VALE : NYSE : Basic Materials
$10.765 up 0.25 | 2.3%
Today's Range: 10.49 - 10.93
Avg. Daily Volume: 3.07712E7
02/27/17 - 2:39 PM ET

Financial Analysis


VALE SA's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. VALE SA has weak liquidity. Currently, the Quick Ratio is 0.92 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 6.01% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)7324.06505.0
EBITDA ($mil)2868.01788.0
EBIT ($mil)1930.0896.0
Net Income ($mil)575.0-2117.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)5484.04462.0
Total Assets ($mil)102087.099025.0
Total Debt ($mil)32107.029278.0
Equity ($mil)39719.042259.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin44.6535.76
EBITDA Margin39.1527.48
Operating Margin26.3513.77
Sales Turnover0.250.29
Return on Assets-5.0-5.46
Return on Equity-12.87-12.79
Debt Q3 FY16 Q3 FY15
Current Ratio1.81.73
Debt/Capital0.450.41
Interest Expense883.0560.0
Interest Coverage2.191.6


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)5153.385153.38
Div / share0.00.0
EPS0.11-0.41
Book value / share7.718.2
Institutional Own % n/a n/a
Avg Daily Volume3.0593358E72.8798132E7

Valuation


HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. Conducting a second comparison, its price-to-book ratio of 1.39 indicates a significant discount versus the S&P 500 average of 2.96 and a discount versus the industry average of 2.01. The price-to-sales ratio is similar to the S&P 500 average, but it is significantly below the industry average, indicating a discount. After reviewing these and other key valuation criteria, VALE SA proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
VALE NM Peers 106.27   VALE 10.29 Peers 11.58

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

VALE's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

VALE is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
VALE 15.31 Peers 22.90   VALE NA Peers 0.62

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

VALE is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VALE 1.39 Peers 2.01   VALE 4.77 Peers 134.79

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

VALE is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, VALE is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VALE 2.17 Peers 3.22   VALE -11.17 Peers -5.55

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

VALE is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

VALE significantly trails its peers on the basis of sales growth

 

 

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