VALE : NYSE : Basic Materials
$5.64 up 0.01 | 0.18%
Today's Range: 5.60 - 5.75
Avg. Daily Volume: 25,054,300
08/25/16 - 3:59 PM ET

Financial Analysis


VALE SA's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, however the growth has outpaced the average competitor within the industry. VALE SA has weak liquidity. Currently, the Quick Ratio is 0.77 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 19.32% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)6626.06965.0
EBITDA ($mil)2238.01956.0
EBIT ($mil)1339.01040.0
Net Income ($mil)1106.01675.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4306.03264.0
Total Assets ($mil)100970.0107348.0
Total Debt ($mil)32431.030625.0
Equity ($mil)39371.048800.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin40.738.21
EBITDA Margin33.7728.08
Operating Margin20.2114.93
Sales Turnover0.250.29
Return on Assets-7.72-4.4
Return on Equity-19.82-9.69
Debt Q2 FY16 Q2 FY15
Current Ratio1.581.74
Debt/Capital0.450.39
Interest Expense824.0374.0
Interest Coverage1.632.78


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)5153.385153.38
Div / share0.00.2
EPS0.210.33
Book value / share7.649.47
Institutional Own % n/a n/a
Avg Daily Volume2.5396032E73.804864E7

Valuation


SELL. 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 0.77 indicates a significant discount versus the S&P 500 average of 2.83 and a discount versus the industry average of 2.02. The price-to-sales ratio is well below both the S&P 500 average and 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 338.76   VALE 6.61 Peers 14.07

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 significant 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 22.73 Peers 28.50   VALE NA Peers 0.95

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 0.77 Peers 2.02   VALE -65.21 Peers -145.00

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.

 

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

VALE is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VALE 1.23 Peers 4.02   VALE -21.03 Peers -13.83

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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