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GuruFocus has detected 4 Warning Signs with Energy Company of Minas Gerais $CIG.
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Energy Company of Minas Gerais (NYSE:CIG)
Intrinsic Value: Projected FCF
$6.74 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Energy Company of Minas Gerais's projected FCF intrinsic value is $6.74. The stock price of Energy Company of Minas Gerais is $2.93. Therefore, Energy Company of Minas Gerais's Price to Intrinsic Value: Projected FCF Ratio of today is 0.4.

CIG' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.29   Max: 1949317.74
Current: 0.43

0.29
1949317.74

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Energy Company of Minas Gerais was 1949317.74. The lowest was 0.29. And the median was 0.90.

CIG's Price-to-Intrinsic-Value-Projected-FCF is ranked higher than
92% of the 286 Companies
in the Global Utilities - Diversified industry.

( Industry Median: 1.54 vs. CIG: 0.43 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Energy Company of Minas Gerais's FCF(6 year avg) is calculate as

Energy Company of Minas Gerais Quarterly Data

201406201409201412201503201506201509201512201603201606201609
total_freecashflow 435469763911729179107198186
201112201203201206201209201212201303201306201309201312201403
total_freecashflow -214256151309-26479614244210233
201012201103201106201109
total_freecashflow 299185261455

Add all the Free Cash Flow together and divide 6 will get Energy Company of Minas Gerais's FCF(6 year avg) = $802.51.

Energy Company of Minas Gerais's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Sep16)*0.8)/Shares Outstanding
=(9.52035159596*802.507204089+4380.91725071*0.8)/1258.842
=8.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Energy Company of Minas Gerais's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=2.93/8.85328305044
=0.33

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Energy Company of Minas Gerais Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Projected FCF 0.001.683.229.6510.809.998.3111.458.264.88

Energy Company of Minas Gerais Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Projected FCF 14.507.138.264.807.606.084.886.177.217.10
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