Fundamental Valuation of NOV

The purpose of this thesis is to conduct a fundamental valuation of NOV to provide an equity value and share price as of 17 January 2023. To support the fundamental valuation of the company, I have also performed a relative valuation, using the EV/EBITDA and P/S multiples. I conduct a comprehensive examination of macroeconomic, industry-, and company-specific factors that drive value in the oilfield services and equipment industry. These analyses are utilized to make necessary assumptions, forecast NOV’s future performance, and ultimately estimate the company’s equity value and final price target. Acknowledging the accelerating global energy transition and growing public concern about climate change, companies that offer equipment and technologies supportive of cleaner energy sources have experienced considerable demand growth in recent years. Driven by regulatory changes, subsidies, volatile oil and gas prices, and the ongoing shift towards sustainable energy sources, the industry is continuously nudged to adapt and innovate. With its long history as a market leader in the global oilfield services and equipment industry, an extensive product portfolio, and a global customer base comprising several large upstream oil and gas companies, NOV is solidly positioned within the global energy markets. Amid a moderately competitive situation, NOV is poised to continue to grow the upcoming years, particularly as it ventures into the booming renewable energy market. Considering these factors, the fundamental valuation yields an estimated share price of $11,6 for NOV. Supported by a relative valuation using the EV/EBITDA multiple, this analysis suggests a potential downside relative to the current stock price. The final estimated price target of NOV’s stock is adjusted to$12,5, derived from a weighted average of the estimations from both fundamental and relative valuation methods, allocated with a 70/30 weight, respectively. While the estimates are characterized by a high degree of uncertainty, as investigated through a sensitivity analysis, the conclusion suggests a potential overvaluation of NOV. Hence, as of January 17, 2023, I would propose a sell recommendation.nhhma

Integration of mahalanobis-taguchi system and activity based costing in decision making for remanufacturing

Classifying components at the end of life (EOL) into remanufacture, repair or dispose is still a major concern to automotive industries. Prior to this study, no specific approach is reported as a guide line to determine critical crankpins that justifying economical remanufacturing process. Traditional cost accounting (TCA) has been used widely by remanufacturing industries but this is not a good measure of estimating the actual manufacturing costs per unit as compared to activity based costing (ABC). However, the application of ABC method in estimating remanufactured cost is rarely reported. These issues were handled separately without a proper integration to make remanufacturing decision which frequently results into uneconomical operating cost and finally the decision becomes less accurate. The aim of this work is to develop a suitable pattern recognition method for classifying crankshaft into three different EOL groups and subsequently evaluates the critical and non-critical crankpins of the used crankshaft using Mahalanobis-Taguchi System (MTS). A remanufacturability assessment technique was developed using Microsoft Excel spreadsheet on pattern recognition and critical crankpins evaluation, and finally integrates these information into a similar spreadsheet with ABC to make decision whether the crankshaft is to be remanufactured, repaired or disposed. The developed scatter diagram was able to recognize group pattern of EOL crankshaft which later was successfully used to determine critical crankpins required for remanufacturing process. The proposed method can serve as a useful approach to the remanufacturing industries for systematically evaluate and decide EOL components for further processing. Case study on six engine models, the result shows that three engines can be securely remanufactured at above 40% profit margin while another two engines are still viable to remanufacture but with less profit margin. In contrast, only two engines can be securely remanufactured due overcharge when using TCA. This inaccuracy affects significantly the overall remanufacturing activities and revenue of the industry. In conclusion, the proposed integration on pattern recognition, parameter evaluation and costing assists the decision making process to effectively remanufacture EOL automotive components as confirmed by Head of workshop of Motor Teknologi Industri Sdn. Bhd

Designing a supply network for a startup company

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2010.Cataloged from student submitted PDF version of thesis.Includes bibliographical references (p. 86-88).Our thesis introduces a supply chain framework catered for startup companies. Startup companies face unique circumstances such as constraints on financial and human resources, and greater uncertainty in demand. From our work with XL Hybrids, a startup company that hybridizes aftermarket vehicles, as well as interviews and literature review, we have attempted to distill supply chain strategies that can be applied to startup companies. To plan XL Hybrids' supply chain, we developed models for the following aspects of their supply chain: production scheduling, capacity planning, inventory policy, and component distribution. By running different demand and pricing scenarios, we gained an understanding of the impact of these variables on the four aspects of XL Hybrid's supply chain. Based on the scenario analysis and supply chain framework that we developed, we recommend that XL Hybrids be conservative with capacity expansion while strategically sourcing key components after considering volume discounts and different distribution methods.by Marcus S. Causton and Jianmin Wu.M.Eng.in Logistic

Working through frame incongruences : A process perspective on (re)framing for digital servitization

Industrial firms are increasingly seeking new means of competitiveness through digital servitization that involves incorporating digital services and platforms. Despite the growing prominence of digital servitization, we have yet to understand how such changes are being framed, reframed, and unfold in industrial firms. To this end, we undertake an in-depth longitudinal exploratory case study of an industrial firm to understand the organizational framing and reframing activities vis-à-vis digital servitization. Our findings identify how motivational, diagnostic, and prognostic framing gradually unfolds over distinct phases. Specifically, our findings reveal the occurrence of frame incongruence among different groups of actors, compelling the firm to engage in strategies and tactics to achieve frame alignment. Notably, we identify that management engages in the alignment processes of frame extension, translation, and clarification, which creates a space of workable certainty. While transient in nature, this state of workable certainty serves as a catalyst in propelling the firm forward in its pursuit of a digital servitization strategy. By shedding light on the process of digital reframing that firms undertake in order to materialize their digital servitization strategy, our study contributes to a deeper understanding of this phenomenon. Moreover, we raise pertinent managerial implications for firms embarking on the path of digital servitization, emphasizing the imperative of continuous attention to the ongoing framing and reframing processes accompanying such change endeavors.© 2023 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).fi=vertaisarvioitu|en=peerReviewed

Equity research - Siemens Gamesa renewable energy

Mestrado Bolonha em FinançasSiemens Gamesa is a Spanish-German wind engineering firm based in Biscay, Spain. The company operates in three core segments: Onshore, Offshore and Operation & Maintenance (Service), and has a global presence servicing in more than 90 countries. This report slightly differs from a typical Equity Research report, in the sense that no recommendation was provided. While drafting the MFW, an acquisition by Siemens Energy unfolded and SGRE’s shares were delisted from the Madrid Stock Exchange. Having this in mind, I appraised the acquisition as Fairly Valued, since the difference between the acquisition price and my target price was 0.76%. The valuation methodologies used were Discounted Cash Flow Model (using Free Cash Flow to the Firm) and Multiples Valuation (using EV / Sales). An emphasis was placed on the DCF method, and my final target price (€18.19/Sh.) was the result of a comprehensive and detailed forecast analysis (until 2027). SGRE’s main drivers for investment are: i) worldwide lead position in Offshore, ii) highly diversified operations by geography and iii) synergies and cost optimization strategies driven by its full integration of Siemens Energy. Risk-wise, the company and the overall industry should particularly focus on the regulation risk. Concerns regarding noise pollution, wind farm-related accidents, and the fact that the turbines are not recyclable might be a deal-breaker for the foreseeable future when it comes to public subsidies allocation. Technologically speaking, the company also faces the risk that its solutions become obsolete – a normal occurrence in a fast-paced embryonic industry. The biggest question mark on SGRE’s future is on its indebtedness level. When compared to the peers, the company’s level of solvency is concerning, especially considering next years’ investment needs. Deleveraging is not only the key to future success, but it can also be the only chance of survival on such a capital-intensive industry.A Siemens Gamesa é uma empresa hispano-alemã de engenharia eólica com sede na Biscay, em Espanha. A empresa opera em três segmentos principais: Onshore, Offshore e Operação e Manutenção (Serviço), e tem uma presença global, prestando serviços em mais de 90 países. Este relatório difere ligeiramente de um relatório típico de Equity Research, no sentido em que não foi apresentada qualquer recomendação. Durante a elaboração do MFW, Siemens Energy adquiriu por inteiro a Siemens Gamesa e as acções da SGRE foram retiradas da Bolsa de Madrid. Tendo em conta este facto, avaliei a aquisição como Fairly Valued, uma vez que a diferença entre o preço de aquisição e o meu preço-alvo foi de 0,76%. As metodologias de avaliação utilizadas foram o modelo DCF (utilizando o FCFF) e a Avaliação por Múltiplos (utilizando EV / Vendas). A ênfase foi colocada no método DCF, e o meu preço-alvo final (€18,19/Sh.) foi o resultado de uma análise abrangente e pormenorizada das previsões (até 2027). Os principais factores de investimento da SGRE são: i) posição de liderança mundial no sector Offshore, ii) operações muito geograficamente diversificadas e iii) sinergias e estratégias de otimização de custos impulsionadas pela integração total da Siemens Energy. Em termos de risco, a empresa e o sector em geral devem centrar-se especialmente no risco regulatório. As preocupações com a poluição sonora, os acidentes relacionados com os parques eólicos e o facto de as turbinas não serem recicláveis podem ser um obstáculo num futuro próximo no que respeita à atribuição de subsídios públicos. Do ponto de vista tecnológico, a empresa corre também o risco de as suas soluções se tornarem obsoletas, o que é normal numa indústria embrionária e de ritmo acelerado. O maior ponto de interrogação sobre o futuro da SGRE reside no seu nível de endividamento. Quando comparado com os seus pares, o nível de solvência da empresa é preocupante, especialmente tendo em conta as necessidades de investimento para os próximos anos. A desalavancagem não é apenas a chave para o sucesso futuro, mas pode também ser a única hipótese de sobrevivência num sector com tão capital-intensivo.info:eu-repo/semantics/publishedVersio

Creating sustainable value through remanufacturing: Three industry cases

© 2019 Elsevier Ltd Remanufacturing is proposed as a strategy to develop circular business models to manage resource loops in the future circular economy (CE). If remanufacturing is to occupy a central role in the CE it needs to be considered from a series of complementary and synchronous business activities. Thus, the aim of this article is to investigate how such an integrated perspective can drive sustainable value creation within the context of remanufacturing business models. This is explored through three business cases: Philips Healthcare Refurbished Systems, Siemens Wind Power, and Orangebox. This ‘integrated view’ considers remanufacturing activities according to: product design and development; remanufacturing processes; value chain design and management; and marketing and consumer/user relationship. The research question asks, ‘Can an integrated perspective drive sustainable value creation in remanufacturing contexts?’ To answer this, the research maps a set of triple-bottom-line indicators across the chosen cases. The work contributes to the field by mapping a set of business mechanisms (e.g. warranties, service approaches, partnerships) that can be utilised to co-develop necessary activities in unison for a successful remanufacturing approach. In certain cases, remanufacturing has the potential to add to the triple-bottom-line through such an integrated approach. However, each of the firms are investing in remanufacturing predominantly for profitability and market protection measures and therefore environmental and social components of the triple-bottom-line must be proactively considered

How to respond to low cost competition – A case study

Background Today many large corporations worldwide are facing new competitors that develop good enough products to a low price. This is a well-known problem for large companies and is not an industry specific problem. We have seen new entrants especially from Asia entering, ranging from the airline industry, grocery, retailing, wind energy market, banking to IT services. These are just examples and no industry is presumably immune to this issue. How have successful companies tackled these kinds of threats? Managers at traditional premium corporations are having a hard time to decide what strategy to use while responding to these growing competitors and the change in the business landscape. The company in this thesis, Tetra Pak, is threatened by low cost competitors due to some of its patents have expired. The largest low cost competitor is named Greatview Aseptic Packaging Ltd and is based in China. Greatview is a Non-System Supplier (NSS) and obtains its revenues through using a more focused business model concentrating on a limited product offering. Thesis Objective This thesis consists of two main objectives. The first one is to describe how companies in the B2B manufacturing industry have responded to direct low cost competition and to identify what factors in the market or within the company that has been significant, decisive and descriptive for the choice and outcome of the Companys strategy. These factors will be identified and presented in a normative schematic model. The second objective is to test the hypothesis if the criteria for not being stuck in the middle stated by Michael Porter are true for the case companies utilizing a dual strategy. In addition, the companies actions will be compared with Kumars framework. Research questions What strategy could a company use against low cost competition? Which factors caused the case companies to take action? Limitations This reports focus has been manufacturing companies within the global B2B industry. The report examines six different firms in the mature market, all except one in the B2B industry. The firm that was not a B2B company was requested from Tetra Pak. The numbers of case objects (six) chosen were depending on a time constraint. Furthermore, this thesis puts focus on direct competition in the aseptic packaging industry only. Greatview Aseptic is the leading NSS and therefore that company has been studied thoroughly in this report. Methodology This thesis is based on a comparative descriptive multiple case study. An abductive approach is used. The data consists of both qualitative and quantitative data such as literary books, dissertations, newspapers, databases, annual reports, websites and trade organizations. Conclusions The schematic normative model developed in this thesis is deemed to support management when responding towards low cost competition. Analysis of the empirical findings provided this report with identified factors, which will assist managers to strategize toward low cost competition. Management could then use the model when looking over the competitive environment on a particular market based on how the outside world changes and what internal capabilities the company possess. This can provide an important basis when planning to enter a new market and advise how to develop a strategy against low cost competition. The idea is to bring in new thoughts and assist management with a competition analysis and emphasize a new perspective to rethink and think new in order to improve old thinking patterns. What is interesting to note is that none of the case companies transformed itself to a low cost player. The criteria for not being stuck in the middle stated by Michael Porter are true for the case companies utilizing a dual strategy. Furthermore, the findings about the companies reactions to the low-cost players support Nirmalya Kumars theoretical framework

After-Sales Service Contracting for Excellence in Life-Cycle Cost Management: Numerical Experiments and Systematic Review of Analytical Models

This research adds to the literature and provides insight to practice via three essays that increase understanding about the applications and consequences of the two new approaches to the after-sales service governance: warranty contract and performance-based contracts. First, we attempted to enhance our knowledge of the modeling of the after-sales service process. In the first essay, the research papers with analytical models of after-sales services to present current trends, issues, and future research directions in the literature are classified. In the second essay, the effect of the warranty contract on the supplier's product quality improvement efforts in the context of capital goods is examined. Three sets of optimization models reveal that the existence of a warranty improves product quality. In the third essay, the performance-based contract is examined in the context of the warranty contract. The numerical experimentations conducted demonstrate that the performance-based contract is superior to the warranty contract in terms of the supplier's product quality efforts and the customer's total cost of after-sales services. The alignment of incentives based on the product performance tackles the issues presented in the traditional after-sales service contracting. Collectively, the three studies presented in this research expand our understanding of after-sales service contracts. Thus, the research presents managerial implications and adds to the existing body of knowledge in after-sales service research

A Comparison of Emissions-Reduction Strategies to Improve Livability in Freight-Centric Communities

In 2009, the U.S. Department of Transportation, the U.S. Environmental Protection Agency, and the U.S. Department of Housing and Urban Development entered into an interagency “Partnership for Sustainable Communities” to cooperatively increase transportation mode choices while reducing transportation costs, protecting the environment, and providing greater access to affordable housing through the incorporation of six principals of livability (U.S. Department of Transportation, 2014a). This study focuses on strategies to reduce vehicle emissions and improve livability along the Lamar Corridor in Memphis, Tennessee, a location that was designated by the U.S. Government in 2010 as an area to be targeted for livability improvements (Daniels & Meeks, 2010). The results of this study indicate that a common method to reduce emissions at freight terminals, a typical facility along the Lamar Corridor, may actually increase emissions along the corridor itself. Additionally, specific emphasis on the use of alternative fuels as a method to reduce emissions may be warranted