Anglo-American Platinum Stocks – GuruFocus.com
The stock of Anglo American Platinum (OTCPK: ANGPY, 30-year Financials) is estimated to be slightly overvalued, according to the calculation of GuruFocus Value. The GuruFocus Value is GuruFocus’s estimate of the fair value at which the stock is to trade. It is calculated based on the historical multiples at which the stock has traded, the company’s past growth, and analysts’ estimates of the company’s future performance. If a stock’s price is significantly above the GF value line, it is overvalued and its future performance may be poor. On the other hand, if it is significantly below the GF value line, its future return is likely to be higher. At its current price of $ 21.8405 per share and market cap of $ 34.5 billion, Anglo American Platinum shares are showing signs of being slightly overvalued. The GF value for Anglo American Platinum is shown in the table below.
Since Anglo American Platinum is relatively overvalued, its long-term stock return is likely to be lower than its business growth, which has averaged 28% over the past five years.
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It is always important to check the financial strength of a company before buying its shares. Investing in companies with low financial strength presents a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a business. Anglo American Platinum has a cash-to-debt ratio of 23.71, which is within the average for companies in the metals and mining industry. The overall financial strength of Anglo American Platinum is 8 out of 10, indicating that the financial strength of Anglo American Platinum is strong. Here is the debt and cash flow of Anglo American Platinum over the past few years:
Investing in profitable businesses carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a business with high profit margins offers better performance potential than a business with low profit margins. Anglo American Platinum has been profitable for 7 years in the last 10 years. In the past 12 months, the company reported sales of $ 8.8 billion and earnings of $ 1.253 per share. Its operating margin of 28.00% is better than 83% of companies in the metals and mining industry. Overall, GuruFocus rates Anglo American Platinum’s profitability as fair. Here is Anglo American Platinum’s sales and net income for the past few years:
One of the most important factors in the valuation of a business is growth. Long-term equity performance is closely linked to growth, according to GuruFocus research. Companies that grow faster create more shareholder value, especially if that growth is profitable. Anglo American Platinum’s average annual revenue growth is 28%, which ranks better than 90% of companies in the metals and mining industry. The 3-year average EBITDA growth is 112.6%, which ranks better than 100% of companies in the metals and mining industry.
Another way to assess a company’s profitability is to compare its return on invested capital (ROIC) to its weighted cost of capital (WACC). Return on invested capital (ROIC) The extent to which a business generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company should pay on average to all its security holders to finance its assets. If the ROIC is higher than the WACC, it indicates that the company is creating shareholder value. Over the past 12 months, Anglo American Platinum’s ROIC was 33.81, while its WACC was 19.49. Anglo American Platinum’s historical ROIC vs WACC comparison is shown below:
In conclusion, the Anglo American Platinum stock (OTCPK: ANGPY, 30 years Financials) seems to be slightly overvalued. The company’s financial position is solid and its profitability is fair. Its growth ranks better than 100% of companies in the metals and mining industry. To learn more about Anglo American Platinum, you can view its 30-year financial data here.
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