenure: 12.8yrs
          • Compensation: US$799.20k
        • Fernando Oris de Roa

          Non-Executive Director

          • Tenure: 9.6yrs
          • Compensation: US$70.67k
        • Frederico Nicholson

          Non-Executive Director

          • Tenure: 9.3yrs
          • Compensation: US$70.67k
        • Rob Hubbard (60yo)

          Non-Executive Chairman

          • Tenure: 3.5yrs
          • Compensation: US$132.50k
        • Leanne Heywood

          Non-Executive Director

          • Tenure: 3.3yrs
          • Compensation: US$70.66k
        • Masaharu Katayama

          Non-Executive Director

          • Tenure: 1.8yrs
          • Compensation: US$70.67k
        • Martin de Solay (48yo)

          MD, CEO & Director

          • Tenure: 1.2yrs
          • Compensation: US$1.02m

        Company Information

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


        Key Information

        • Name: Orocobre Limited
        • Ticker: ORL
        • Exchange: TSX
        • Founded: 2005
        • Industry: Diversified Metals and Mining
        • Sector: Materials
        • Market Cap: AU$955.610m
        • Listing Market Cap: AU$859.286m
        • Shares outstanding: 261.81m
        • Website: https://www.orocobre.com

        Number of Employees


        Location

        • Orocobre Limited
        • Riparian Plaza
        • Level 35
        • Brisbane
        • Queensland
        • 4000
        • Australia

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        OREASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 2007
        3O1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2007
        3O1XTRA (XETRA Trading Platform)YesOrdinary SharesDEEURDec 2007
        OROC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 2007
        ORLTSX (The Toronto Stock Exchange)YesOrdinary SharesCACADDec 2007
        ORECHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 2007
        0TWHLSE (London Stock Exchange)YesOrdinary SharesGBAUDDec 2007

        Biography

        Orocobre Limited engages in the exploration, development, and production of lithium, potassium, boron, and potash deposits in Argentina. The company’s flagship project is the Salar de Olaroz project located in the Jujuy province of northern Argentina. It also operates 2 open pit mines situated in Tincalayu and Sijes producing minerals, refined products, and boric acid. In addition, the company owns 34.7% interest in Advantage Lithium Corp., which manages a portfolio of assets in Argentina, including the Cauchari joint venture; and a 100% interest in 4 other lithium properties. Orocobre Limited was incorporated in 2005 and is based in Brisbane, Australia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/19 00:13
        End of Day Share Price2020/01/17 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.