DB:XB6

Stock Analysis Report

Executive Summary

Xebec Adsorption Inc. provides gas generation, purification, and filtration solutions for the industrial, energy, and renewables marketplace in Canada, China, the United States, France, and internationally.

Rewards

Trading at 19.1% below its fair value

Earnings are forecast to grow 78.25% per year

Became profitable this year

Risk Analysis

Highly volatile share price over past 3 months

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential with adequate balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: XB6's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

12.6%

XB6

-3.7%

DE Machinery

-2.4%

DE Market


1 Year Return

322.1%

XB6

-9.8%

DE Machinery

11.8%

DE Market

Return vs Industry: XB6 exceeded the German Machinery industry which returned -2.6% over the past year.

Return vs Market: XB6 exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

XB6IndustryMarket
7 Day12.6%-3.7%-2.4%
30 Day47.6%-3.1%-1.1%
90 Day71.2%1.8%3.0%
1 Year322.1%322.1%-7.0%-9.8%15.3%11.8%
3 Year3863.0%3863.0%-15.6%-21.7%14.4%4.4%
5 Year35566.7%35566.7%5.8%-6.2%23.8%7.0%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

6.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: XB6 (€1.7) is trading below our estimate of fair value (€2.1)

Significantly Below Fair Value: XB6 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: XB6 is poor value based on its PE Ratio (94.1x) compared to the Machinery industry average (16.7x).

PE vs Market: XB6 is poor value based on its PE Ratio (94.1x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: XB6 is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: XB6 is overvalued based on its PB Ratio (11.2x) compared to the DE Machinery industry average (1.5x).


Next Steps

Future Growth

How is Xebec Adsorption forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

78.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: XB6's forecast earnings growth (78.2% per year) is above the savings rate (-0.4%).

Earnings vs Market: XB6's earnings (78.2% per year) are forecast to grow faster than the German market (13.2% per year).

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

Revenue vs Market: XB6's revenue (44.1% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: XB6's revenue (44.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if XB6's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Xebec Adsorption performed over the past 5 years?

7.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: XB6 has high quality earnings.

Growing Profit Margin: XB6 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: XB6 has become profitable over the past 5 years, growing earnings by 7.8% per year.

Accelerating Growth: XB6 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: XB6 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Machinery industry (-13.7%).


Return on Equity

High ROE: XB6's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Xebec Adsorption's financial position?


Financial Position Analysis

Short Term Liabilities: XB6's short term assets (CA$33.2M) exceed its short term liabilities (CA$14.3M).

Long Term Liabilities: XB6's short term assets (CA$33.2M) exceed its long term liabilities (CA$8.5M).


Debt to Equity History and Analysis

Debt Level: XB6's debt to equity ratio (24.7%) is considered satisfactory.

Reducing Debt: XB6's debt to equity ratio has reduced from 34.1% to 24.7% over the past 5 years.

Debt Coverage: XB6's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: XB6's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet

Inventory Level: XB6 has a low level of unsold assets or inventory.

Debt Coverage by Assets: XB6's debt is covered by short term assets (assets are 8.7x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.6%industryaverage2.2%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate XB6's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate XB6'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 XB6's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if XB6'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 XB6's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

4.6yrs

Average management tenure


CEO

Kurt Sorschak (60yo)

11yrs

Tenure

CA$527,285

Compensation

Mr. Kurt Sorschak serves as the Chief Executive Officer and President of Xebec Adsorption Inc. since 2009 Mr. Sorschak Co-founded Xebec Adsorption Inc. and developed it from a local compressed air and gas  ...


CEO Compensation Analysis

Compensation vs Market: Kurt's total compensation ($USD403.33K) is below average for companies of similar size in the German market ($USD642.01K).

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


Management Age and Tenure

4.6yrs

Average Tenure

Experienced Management: XB6's management team is considered experienced (4.6 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

64yo

Average Age

Experienced Board: XB6's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: XB6 insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Sell€656,22102 Dec 19
Kurt Sorschak
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares399,000
Max Price€1.65
Sell€43,28029 Nov 19
Simon Arnsby
EntityIndividual
Shares28,000
Max Price€1.55
Buy€15,06126 Nov 19
Guy Saint-Jacques
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,680
Max Price€1.56
Sell€53,08721 Nov 19
Prabhu Rao
EntityIndividual
Role
Member of the Board of Directors
COO & Director
Shares49,545
Max Price€1.08
Buy€6,96221 Nov 19
Simon Arnsby
EntityIndividual
Shares5,000
Max Price€1.39
Sell€193,80220 Nov 19
William Beckett
EntityIndividual
Role
Lead Director
Lead Director
Shares138,000
Max Price€1.42
Sell€6,99608 Nov 19
Simon Arnsby
EntityIndividual
Shares5,000
Max Price€1.40
Sell€16,81414 Oct 19
Simon Arnsby
EntityIndividual
Shares15,000
Max Price€1.12
Buy€24,96824 Sep 19
Simon Arnsby
EntityIndividual
Shares20,700
Max Price€1.21
Sell€1,061,26610 Jul 19
Kurt Sorschak
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares1,000,000
Max Price€1.07

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 28.2%.


Management Team

  • Prabhu Rao

    COO & Director

    • Tenure: 4.8yrs
    • Compensation: CA$265.14k
  • Kurt Sorschak (60yo)

    Co-Founder

    • Tenure: 11yrs
    • Compensation: CA$527.29k
  • Louis Dufour (63yo)

    Chief Financial Officer

    • Tenure: 3.3yrs
    • Compensation: CA$154.29k
  • Peter Cheng

    General Manager of Xebec Adsorption Shanghai Co Ltd

    • Tenure: 5.9yrs
    • Compensation: CA$176.72k
  • Sandi Murphy

    Director of Investor Relations & Communications


    Board Members

    • Brian Levitt (71yo)

      Member of Advisory Board

      • Joe Petrowski (64yo)

        Independent Director

        • Tenure: 2.8yrs
        • Compensation: CA$15.50k
      • Prabhu Rao

        COO & Director

        • Tenure: 4.8yrs
        • Compensation: CA$265.14k
      • Hubert Sorschak

        Member of The Advisory Board

        • Kurt Sorschak (60yo)

          Co-Founder

          • Tenure: 11yrs
          • Compensation: CA$527.29k
        • Bill Beckett

          Lead Director

          • Compensation: CA$149.76k
        • Guy Saint-Jacques

          Independent Director

          • Tenure: 2.6yrs
          • Compensation: CA$24.35k

        Company Information

        Xebec Adsorption Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Xebec Adsorption Inc.
        • Ticker: XB6
        • Exchange: DB
        • Founded: 1967
        • Industry: Industrial Machinery
        • Sector: Capital Goods
        • Market Cap: CA$216.557m
        • Listing Market Cap: CA$149.079m
        • Shares outstanding: 74.67m
        • Website: https://www.xebecinc.com

        Number of Employees


        Location

        • Xebec Adsorption Inc.
        • 730, Boulevard Industriel
        • Blainville
        • Quebec
        • J7C 3V4
        • Canada

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        XBCTSXV (TSX Venture Exchange)YesCommon SharesCACADJun 2009
        XB6DB (Deutsche Boerse AG)YesCommon SharesDEEURJun 2009
        XEBE.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 2009

        Biography

        Xebec Adsorption Inc. provides gas generation, purification, and filtration solutions for the industrial, energy, and renewables marketplace in Canada, China, the United States, France, and internationally. The company designs, engineers, and manufactures various products that transform raw gases into marketable sources of clean energy. It operates through three segments: Systems, Infrastructure, and Support. The company designs and builds various systems that deliver renewable gases, including biogas to renewable natural gas systems; hydrogen purification systems; natural gas dehydration units for refueling stations; and solutions for the generation of renewable hydrogen, such as filtration and separation products. It also designs, develops, builds, sells, and services a range of products comprising desiccant, refrigerant, and modular air dryers for industrial applications under the ADX Solutions brand name; compressed air and gas filtration products under the FSX Solutions brand name, as well as alternative brand replacements; spare parts and replacement filter elements; and dew-point probes and calibration services. In addition, the company is involved in the setup, ownership, and management of renewable gas projects. Xebec Adsorption Inc. was founded in 1967 and is headquartered in Blainville, Canada. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/28 21:31
        End of Day Share Price2020/01/28 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.