WLT  Walter Energy Inc.

Exchange

NYSE

Sector

Energy

Industry

Coal Mining

Market Cap.

13.27M

Vuru Grade

14.99/100

Current Price

$0.16
+0.0000 (+0.0000%)

Growth Price

$0.14
Overvalued by 16.36%

Company Metrics

  • P/E 10.34
  • P/S 0.0104
  • P/B 0.0673
  • EPS -6.626
  • Cash ROIC -0.84%
  • Cash Ratio 0.07
  • Dividend 0.04 / 0%
  • Avg. Vol. 1.83M
  • Shares 60.38M
  • Market Cap. 13.27M

Company Description

Walter Energy, Inc. produces and exports metallurgical coal for the steel industry primarily in the United States. The company also produces steam coal, coal bed methane gas, metallurgical coke, and other related products. It principally serves electric utility and industrial customers. The company was formerly known as Walter Industries, Inc. and changed its name to Walter Energy, Inc. in April 2... more


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

News

Walter Energy Docket Name Change Requested
Bankrupt Company News (press release) (blog) - Jul 1, 2016
The Debtors request the following name changes: Walter Energy, 15-2741 to New WEI….The relief requested herein is necessary to comply with the terms of the APA, as approved by the Court.
Walter Energy Cleared To End Retiree Benefits In Ch. 11
Law360 (subscription) - May 19, 2016
Law360, New York (May 19, 2016, 4:31 PM EDT) -- An Alabama federal judge on Wednesday let stand a bankruptcy court ruling that allows Walter Energy to terminate collective bargaining agreements and halt payments to the coal company's retirees, ...
Jaime King & Jamie Chung Sample New WEI Beauty Products!
Just Jared - Sep 22, 2016
Jaime King and Jamie Chung pose for pics as the celebrate WEI Beauty's Detoxifying Skincare Line at a luncheon at NeueHouse on Wednesday (September 21) in Los Angeles.
Jamie Chung Says Husband Bryan Greenberg Is 'Like A Thief:' 'He'll Steal My ... - PEOPLE Style
Pei Wei Introduces Two New Thai Rice Bowls
QSR magazine (press release) (registration) - Jan 10, 2017
Pei Wei, a leader in delivering a handcrafted Pan-Asian culinary experience, expanded its artisan cooking and cross-cultural Asian offerings with the introduction of two nutritious new rice bowls featuring the bold tastes of Thailand. The innovative ...
Google, Facebook Build a Data Highway to Asia—Financed by a Chinese Developer
Wall Street Journal (subscription) - Mar 15, 2017
BEIJING—A real-estate magnate is financing Google's and Facebook Inc.'s new trans-Pacific internet cable, the first such project that will be majority-owned by a single Chinese company.
China Inc.'s Large Dollar Debts Fuel Beijing's Efforts to Curb Yuan Plunge
Wall Street Journal - Jan 3, 2017
BEIJING—The large pile of foreign debt owed by Chinese companies, from state-owned banks to airlines, is giving added impetus to Beijing's efforts to keep the yuan from falling too steeply against the rallying dollar.
The News Lens raises Series B to challenge Asia's traditional media companies
TechCrunch - Mar 23, 2017
Other investment firms and angel investors that took part were Walden International, Trinity Investment, Angelvest, Dorcas Investments, Vic Chen, Ogilvy PR Taiwan managing director Wei Shang, Irene Chen, board director of the Foundation for Excellent ...
RESTAURANT REVIEW: New Pei Wei in Little Rock off to wokky start
Arkansas Online - Dec 8, 2016
But based on three recent visits -- two dine-in and one carryout -- the new outlet, while promising, still has a "wei" to go. Diners can order at the counter and have their food brought to them at tables (however, they'll pick up their own napkins ...
Who Decides 'Fair Value?' In Dell's Case, a Judge
New York Times - Jun 7, 2016
Last week, the Delaware Court of Chancery handed down a startling decision with broad implications for the future of corporate takeovers: It determined that the board of Dell Inc. sold the company for $6 billion too little when the formerly public ...
Pei Wei Debuts Restaurant Redesign and New Menu
QSR magazine (press release) (registration) - Jul 14, 2016
Pei Wei, a leader in Asian-inspired fast-casual cuisine, taps Tulsa, Oklahoma, as its test market for the introduction of a new restaurant design and menu additions that highlight nutrition and flavors spanning a variety of Asian cuisines. Guests at ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for WLT 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 WLT'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.

$0.16 Current Price

$0.14 Growth Price (DCF)

Overvalued by 16.36%


Growth Rate Assumed by Market: 3.91%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

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

WLT 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.

WLT has lost $0.84 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 270.16M -61.61M -180.97M -232.70M 1.29M
divided by
Invested Capital 6.20B 5.10B 4.85B 4.50B 83.77M
Cash ROIC 4.36% -1.21% -3.73% -5.18% 1.54%

Very Poor Return on Equity over the past 5 years

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

WLT has generated a $60.66 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 349.18M -1.06B -359.00M -470.57M -
divided by
Stockholders' Equity 2.12B 1.01B 752.69M 281.58M -
Return on Equity 16.45% -104.93% -47.70% -167.12% -

Mediocre Business Performance over the past 10 years

WLT 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.

WLT has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 144.23M -15.75M 255.20M 206.74M 410.41M 270.16M -61.61M -180.97M -232.70M 1.29M

Weak Balance Sheet

WLT's financial position is not ideal. The key is to check whether WLT 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
2006200720082009201020112012201320142015
Cash 217.41M 106.47M 173.95M 165.28M 293.41M 128.43M 116.60M 260.82M 468.53M 12.85M
Current Assets 2.22B 2.17B 2.28B 487.90M 635.54M 841.06M 815.82M 949.35M 970.78M 212.44M
Total Assets 2.68B 2.77B 3.07B 1.26B 1.66B 6.81B 5.77B 5.59B 5.39B 489.33M
Current Liabilities 159.26M 169.08M 175.38M 145.98M 193.85M 485.50M 554.25M 479.90M 421.61M 176.06M
Total Liabilities 2.68B 2.65B 2.44B 999.96M 1.06B 4.69B 4.76B 4.84B 5.10B 272.68M
Stockholder' Equity 1.91M 114.71M 630.27M 259.40M 595.07M 2.12B 1.01B 752.69M 281.58M -
Current Ratio 13.97 12.81 13.00 3.34 3.28 1.73 1.47 1.98 2.30 1.21
TL-to-TA 1.00 0.96 0.79 0.79 0.64 0.69 0.82 0.87 0.95 0.56

Consistent Reinvestment of Profits over the past 10 years

WLT has consistently retained profits. This may put WLT in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, WLT can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings -398.56M -290.99M 50.99M 50.85M 411.38M 730.52M -347.45M -698.93M -1.17B 129.05M
Retained Earnings Growth - 26.99% 117.52% -0.27% 708.98% 77.58% -147.56% -101.16% -67.33% 111.03%

Highly Competitive Industry over the past 10 years

It's likely that WLT is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely WLT invests heavily in R&D and Sales, General & Administrative expenses.

Only $0.26 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 198.37M 112.00M 346.58M 137.16M 385.80M 349.18M -1.06B -359.00M -470.57M -
divided by
Revenue 1.31B 1.24B 1.49B 966.83M 1.59B 2.57B 2.40B 1.86B 1.41B 630.28M
Net Profit Margin 15.14% 9.02% 23.31% 14.19% 24.30% 13.58% -44.18% -19.29% -33.44% -

Inconsistent Gross Profit Margins over the past 10 years

WLT 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.

$39.67 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
2006200720082009201020112012201320142015
Gross Profit 606.32M 537.63M 757.24M 380.05M 821.21M 2.57B 602.90M 302.33M 140.59M 87.03M
divided by
Revenue 1.31B 1.24B 1.49B 966.83M 1.59B 2.57B 2.40B 1.86B 1.41B 630.28M
Gross Margin 46.29% 43.31% 50.92% 39.31% 51.72% 100.00% 25.12% 16.25% 9.99% 13.81%

High Capital Intensity over the past 10 years

WLT 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.

76.01% 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
2006200720082009201020112012201320142015
Capital Expenditure 101.06M 156.39M 101.81M 96.30M 157.48M 436.71M 391.51M 153.90M 93.00M 41.17M
divided by
Net Income 198.37M 112.00M 346.58M 137.16M 385.80M 349.18M -1.06B -359.00M -470.57M -
Capital Expenditure Ratio 50.94% 139.64% 29.38% 70.21% 40.82% 125.07% -36.92% -42.87% -19.76% -

Inconsistent Dividend History over the past 10 years

WLT 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
2006200720082009201020112012201320142015
Dividend Paid - 10.41M 16.23M 21.19M 25.27M 30.04M 31.25M 16.89M 2.63M -
divided by
Shares Outstanding 51.26M 52.58M 54.59M 53.08M 53.70M 60.26M 62.54M 62.56M 66.30M 60.38M
Dividend Paid Per Share - 0.20 0.30 0.40 0.47 0.50 0.50 0.27 0.04 -
Price at Year End 26.03 35.08 15.95 76.36 128.92 60.45 33.82 16.78 1.45 0.16
Dividend Yield - 0.56% 1.86% 0.52% 0.36% 0.82% 1.48% 1.61% 2.73% -

History of Stock Buybacks over the past 10 years

WLT 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
2006200720082009201020112012201320142015
Shares Outstanding 51.26M 52.58M 54.59M 53.08M 53.70M 60.26M 62.54M 62.56M 66.30M 60.38M
Stock Bought Back - -2.52% -3.67% 2.84% -1.16% -10.88% -3.64% -0.04% -5.63% 9.81%
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Discussion
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1
Posted by pbanik  (on November 7, 2012)
@JeffBarron The total debt to equity ratio is over 200.
http://finance.yahoo.com/q/ks?s=WLT+Key+Statistics Any stock with a total debt to equity ratio 100 or over is considered risky. Ideally you want stocks with no debt, or a low total debt to equity ratio.
http://wiki.answers.com/Q/What_is_ideal_debt_to_equity_ratio
1
Posted by JeffBarron  (on November 5, 2012)
A lot of money to be made in this stock. Just got to get the timing right. Maybe someone with more insight into coal business (aside from commodities aspect) can tell me why WLT is so undervalued.