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Atlas Pearls Limited
Consumer Cyclical · Luxury Goods
Updated 12 hours ago
$0.09
MARKET CAP
$39.51M
P/E RATIO
1.8
DIV. YIELD
5.6%
FRANKING
83%
Atlas Pearls Limited, together with its subsidiaries, produces and sells South Sea pearls in Australia and Indonesia. The company offers silver and white sea South Sea pearl products; and jewelry products, including sterling silver, gold, and precious materials, as well as custom made pieces.
View full descriptionThe Warsi Rating combines two proven approaches: value investing principles and dividend strategy. A stock must score 70+ on both to be rated Solid or higher.
10-year ROE trends, dividend history, price ceiling calculations, and every red flag explained.
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Excellent. Very low debt (0.01) means strong financial flexibility and minimal bankruptcy risk.
Current Snapshot
Current D/E
0.01x
Industry Limit
1.50x
Headroom
+1.49x
Why It Matters
Debt-to-equity shows balance-sheet risk. Lower leverage usually means more flexibility when earnings soften.
Formula
Total Debt / Shareholders' EquityMethod
Compare current D/E against the industry threshold used in the scoring framework, then assess remaining headroom.
Worked Example
This company's D/E is 0.01, meaning it carries 1 cents of debt for every $1 of equity. The consumer cyclical & retail limit is 1.50, leaving 1.49 of headroom.
How to Interpret
Lower values generally imply lower refinancing pressure and lower dividend stress in downturns.
Very low debt means this company has maximum flexibility. They won't need to cut dividends to service loans during downturns - your income stream is protected by a fortress balance sheet.
Sources
Profit after production costs, before overhead
Exceptional 78.9% margins indicate strong pricing power and brand value.
Current Snapshot
10Y Avg
78.9%
Threshold
40%
Worst Year
57.1%
Why It Matters
Gross margin indicates how much room a business has to absorb costs and still generate profit.
Formula
(Revenue - Cost of Goods Sold) / Revenue x 100Method
Assess both the long-term average and the weakest year. The framework checks for both level and consistency.
Worked Example
This company's 10-year average gross margin is 78.9% — it keeps 79 cents of every revenue dollar after production costs. The threshold is 40%, and the weakest year was 57.1%.
How to Interpret
Sustained high margins usually support durability. Sharp margin swings can signal weaker control or cyclical pressure.
Exceptional margins mean the company has strong pricing power - customers pay premium prices even when cheaper alternatives exist. This buffer protects profits (and dividends) even if costs rise.
Sources
Short-term assets vs. short-term debts
Strong liquidity. 6.66 ratio means ample cash to cover short-term obligations.
Current Snapshot
Current Ratio
6.66x
Warning Floor
1.00x
Target
1.50x
Why It Matters
Liquidity supports operational stability. Companies with weak liquidity can face pressure even when long-term fundamentals are sound.
Formula
Current Assets / Current LiabilitiesMethod
Compare the current ratio to the warning floor and target level used in the framework.
Worked Example
This company's current ratio is 6.66x — it has $6.66 in short-term assets for every $1 of short-term liabilities. The target is 1.5x, with a warning floor at 1.0x.
How to Interpret
Ratios above the target suggest healthier short-term resilience; ratios below 1.0x can indicate immediate funding risk.
Strong liquidity means the company can keep paying dividends even during temporary revenue drops. There's ample cash cushion to weather storms.
Sources
Real cash left after running the business
Positive cash generation. Company produces real cash after capital expenditures - can fund dividends, buybacks, or growth.
Current Snapshot
Current FCF
$12M
Pass Rule
> $0
Status
Positive
Why It Matters
Free cash flow is the cash available after core operating and capital needs. It is central to dividend capacity.
Formula
Operating Cash Flow - Capital ExpendituresMethod
Review whether free cash flow is consistently positive and whether it is sufficient relative to dividends and debt needs.
Worked Example
This company generated $12M in free cash flow — cash left after operating costs and capital expenditure. Positive FCF means dividends are funded by real cash generation.
How to Interpret
Persistently negative free cash flow can force reliance on borrowing or equity issuance to maintain payouts.
Positive cash flow means dividends are funded by actual money, not accounting profits. As Buffett says, "Cash is fact, profit is opinion." Your income is backed by real cash generation.
Sources
Profit generated per $1 of shareholder investment
-1.8% average is below the 15% threshold. This suggests the business may lack a durable competitive advantage.
Current Snapshot
10Y Avg
-1.8%
Threshold
15.0%
Worst Year
-165.4%
Why It Matters
ROE shows how effectively management turns shareholder capital into profit. High and stable ROE can signal pricing power, cost discipline, or both.
Formula
Net Income / Shareholders' Equity x 100Method
Use the 10-year average ROE and review the weakest year to check whether returns stayed resilient across cycles.
Worked Example
This company's 10-year average ROE is -1.8%, meaning each $1 of shareholder equity generates $-0.02 in annual profit. The threshold is 15%, and the worst single year was -165.4%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
Lower ROE means your investment compounds more slowly. At -1.8%, this business needs more capital to generate the same returns as competitors. Consider whether other strengths (yield, stability) compensate for weaker profitability.
Sources
Price versus estimated intrinsic value and required return thresholds.
What percentage of the stock price comes back as earnings each year
Strong value. 55.1% earnings yield exceeds the threshold, and multiple valuation checks confirm it's attractively priced.
Current Snapshot
Current Yield
55.1%
Required Yield
7.5%
Spread
+47.6pp
Why It Matters
Earnings yield reframes valuation as return on price paid. It helps compare equity earnings power against lower-risk alternatives.
Formula
(Earnings per Share / Stock Price) x 100Method
Calculate current earnings yield, then compare it to the required yield for the stock's industry setting.
Worked Example
With EPS of $0.05 and a share price of $0.09, earnings yield is 55.1%. The required yield for this industry is 7.5% (based on 4.5% government bond rate plus a risk premium).
How to Interpret
A yield above the required level suggests better valuation support; below it indicates thinner compensation for equity risk.
Multiple ways of measuring value agree: you're getting a fair deal. The stock offers solid returns compared to what you'd earn from safe bonds.
Sources
How current price compares with estimated intrinsic value
How efficiently the company turns money into profit
Exceptional 39.8% ROIC indicates a strong competitive advantage and efficient use of capital.
Current Snapshot
5Y Avg
39.8%
Threshold
11.0%
WACC Delta
+30.8pp
Why It Matters
ROIC measures capital efficiency. Businesses that repeatedly earn above their funding cost can compound value more effectively.
Formula
After-Tax Operating Profit / Invested Capital x 100Method
Use the 5-year average ROIC and compare it with industry WACC plus the required spread in this framework.
Worked Example
This company's 5-year average ROIC is 39.8%, with a cost of capital (WACC) of 9.0%. The +30.8pp spread above WACC suggests it creates value on each dollar invested.
How to Interpret
A healthy spread above WACC suggests value creation; a narrow or negative spread points to weaker capital efficiency.
Exceptional returns on capital mean every dollar reinvested creates significant value. This is the engine that can power both capital appreciation and growing dividends.
Sources
How much earnings are consumed by capital expenditure
Percentage of revenue that becomes profit after all expenses
Consistency of profits over time
Is the business growing — and is debt being managed responsibly?
Revenue growing while debt is declining — dividends are likely funded by business performance, not borrowing. This is the strongest signal of dividend sustainability.
Current Snapshot
Revenue Change
+145.4%
Debt Change
-90.5%
Trend State
Improving
Why It Matters
Revenue trend shows whether the business is expanding or contracting. Debt trend adds context on whether growth is being funded conservatively.
Formula
Revenue Change (%) = (Latest Revenue - Earliest Revenue) / |Earliest Revenue| x 100; Debt Change (%) = (Latest Debt - Earliest Debt) / |Earliest Debt| x 100Method
Map annual revenue history and, where relevant, annual debt history. For financial companies, debt is excluded because deposits and reserves distort this signal.
Worked Example
Revenue changed by +145.4% across the displayed period, while debt changed by -90.5%.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Revenue growing while debt is declining — dividends are likely funded by business performance, not borrowing. This is the strongest signal of dividend sustainability.
Sources
Insufficient dividend history. Barsi methodology requires 6 years of data to calculate average yield.
Current Snapshot
6Y Avg Yield
N/A
6% Requirement
6.0%
Gross Yield
N/A
Why It Matters
Yield translates dividend income into a percentage of the price paid, which is central to income-first screening.
Formula
Annual Dividends per Share / Stock Price x 100Method
Use the 6-year average annual dividend for consistency and compare the result with the 6% framework requirement.
Worked Example
If annual dividends are $0.60 and the share price is $10, dividend yield is 6.0%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
Without 6 years of dividend history, we can't assess whether the yield is sustainable or a one-time spike. More data is needed to evaluate income potential.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 31 Aug 2026Final | 25 Sept 2026 | $0.01 | 100% | $0.00 | $0.00 |
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 4 Sept 2025Final | 26 Sept 2025 | $0.02 | 100% | $0.01 | $0.01 |
| 6 Mar 2025Interim | 10 Apr 2025 | $0.01 | 0% | $0.01 | $0.00 |
| 12 Sept 2024Final | 17 Oct 2024 | $0.01 | 100% | $0.01 | $0.00 |
| 7 Mar 2024Interim | 11 Apr 2024 | $0.02 | 100% | $0.01 | $0.01 |
| 4 Sept 2023Final | 9 Oct 2023 | $0.01 | 100% | $0.00 | $0.00 |
Only 4 years of dividend history available. Barsi methodology requires 6+ years to evaluate consistency.
Current Snapshot
History
4yr
Predictability
N/A
Payout Health
Sustainable
Why It Matters
Payment consistency is a direct test of dividend reliability. Large cuts or skips often appear before confidence recovers.
Formula
Consecutive Years = count of years with dividend payments and no disqualifying skip/cut eventsMethod
Require at least 6 years of history, then check for skipped years and large cuts, allowing approved systemic-event exceptions.
Worked Example
This company has 4 years of dividend history (2023–2026). No suspensions detected — 4 consecutive years of payments. Predictability: N/A. Payout health: Sustainable. The minimum requirement is 6 years.
How to Interpret
Longer uninterrupted records generally signal stronger income reliability than high yield alone.
Without 6 years of history, we can't verify this company maintained dividends through economic cycles. Longer track records provide confidence your income will continue.
Sources
Industry category of the business
Consumer Cyclical is not a BESST sector. Non-BESST stocks receive a lower base score but can still qualify with exceptional dividend metrics.
Current Snapshot
Industry
Luxury Goods
BESST Match
No
Score Impact
No bonus
Why It Matters
Sector classification helps contextualise risk and demand durability, which can materially affect dividend stability.
Formula
BESST Match = Sector in {Banks, Energy, Sanitation, Insurance, Telecom}Method
Match company sector or industry against BESST categories. A match adds scoring support but does not replace core dividend checks.
Worked Example
This company operates in Luxury Goods (Consumer Cyclical sector). It does not match a BESST sector, so it receives the standard base score. Non-BESST stocks can still qualify with strong dividend metrics.
How to Interpret
BESST alignment is a positive context signal. Non-BESST stocks can still qualify with strong yield and dividend consistency.
Non-essential businesses face demand drops during recessions — discretionary spending is first to be cut. This increases cyclical risk for dividends, but companies with decades of consistent payments can still demonstrate durability.
Sources
How much of a company's earnings are paid out as dividends
The company is paying out more in dividends than it earns (228%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Current Snapshot
Latest Ratio
228.4%
Healthy Range
30%-75%
Zone
Unsustainable
Why It Matters
Payout ratio links dividends to earnings capacity and helps evaluate whether current distributions are likely to remain supportable.
Formula
Payout Ratio (%) = (Annual Dividend per Share / Earnings per Share) x 100Method
Calculate year-by-year payout ratios where EPS is positive, classify each year by sustainability zone, and compare with the current TTM ratio.
Worked Example
$0.02 dividend / $0.05 EPS equals 48.4% payout ratio.
How to Interpret
Ratios in the middle range are usually more sustainable than very high ratios. Values above 100% indicate dividends exceeded earnings in that period.
The company is paying out more in dividends than it earns (228%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Sources
Exceptional discount: 92% BELOW the fair-value threshold (includes 30% margin of safety).
Current Snapshot
Current Margin
94.2%
Industry Threshold
30%
Status
92% Undervalued
Why It Matters
Margin of safety provides a valuation buffer against modelling uncertainty and adverse business outcomes.
Formula
(Estimated Intrinsic Value per Share - Current Price) / Estimated Intrinsic Value per Share x 100Method
Estimate intrinsic value using a two-stage DCF (10-year projection plus terminal value), then compare with current price.
Worked Example
For this stock now: intrinsic value is $1.56 per share, current price is $0.09, and margin of safety is 94.2%.
How to Interpret
Positive margin indicates price below modelled value; negative margin indicates price above modelled value. Compare against the industry's required buffer.
The market price sits far below your required entry threshold, providing a substantial valuation buffer if assumptions prove optimistic.
Sources
Exceptionally capital-light. Only 15% of earnings consumed by CapEx — this is the type of business Buffett loves.
Current Snapshot
10Y CapEx Intensity
15%
Threshold
50%
Buffer
+36%
Why It Matters
CapEx intensity estimates how much of earnings must be reinvested just to sustain operations.
Formula
Cumulative CapEx (10yr) / Cumulative Net Income (10yr) x 100Method
Aggregate 10-year CapEx and net income, then compare the ratio with the sector threshold in the framework.
Worked Example
Over 10 years, 15% of this company's cumulative earnings were consumed by capital expenditure. The consumer cyclical & retail threshold is 50%, leaving a buffer of +36%.
How to Interpret
Lower ratios usually indicate better cash conversion. Higher ratios can reduce room for dividends and buybacks.
Very low capital requirements mean most profits are available for dividends, buybacks, or growth. This business generates wealth without needing to pour money back in — the hallmark of a durable competitive advantage.
Sources
Exceptional 49.5% net margin signals a strong and durable competitive advantage.
Current Snapshot
Current Margin
49.5%
Threshold
5.0%
Relative Position
+44.5%
Why It Matters
Net income margin shows how much profit the business keeps from each dollar of revenue after all costs.
Formula
Net Income / Total Revenue x 100Method
Compare current margin with the industry-specific threshold to avoid cross-sector distortions.
Worked Example
This company's net income margin is 49.5% — it keeps 49 cents of every revenue dollar as profit after all expenses. The consumer cyclical & retail threshold is 5%, putting it 44.5% above the requirement.
How to Interpret
Margins that are both strong and stable can indicate competitive strength; persistent weakness may limit reinvestment and payout capacity.
Outstanding profitability means this company converts a large share of every dollar earned into profit. This buffer protects dividends even if revenue dips — the hallmark of a moat.
Sources
2 loss years detected (max 1 allowed). Unpredictable earnings make valuation difficult.
Current Snapshot
Positive Years
7/10
Allowed Losses
1
EPS CAGR
66.8%
Why It Matters
Consistency in EPS helps distinguish resilient earnings power from one-off performance spikes.
Formula
Positive EPS Years / Available EPS YearsMethod
For 8+ years of data, apply industry-specific loss tolerance. For limited data, every available year must be positive.
Worked Example
This company reported positive earnings in 7 of the last 10 years, with 2 loss years. The allowed loss tolerance for this industry is 1 year. EPS growth rate (CAGR) is 66.8%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
Volatile earnings create dividend uncertainty. When profits disappear, dividends often follow. Forecasting your future income becomes difficult.
Sources