MeritValue

HARMONY GOLD MINING CO LTD

HMYdata completeness 100%3 fiscal years on file

Data notes: no data for concept 'interestExpense'

The thesis, from the filings

HARMONY GOLD MINING CO LTD earns about -3% on invested capital, but has diluted owners by 15% over 3 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $0.35 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2016FY 2017FY 2018
Revenue$1.26B1$1.42B1$1.58B1
Net income$66M2$17M2−$321M2
Operating cash flow$312M3$280M3$303M3
Capital expenditure$168M4$286M4$355M4
Free cash flow (derived)$144M3−$6M3−$52M3
Total debt—$163M5$407M5
Cash & equivalents$85M6$95M6$51M6
Diluted shares435.7M438.4M500.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$36.68
your share of equity
Profit it earned you last year
−$6.42
Free cash flow it threw off
−$1.04
Debt you’d be carrying
$8.14

10 shares is a claim on $36.68 of net worth that earned you −$6.42 and generated −$1.04 of cash last year, against $8.14 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-3% avg · 3y
FY16 4%FY17 -1%FY18 -12%

It earned an average -3% on invested capital over 3 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+15% shares · 3y

Share count is up 15% over 3 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 150% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$0.35
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$17M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F/A · period ending 2016-06-30 · accession 0001628280-18-014569 (Revenue)
  2. 20-F/A · period ending 2016-06-30 · accession 0001628280-18-014569 (ProfitLossAttributableToOwnersOfParent)
  3. 20-F/A · period ending 2016-06-30 · accession 0001628280-18-014569 (CashFlowsFromUsedInOperatingActivities)
  4. 20-F/A · period ending 2016-06-30 · accession 0001628280-18-014569 (PurchaseOfPropertyPlantAndEquipmentClassifiedAsInvestingActivities)
  5. 20-F/A · period ending 2017-06-30 · accession 0001628280-18-014569 (Borrowings)
  6. 20-F/A · period ending 2016-06-30 · accession 0001628280-18-014569 (CashAndCashEquivalents)