Exxaro Resources Limited, a diversified resources company, operates in the coal, titanium dioxide, ferrous, and energy markets in South Africa, Europe, the United States, and Australia.
The last earnings update was 9 days ago.
Discounted Cash Flow Calculation for OTCPK:EXXA.Y using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
OTCPK:EXXA.Y DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Exxaro Resources's share price is below the future cash flow value, and at a moderate discount (> 20%).
Exxaro Resources's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Exxaro Resources's earnings available for a low price, and how does
this compare to other companies in the same industry?
Exxaro Resources's earnings are expected to grow by 1.6% yearly, however this is not considered high growth (20% yearly).
Exxaro Resources's revenue is expected to grow by 6.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Exxaro Resources's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
Oil and Gas
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
5/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Exxaro Resources's finances.
The net worth of a company is the difference between its assets and liabilities.
Exxaro Resources is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Exxaro Resources's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Exxaro Resources's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 2.2x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Mxolisi Donald Mbuyisa Mgojo serves as Non Executive Director at Talent 10 Capital Partners (Pty) Ltd. He is a Founder and Non Executive Director of Talent10 Holdings. He has been a Director of Tronox Limited since June 2016. He has been the Chief Executive Officer of Exxaro Resources Limited (“Exxaro”) since April 2016 and an Executive Director since June 2015. Mr. Mgojo served as Executive Head of Carbon Operations at Exxaro until May 2015. He served as an Executive Head of Coal at Exxaro since August 2008 and served as its Executive Head of Operations. He served as an Executive General Manager of Coal at Exxaro since August 2008. He served as an Executive General Manager of Base Metals and Industrial Minerals of Exxaro. Prior to joining Exxaro, Mr. Mgojo served as Head of group marketing of Eyesizwe Coal. He serves as a Director of Glen Douglas Dolomite (Pty) Limited, Exxaro Base Metals (Pty) Limited, Exxaro Ferroalloys and Alloystream (Pty) Limited. He serves as a Director of Richards Bay Coal Terminal Co. Ltd. Mr. Mgojo holds a Bachelor of Science degree (Computer Science) from Northeastern University in the United States, a Bachelor of Science degree with honors (Energy Studies) from Rand Afrikaans University, a Master in Business Administration degree from Henley Business School and has attended the Advanced Management Program at the University of Pennsylvania’s Wharton School in the United States.
Mxolisi's compensation has increased by more than 20% in the past year.
Mxolisi's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Exxaro Resources management team is about average.
Mxolisi Mbuyisa Mgojo
CEO & Director
Finance Director & Director
Executive Head of Projects & Technology
Executive Head of Human Resources
Executive Head of Coal Operations
Executive Head of Sustainability
Executive Head of Stakeholder Affairs
Executive Head of Business Development
Group Company Secretary & Legal
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Exxaro Resources board of directors is less than 3 years, this suggests a new board.
Exxaro Resources Limited, a diversified resources company, operates in the coal, titanium dioxide, ferrous, and energy markets in South Africa, Europe, the United States, and Australia. The company operates through Coal; Ferrous; TiO2 and Alkali Chemicals; Energy; and Other segments. It produces thermal coal, metallurgical coal, and semi-soft coking coal products in the Waterberg and Mpumalanga regions; offers inorganic minerals and chemicals, and iron ore; and operates two wind farms. The company was formerly known as Kumba Iron Ore Limited and changed its name to Exxaro Resources Limited in November 2006. The company is based in Pretoria, South Africa.
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