Miscellaneous Chemical Products
Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies solder technologies, fluxes, cleaners, and other attachment materials for the electronics assembly industry; proprietary liquid chemical processes to manufacture printed circuit boards; and advanced copper interconnects, die attachment, wafer bump processes, and photomask technologies for integrated circuit fabrication and semiconductor packaging. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.
Discounted Cash Flow Valuation of Element Solutions Inc
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $275.7M | $320.2M | $368M | $418.3M | $470.3M | $522.9M | $574.9M | $625.1M | $671.8M | $713.7M | $749.4M | $7.494B |
DCF | $278.5M | $278.2M | $275M | $268.9M | $260M | $248.6M | $235M | $219.6M | $202.9M | $185.2M | $1.852B | |
Value | $4.304B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | -12% | -2.1% | -7.8% | -17% | 5% | 4.1% | 8.5% | 7.3% | 5.1% | 5.6% |
ROA | 0.7% | 2.5% | 2.2% | 2.6% | 5.8% | 5.2% | 5.8% | 6.6% | 3.5% | 3.8% |
ROE | -14% | -2.7% | -10% | -15% | 4.2% | 3.3% | 8.1% | 8% | 5% | 5.6% |
The average Net Margin over the past 5 years is +2.24%.
The trend of Net Margin over the past 5 years is +3.41%.
The average ROA over the past 5 years is +4.93%.
The trend of ROA over the past 5 years is +0.21%.
The average ROE over the past 5 years is +2.28%.
The trend of ROE over the past 5 years is +3.31%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 22.55 | 58.14 | 67.45 | -185.87 | 10.98 | 6.24 | 6.95 | 7.76 | 6.98 | 7.04 |
Debt Equity | 2.37 | 1.85 | 1.94 | 2.49 | 0.70 | 0.66 | 0.78 | 0.82 | 0.84 | 0.83 |
MIN | ||||||||||
Graham Stability | - | - | - | - | - | - | - | 100% | 76% | 76% |
The Debt/FCF trailing twelve month is 7.04.
The trend of Debt/FCF over the past 5 years is 27.30.
Graham’s Stability measure stands at 0.76.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | -6% | 3.5% | 8% | -8.5% | -14% |
Net Income | - | - | 16% | -37% | -23% |
Stockholders Equity | -2.9% | 1.5% | 0.35% | -0.2% | -0.18% |
FCF | 17% | - | 4.4% | 13% | -8.5% |
The Revenue CAGR over the past 5 years is +3.54%.
The trend of Revenue growth rate over the past 5 years is -14.12%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is -23.35%.
The Equity CAGR over the past 5 years is +1.45%.
The trend of Equity growth rate over the past 5 years is -0.18%.
The FCF CAGR over the past 5 years is -.
The trend of FCF growth rate over the past 5 years is -8.54%.