BTU  Peabody Energy Corporation

Exchange

NYSE

Sector

Energy

Industry

Coal Mining

Market Cap.

2.41B

Vuru Grade

4.50/100

Current Price

$24.76
+0.79 (+3.30%)

Company Metrics

  • P/E 10.48
  • P/S 0.47
  • P/B 0.92
  • EPS -24.80
  • Cash ROIC -1.18%
  • Cash Ratio 0.86
  • Dividend 0 / N/A %
  • Avg. Vol. 1.18M
  • Shares 18.30M
  • Market Cap. 2.41B

Company Description

Peabody Energy Corporation, through its subsidiaries, engages in the exploration, mining, and production of coal. The company mines and sells thermal coal to electric utilities and metallurgical coal to industrial customers. It owns interests in 28 coal operations located in the United States and Australia, as well as owns joint venture interests in a Venezuelan mine. The company also markets, bro... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

What's Going On With Peabody Energy?
Seeking Alpha - May 25, 2017
Peabody went into Chapter 11, wiping out the stockholders and giving little value to unsecured bondholders. The company is now a "hedge fund hotel", with 80% of its stock held by six funds.
Peabody Energy Corp (BTU) PRESIDENT AND CEO Glenn L Kellow Bought $—……,–'5 ... - GuruFocus.com
Peabody Energy Corporation (NYSE:BTU) Stock Valuation in Focus - Lenox Ledger
Peabody Energy: Has It Bottomed?
Seeking Alpha - Apr 19, 2017
Australian coking prices have surged, its stock is getting analyst recommendations, and the South32 deal fell apart which should be a positive.
Taking a Look at the Data Behind Peabody Energy Corporation (BTU) - StockNewsJournal
Peabody Energy: Just Too Darn Cheap? - Barron's
Peabody Energy: The Nightmare Continues
Seeking Alpha - Apr 15, 2017
Peabody Energy stock is still plunging as hedge fund co-proponents continue to cash in on their 'financing' at annualized rates of as much as 4992%.
Point State Capital is Buying Peabody Energy Corp (NYSE:BTU) Shares - Small Cap Exclusive (press release)
Peabody Energy emerges from bankruptcy protection
Reuters - Apr 3, 2017
U.S. coal miner Peabody Energy Corp said it had emerged from Chapter 11 protection and was expected to begin trading on the New York Stock Exchange on Tuesday under the ticker symbol BTU.
What I Learned From The Peabody Energy Reorganization - Seeking Alpha
Peabody Energy exits bankruptcy - St. Louis Business Journal
Top US coal miner Peabody eyes bankruptcy exit in April
Reuters - Mar 16, 2017
LOUIS Peabody Energy Corp, the world's largest private sector coal producer, said on Thursday it expects to exit its Chapter 11 bankruptcy in early April after a U.S.
Judge to sign order approving Peabody Energy's Chapter 11 exit - Seeking Alpha
Judge to approve Peabody's bankruptcy exit - STLtoday.com
Dangerous Legal Precedent Set By Peabody Energy
Seeking Alpha - Mar 29, 2017
The confirmation of the Peabody Energy reorganization plan now in appeal has set a dangerous legal precedent. Now there are co-proponents developing reorganization plans for other companies such as Breitburn Energy Partners where they also are trying ...
Sentiment Turns Bullish on Peabody Energy Corporation (OTCMKTS:BTUUQ) - The Oracle Dispatch
Peabody Energy: How To Earn 4992% Annualized
Seeking Alpha - Apr 13, 2017
Peabody's offering also enables shareholders to sell 19.4 million shares of the company's convertible preferred stock, according to a filing with the U.S.
Why Peabody Energy Got Away With The Reorganzation
Seeking Alpha - Apr 21, 2017
Investors in Peabody Energy stocks and bonds saw their pockets picked when the reorganization plan was approved. I just learned late last year Peabody Energy settled an SEC lawsuit and agreed to 'Lie Less'. Will the authorities ever address my ...
What I Learned From Peabody Energy Is Getting More Shocking
Seeking Alpha - Apr 25, 2017
Forensic analysis shows no votes (those who didn't submit a ballot at all) appear to be $426 million, or 2x-plus those who voted to reject the Peabody Energy reorg plan. I also have been hearing from more and more retail noteholders who got the short ...
Peabody Energy Corporation (BTU) Current valuation Provides Excellent Buying ... - Smаrt Stоck Nеws
Peabody Energy Corp (BTU) Files Form 4 Insider Buying : Associates, Lp Elliott ... - Energy Index
Coal revival means big stock bonuses at bankrupt Peabody
Reuters - Feb 28, 2017
A year ago, Peabody Energy Corp's BTUUQ.PK chief executive was presiding over $2 billion of losses as the world's largest private sector coal miner spiraled into bankruptcy.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for BTU to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate BTU's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$24.76 Current Price

$-47.19 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$41.99 Book Price

Undervalued by 69.60%


Very Poor Cash Return on Invested Capital over the past 5 years

BTU has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

BTU has lost $1.18 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 252.60M -3.50M -151.10M -150.40M -185.50M
divided by
Invested Capital 13.58B 11.91B 11.03B 3.37B 9.89B
Cash ROIC 1.86% -0.03% -1.37% -4.47% -1.87%

Very Poor Return on Equity over the past 5 years

BTU has shown an inability to deliver results for shareholders. This could be due to poor management, BTU operating in a highly competitive industry, or having a weak business in general.

BTU has generated a $98.39 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -575.10M -512.60M -777.30M -1.99B -731.90M
divided by
Stockholders' Equity 4.90B 3.91B 2.72B 916.90M 330.20M
Return on Equity -11.73% -13.11% -28.53% -216.92% -221.65%

Mediocre Business Performance over the past 10 years

BTU isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

BTU has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -154.07M 841.00M 924.30M 1.09B 786.30M 252.60M -3.50M -151.10M -150.40M -185.50M

Weak Balance Sheet

BTU's financial position is not ideal. The key is to check whether BTU is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 45.28M 449.70M 988.80M 1.30B 799.10M 558.80M 444.00M 298.00M 261.30M 872.30M
Current Assets 1.93B 1.97B 2.19B 2.96B 3.01B 2.58B 1.99B 1.71B 1.38B 2.09B
Total Assets 9.67B 9.82B 9.96B 11.36B 16.73B 15.81B 14.13B 13.19B 11.02B 11.78B
Current Liabilities 2.19B 1.86B 1.31B 1.51B 1.82B 1.67B 1.78B 1.86B 7.39B 1.01B
Total Liabilities 7.15B 6.92B 6.21B 6.70B 11.25B 10.90B 10.22B 10.47B 10.10B 11.45B
Stockholder' Equity 2.52B 2.90B 3.75B 4.66B 5.49B 4.90B 3.91B 2.72B 916.90M 330.20M
Current Ratio 0.88 1.06 1.67 1.95 1.65 1.54 1.12 0.92 0.19 2.07
TL-to-TA 0.74 0.70 0.62 0.59 0.67 0.69 0.72 0.79 0.92 0.97

Low or No Reinvestment of Profits over the past 10 years

BTU has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to BTU operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 941.42M 1.80B 2.18B 2.88B 3.74B 3.07B 2.45B 1.57B -503.40M -1.24B
Retained Earnings Growth - 91.57% 21.09% 31.81% 30.07% -18.10% -20.11% -35.89% -132.05% -146.96%

Loss Making Entity over the past 10 years

BTU has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$2.54 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 264.29M 953.50M 463.00M 802.20M 946.30M -575.10M -512.60M -777.30M -1.99B -731.90M
divided by
Revenue 4.57B 6.59B 6.01B 6.86B 7.97B 8.08B 7.01B 6.79B 5.61B 4.72B
Net Profit Margin 5.78% 14.46% 7.70% 11.69% 11.87% -7.12% -7.31% -11.44% -35.46% -15.52%

Inconsistent Gross Profit Margins over the past 10 years

BTU has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$29.12 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 999.89M 1.98B 1.54B 2.02B 7.97B 2.14B 1.28B 1.08B 601.50M 607.70M
divided by
Revenue 4.57B 6.59B 6.01B 6.86B 7.97B 8.08B 7.01B 6.79B 5.61B 4.72B
Gross Margin 21.86% 29.97% 25.69% 29.43% 100.00% 26.55% 18.22% 15.83% 10.72% 12.89%

High Capital Intensity over the past 10 years

BTU spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

85.21% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 470.43M 444.70M 123.60M - 846.90M 1.26B 725.90M 487.70M 136.00M 132.70M
divided by
Net Income 264.29M 953.50M 463.00M 802.20M 946.30M -575.10M -512.60M -777.30M -1.99B -731.90M
Capital Expenditure Ratio 178.00% 46.64% 26.70% - 89.50% -219.53% -141.61% -62.74% -6.84% -18.13%

Inconsistent Dividend History over the past 10 years

BTU has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 63.66M 64.90M 66.80M 79.40M 92.10M 91.90M 91.70M 92.30M 1.40M -
divided by
Shares Outstanding 269.17M 271.28M 267.50M 269.90M 270.30M 268.00M 267.10M 268.10M 18.10M 18.30M
Dividend Paid Per Share 0.24 0.24 0.25 0.29 0.34 0.34 0.34 0.34 0.08 -
Price at Year End 59.71 22.00 45.35 63.67 33.04 25.36 19.23 7.76 8.03 2.07
Dividend Yield 0.40% 1.09% 0.55% 0.46% 1.03% 1.35% 1.79% 4.44% 0.96% -

History of Stock Buybacks over the past 10 years

BTU has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 269.17M 271.28M 267.50M 269.90M 270.30M 268.00M 267.10M 268.10M 18.10M 18.30M
Stock Bought Back - -0.78% 1.41% -0.89% -0.15% 0.86% 0.34% -0.37% 1,381.22% -1.09%
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