Cooper Companies Inc Valuation – March 2019 #COO

Company Profile (excerpt from Reuters): The Cooper Companies, Inc., incorporated on March 4, 1980, is a global medical device company. The Company operates through two business units: CooperVision, Inc. (CooperVision ) and CooperSurgical, Inc. (CooperSurgical). CooperVision offers soft contact lenses for the vision correction market. CooperSurgical primarily develops, manufactures, markets medical devices and procedures solutions, and provides services to improve health care delivery to families.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of COO – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $14,341,367,792 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.03 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 96.04% Pass
6. Moderate PEmg Ratio PEmg < 20 40.99 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.39 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.03 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.58 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.09
MG Growth Estimate 6.46%
MG Value $151.90
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $102.82
MG Value based on 0% Growth $60.28
Market Implied Growth Rate 16.24%
Current Price $290.67
% of Intrinsic Value 191.36%

Cooper Companies Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.96 in 2015 to an estimated $7.09 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 16.24% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Cooper Companies Inc revealed the company was trading above its Graham Number of $131.68. The company pays a dividend of $0.06 per share, for a yield of 0% Its PEmg (price over earnings per share – ModernGraham) was 40.99, which was below the industry average of 53.13, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-34.28.

Cooper Companies Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$34.28
Graham Number $131.68
PEmg 40.99
Current Ratio 2.03
PB Ratio 4.39
Current Dividend $0.06
Dividend Yield 0.02%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 10/1/2018
Total Current Assets $1,090,900,000
Total Current Liabilities $536,500,000
Long-Term Debt $1,985,700,000
Total Assets $6,112,800,000
Intangible Assets $3,913,400,000
Total Liabilities $2,805,000,000
Shares Outstanding (Diluted Average) 50,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $11.45
Oct2018 $2.81
Oct2017 $7.52
Oct2016 $5.59
Oct2015 $4.14
Oct2014 $5.51
Oct2013 $5.96
Oct2012 $5.05
Oct2011 $3.63
Oct2010 $2.43
Oct2009 $2.21
Oct2008 $1.43
Oct2007 -$0.25
Oct2006 $1.44
Oct2005 $2.04
Oct2004 $2.59
Oct2003 $2.09
Oct2002 $1.57
Oct2001 $1.22
Oct2000 $1.00
Oct1999 $0.88

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.09
Oct2018 $4.98
Oct2017 $5.96
Oct2016 $5.20
Oct2015 $4.96
Oct2014 $5.08
Oct2013 $4.53
Oct2012 $3.53
Oct2011 $2.47
Oct2010 $1.75
Oct2009 $1.40
Oct2008 $1.14
Oct2007 $1.19
Oct2006 $1.93
Oct2005 $2.08
Oct2004 $1.96
Oct2003 $1.55

Recommended Reading:

Other ModernGraham posts about the company

Cooper Companies Inc Valuation – May 2018 $COO
Cooper Companies Inc Valuation – Initial Coverage $COO

Other ModernGraham posts about related companies

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Boston Scientific Corporation Valuation – March 2019 $BSX
Baxter International Inc Valuation – March 2019 $BAX
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Abbott Laboratories Valuation – February 2019 $ABT
Becton Dickinson and Co Valuation – February 2019 $BDX
IQVIA Holdings Inc Valuation – February 2019 $IQV
Thermo Fisher Scientific Inc Valuation – February 2019 $TMO
Illumina Inc Valuation – February 2019 $ILMN
Waters Corp Valuation – February 2019 $WAT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Molson Coors Brewing Co Valuation – January 2019 $TAP

Company Profile (excerpt from Reuters): Molson Coors Brewing Company (MCBC), incorporated on August 14, 2003, is a holding company. The Company operates as a brewer. The Company’s segments include MillerCoors LLC (United States segment), operating in the United States; Molson Coors Canada (Canada segment), operating in Canada; Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Republic of Ireland, Romania, Serbia, the United Kingdom and various other European countries; Molson Coors International (Molson Coors International segment), operating in various other countries, and Corporate. The Company offers a portfolio of owned and partner brands, including Carling, Coors Light, Miller Lite, Molson Canadian and Staropramen, as well as craft and specialty beers, such as the Blue Moon Brewing Company brands, the Jacob Leinenkugel Brewing Company brands, Creemore Springs, Cobra and Doom Bar.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TAP – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $13,697,224,360 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.64 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 89.01% Pass
6. Moderate PEmg Ratio PEmg < 20 10.75 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.97 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.64 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -5.57 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.89
MG Growth Estimate 14.81%
MG Value $224.60
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $85.44
MG Value based on 0% Growth $50.09
Market Implied Growth Rate 1.12%
Current Price $63.34
% of Intrinsic Value 28.20%

Molson Coors Brewing Co Class B qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.97 in 2014 to an estimated $5.89 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.12% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Molson Coors Brewing Co Class B revealed the company was trading below its Graham Number of $86.77. The company pays a dividend of $1.64 per share, for a yield of 2.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 10.75, which was below the industry average of 19.84, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-62.64.

Molson Coors Brewing Co Class B fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$62.64
Graham Number $86.77
PEmg 10.75
Current Ratio 0.64
PB Ratio 0.97
Current Dividend $1.64
Dividend Yield 2.59%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $2,812,300,000
Total Current Liabilities $4,422,600,000
Long-Term Debt $8,970,300,000
Total Assets $30,470,300,000
Intangible Assets $22,329,400,000
Total Liabilities $16,380,300,000
Shares Outstanding (Diluted Average) 216,600,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.45
Dec2017 $6.53
Dec2016 $9.34
Dec2015 $2.12
Dec2014 $2.76
Dec2013 $3.08
Dec2012 $2.44
Dec2011 $3.63
Dec2010 $3.78
Dec2009 $3.87
Dec2008 $2.04
Dec2007 $2.71
Dec2006 $2.08
Dec2005 $0.84
Dec2004 $2.60
Dec2003 $2.39
Dec2002 $2.21
Dec2001 $1.66
Dec2000 $1.47
Dec1999 $1.23
Dec1998 $0.91

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.89
Dec2017 $5.66
Dec2016 $4.80
Dec2015 $2.63
Dec2014 $2.97
Dec2013 $3.17
Dec2012 $3.19
Dec2011 $3.44
Dec2010 $3.20
Dec2009 $2.71
Dec2008 $2.10
Dec2007 $2.13
Dec2006 $1.90
Dec2005 $1.85
Dec2004 $2.26
Dec2003 $1.99
Dec2002 $1.70

Recommended Reading:

Other ModernGraham posts about the company

10 Low PE Stock Picks for the Defensive Investor – June 2018
10 Undervalued Companies for the Defensive Investor – June 2018
10 Stocks for Using A Benjamin Graham Value Investing Strategy – May 2018
10 Low PE Stock Picks for the Defensive Investor – March 2018
5 Great Stocks This Week – 3/19/18

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Molson Coors Brewing Co Valuation – March 2018 $TAP
Molson Coors Brewing Co Valuation – Initial Coverage $TAP
Constellation Brands Inc Valuation – February 2017 $STZ
Brown-Forman Corporation – February 2017 $BF.B
Boston Beer Company Inc Valuation – Initial Coverage $SAM

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cooper-Standard Holdings Inc Valuation – August 2018 $CPS

Company Profile (excerpt from Reuters): Cooper-Standard Holdings Inc., incorporated on September 10, 2004, is a holding company. The Company designs, manufactures and sells sealing, fuel and brake delivery, fluid transfer and anti-vibration systems for use in passenger vehicles and light trucks manufactured by global original equipment manufacturers (OEMs). The Company operates through four segments: North America, Europe, Asia Pacific and South America. The Company’s products are used in passenger vehicles and light trucks. As of December 31, 2016, the Company’s operations were conducted through 123 leased and joint venture facilities in 20 countries (North America: Canada, Mexico and the United States; Asia Pacific: China, India, Japan, South Korea and Thailand; Europe: Czech Republic, France, Germany, Italy, the Netherlands, Poland, Romania, Serbia, Spain, Sweden and the United Kingdom, and South America: Brazil), of which 90 are manufacturing facilities and 33 have design, engineering, administrative or logistics designations.
CPS Chart

CPS data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CPS – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,340,159,355 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.78 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 545.80% Pass
6. Moderate PEmg Ratio PEmg < 20 17.15 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.82 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.78 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.19 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.96
MG Growth Estimate 15.00%
MG Value $306.46
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $115.42
MG Value based on 0% Growth $67.66
Market Implied Growth Rate 4.33%
Current Price $136.54
% of Intrinsic Value 44.55%

Cooper-Standard Holdings Common Stock does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.75 in 2014 to an estimated $7.96 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 4.33% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Cooper-Standard Holdings Common Stock revealed the company was trading above its Graham Number of $105.65. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 17.15, which was below the industry average of 18.51, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-23.06.

ChoicePoint Inc. Common Stock receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$23.06
Graham Number $105.65
PEmg 17.15
Current Ratio 1.78
PB Ratio 2.82
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $1,388,544,000
Total Current Liabilities $781,261,000
Long-Term Debt $723,002,000
Total Assets $2,700,283,000
Intangible Assets $231,915,000
Total Liabilities $1,812,164,000
Shares Outstanding (Diluted Average) 18,372,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $10.75
Dec2017 $7.21
Dec2016 $7.42
Dec2015 $6.08
Dec2014 $2.39
Dec2013 $2.24
Dec2012 $4.14
Dec2011 $3.93

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.96
Dec2017 $6.07
Dec2016 $5.15
Dec2015 $3.93
Dec2014 $2.75
Dec2013 $2.64
Dec2012 $2.43
Dec2011 $1.31

Recommended Reading:

Other ModernGraham posts about the company

Cooper-Standard Holdings Inc Valuation – Initial Coverage $CPS

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General Motors Co Valuation – April 2018 $GM
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cooper Companies Inc Valuation – May 2018 $COO

Company Profile (excerpt from Reuters): The Cooper Companies, Inc., incorporated on March 4, 1980, is a global medical device company. The Company operates through two business units: CooperVision, Inc. and CooperSurgical, Inc. CooperVision offers soft contact lenses for the vision correction market. CooperSurgical offers an array of products and services focused on advancing the health of families through a portfolio of products and services focusing on women’s health, fertility and diagnostics.

COO Chart

COO data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of COO – May 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,402,364,284 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.83 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 200.48% Pass
6. Moderate PEmg Ratio PEmg < 20 29.60 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.65 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.83 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.12 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.96
MG Growth Estimate 8.48%
MG Value $202.61
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $115.36
MG Value based on 0% Growth $67.63
Market Implied Growth Rate 10.55%
Current Price $235.51
% of Intrinsic Value 116.24%

Cooper Companies Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $5.08 in 2014 to an estimated $7.96 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 10.55% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Cooper Companies Inc revealed the company was trading above its Graham Number of $131.11. The company pays a dividend of $0.06 per share, for a yield of 0% Its PEmg (price over earnings per share – ModernGraham) was 29.6, which was below the industry average of 42.49, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-39.61.

Cooper Companies Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$39.61
Graham Number $131.11
PEmg 29.60
Current Ratio 2.83
PB Ratio 3.65
Current Dividend $0.06
Dividend Yield 0.03%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 1/1/2018
Total Current Assets $1,175,500,000
Total Current Liabilities $415,700,000
Long-Term Debt $2,372,900,000
Total Assets $6,268,600,000
Intangible Assets $4,042,200,000
Total Liabilities $3,112,300,000
Shares Outstanding (Diluted Average) 48,900,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $11.74
Oct2017 $7.52
Oct2016 $5.59
Oct2015 $4.14
Oct2014 $5.51
Oct2013 $5.96
Oct2012 $5.05
Oct2011 $3.63
Oct2010 $2.43
Oct2009 $2.21
Oct2008 $1.43
Oct2007 -$0.25
Oct2006 $1.44
Oct2005 $2.04
Oct2004 $2.59
Oct2003 $2.09
Oct2002 $1.57
Oct2001 $1.22
Oct2000 $1.00
Oct1999 $0.88
Oct1998 $1.31

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.96
Oct2017 $5.96
Oct2016 $5.20
Oct2015 $4.96
Oct2014 $5.08
Oct2013 $4.53
Oct2012 $3.53
Oct2011 $2.47
Oct2010 $1.75
Oct2009 $1.40
Oct2008 $1.14
Oct2007 $1.19
Oct2006 $1.93
Oct2005 $2.08
Oct2004 $1.96
Oct2003 $1.55
Oct2002 $1.25

Recommended Reading:

Other ModernGraham posts about the company

Cooper Companies Inc Valuation – Initial Coverage $COO

Other ModernGraham posts about related companies

Edwards Lifesciences Corp Valuation – May 2018 $EW
Baxter International Inc Valuation – May 2018 $BAX
Boston Scientific Corp Valuation – May 2018 $BSX
Centene Corp Valuation – May 2018 $CNC
Abbott Laboratories Valuation – May 2018 $ABT
Becton Dickinson and Co Valuation – May 2018 $BDX
IQVIA Holdings Inc Valuation – Initial Coverage May 2018 $IQV
Thermo Fisher Scientific Inc Valuation – April 2018 $TMO
Illumina Inc Valuation – April 2018 $ILMN
Waters Corp Valuation – April 2018 $WAT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Molson Coors Brewing Co Valuation – March 2018 $TAP

Company Profile (obtained from Marketwatch): Molson Coors Brewing Co. produces and sells beer. It brews, markets and sells a portfolio of brands such as Coors Light, Molson Canadian, Carling, Blue Moon and Keystone Light across the Americas, Europe and Asia. It operates through the following segments: the United States, Canada, Europe, and Molson Coors International (MCI). It operates in Canada through Molson Coors Canada, in the United States through MillerCoors LLC, in Europe through Molson Coors Europe and Molson Coors International operating in various other countries. It also markets and sells its brands, which include Coors, Coors 1873, Coors Extra, Coors Gold, Iceberg 9000, King Cobra, Royal Brew, and Zima. in various international markets. The company was founded in 1873 and is headquartered in Denver, CO.

TAP Chart

TAP data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TAP – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $17,523,092,388 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.64 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 85.46% Pass
6. Moderate PEmg Ratio PEmg < 20 14.06 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.33 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.64 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -8.76 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.76
MG Growth Estimate 14.13%
MG Value $211.75
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $83.51
MG Value based on 0% Growth $48.95
Market Implied Growth Rate 2.78%
Current Price $80.96
% of Intrinsic Value 38.23%

Molson Coors Brewing Co qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.97 in 2014 to an estimated $5.76 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.78% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Molson Coors Brewing Co revealed the company was trading below its Graham Number of $83.53. The company pays a dividend of $1.64 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 14.06, which was below the industry average of 25.91, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-68.5.

Molson Coors Brewing Co fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$68.50
Graham Number $83.53
PEmg 14.06
Current Ratio 0.64
PB Ratio 1.33
Current Dividend $1.64
Dividend Yield 2.03%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $2,189,700,000
Total Current Liabilities $3,399,300,000
Long-Term Debt $10,598,700,000
Total Assets $30,246,900,000
Intangible Assets $22,702,000,000
Total Liabilities $17,020,800,000
Shares Outstanding (Diluted Average) 216,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.05
Dec2017 $6.53
Dec2016 $9.34
Dec2015 $2.12
Dec2014 $2.76
Dec2013 $3.08
Dec2012 $2.44
Dec2011 $3.63
Dec2010 $3.78
Dec2009 $3.87
Dec2008 $2.04
Dec2007 $2.71
Dec2006 $2.08
Dec2005 $0.84
Dec2004 $2.60
Dec2003 $2.39
Dec2002 $2.21
Dec2001 $1.66
Dec2000 $1.47
Dec1999 $1.23
Dec1998 $0.91

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.76
Dec2017 $5.66
Dec2016 $4.80
Dec2015 $2.63
Dec2014 $2.97
Dec2013 $3.17
Dec2012 $3.19
Dec2011 $3.44
Dec2010 $3.20
Dec2009 $2.71
Dec2008 $2.10
Dec2007 $2.13
Dec2006 $1.90
Dec2005 $1.85
Dec2004 $2.26
Dec2003 $1.99
Dec2002 $1.70

Recommended Reading:

Other ModernGraham posts about the company

5 Best Stocks for Value Investors This Week – 2/25/17
Molson Coors Brewing Co Valuation – Initial Coverage $TAP
5 Speculative and Overvalued Companies to Avoid – November 2015
Molson Coors Brewing Co. Valuation – November 2015 Update $TAP
30 Companies in the Spotlight This Week – 11/15/14

Other ModernGraham posts about related companies

Molson Coors Brewing Co Valuation – Initial Coverage $TAP
Constellation Brands Inc Valuation – February 2017 $STZ
Brown-Forman Corporation – February 2017 $BF.B
Boston Beer Company Inc Valuation – Initial Coverage $SAM
Constellation Brands Inc Valuation – August 2016 $STZ
Reynolds American Inc Valuation – July 2016 $RAI
Philip Morris International Inc Valuation – June 2016 $PM
Altria Group Inc Valuation – June 2016 $MO
Constellation Brands Inc Valuation – January 2016 Update $STZ
Molson Coors Brewing Co. Valuation – November 2015 Update $TAP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Molson Coors Brewing Co Valuation – Initial Coverage $TAP

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Molson Coors Brewing Co (TAP) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Molson Coors Brewing Company (MCBC) is a holding company that operates as a brewer. The Company has a portfolio of brands, including Carling, Coors Light, Molson Canadian and Staropramen, as well as craft and specialty beers, such as Blue Moon, Creemore Springs, Cobra and Doom Bar. The Company operates through four segments: Molson Coors Canada (MCC or Canada segment); MillerCoors LLC (MillerCoors or U.S. segment); Molson Coors Europe (Europe segment), and Molson Coors International (MCI). Its Canada segment consists of production, marketing and sales of its brands, including core brands Coors Light and the Molson brand family, as well as Carling, Coors Banquet, Rickard’s and other owned and licensed brands in Canada. Its United States segment holds interest in MillerCoors, its joint venture with SABMiller for the United States operations. Its MCI segment includes Latin America, Asia, Europe and Australia.

TAP Chart

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ModernGraham Valuation of TAP – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $22,238,569,323 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.69 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 76.88% Pass
6. Moderate PEmg Ratio PEmg < 20 18.77 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.90 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.69 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -11.53 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $5.41
MG Growth Estimate 10.65%
MG Value $161.24
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $78.47
MG Value based on 0% Growth $46.00
Market Implied Growth Rate 5.14%
Current Price $101.59
% of Intrinsic Value 63.01%

Molson Coors Brewing Co qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $3.17 in 2013 to an estimated $5.41 for 2017. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.14% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Molson Coors Brewing Co revealed the company was trading above its Graham Number of $84.34. The company pays a dividend of $1.64 per share, for a yield of 1.6% Its PEmg (price over earnings per share – ModernGraham) was 18.77, which was below the industry average of 28.57, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-73.82.

Molson Coors Brewing Co performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$73.82
Graham Number $84.34
PEmg 18.77
Current Ratio 0.69
PB Ratio 1.90
Current Dividend $1.64
Dividend Yield 1.61%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $2,169,600,000
Total Current Liabilities $3,157,500,000
Long-Term Debt $11,387,700,000
Total Assets $29,341,500,000
Intangible Assets $22,282,000,000
Total Liabilities $17,922,800,000
Shares Outstanding (Diluted Average) 213,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.95
Dec2016 $9.26
Dec2015 $1.93
Dec2014 $2.76
Dec2013 $3.08
Dec2012 $2.44
Dec2011 $3.63
Dec2010 $3.78
Dec2009 $3.87
Dec2008 $2.04
Dec2007 $2.71
Dec2006 $2.08
Dec2005 $0.84
Dec2004 $2.60
Dec2003 $2.39
Dec2002 $2.21
Dec2001 $1.66
Dec2000 $1.47
Dec1999 $1.23
Dec1998 $0.91
Dec1997 $1.08

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.41
Dec2016 $4.73
Dec2015 $2.56
Dec2014 $2.97
Dec2013 $3.17
Dec2012 $3.19
Dec2011 $3.44
Dec2010 $3.20
Dec2009 $2.71
Dec2008 $2.10
Dec2007 $2.13
Dec2006 $1.90
Dec2005 $1.85
Dec2004 $2.26
Dec2003 $1.99
Dec2002 $1.70
Dec2001 $1.38

Recommended Reading:

Other ModernGraham posts about the company

5 Speculative and Overvalued Companies to Avoid – November 2015
Molson Coors Brewing Co. Valuation – November 2015 Update $TAP
30 Companies in the Spotlight This Week – 11/15/14
Molson Coors Brewing Company Annual Valuation – 2014 $TAP
19 Companies in the Spotlight This Week – 8/9/14

Other ModernGraham posts about related companies

Constellation Brands Inc Valuation – February 2017 $STZ
Brown-Forman Corporation – February 2017 $BF.B
Boston Beer Company Inc Valuation – Initial Coverage $SAM
Constellation Brands Inc Valuation – August 2016 $STZ
Reynolds American Inc Valuation – July 2016 $RAI
Philip Morris International Inc Valuation – June 2016 $PM
Altria Group Inc Valuation – June 2016 $MO
Constellation Brands Inc Valuation – January 2016 Update $STZ
Molson Coors Brewing Co. Valuation – November 2015 Update $TAP
Brown-Forman Corporation Analysis – September 2015 Update $BF/B

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cooper-Standard Holdings Inc Valuation – Initial Coverage $CPS

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Cooper-Standard Holdings Inc (CPS) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Cooper-Standard Holdings Inc. is a holding company. The Company, through its subsidiaries, manufactures sealing, fuel and brake delivery, fluid transfer and anti-vibration systems components for use in passenger vehicles and light trucks. The Company operates through four segments, which include North America, Europe, South America and Asia Pacific. The Company’s principal products within each of these segments are sealing systems, fuel and brake delivery systems, fluid transfer systems and anti-vibration systems. The sealing systems protect vehicle interiors from weather, dust and noise intrusion. Its fuel and brake delivery systems sense, deliver and control fluids to fuel and brake systems. Its fluid transfer systems sense, deliver and control fluid and vapors for optimal powertrain and heating, ventilation and air conditioning (HVAC) operation. The Company’s anti-vibration systems control and isolate noise and vibration in the vehicle.

CPS Chart

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ModernGraham Valuation of CPS – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,815,673,047 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.70 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 54433.33% Pass
6. Moderate PEmg Ratio PEmg < 20 19.47 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.77 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.70 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.41 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $5.30
MG Growth Estimate 15.00%
MG Value $204.20
Opinion Undervalued
MG Grade D+
MG Value based on 3% Growth $76.91
MG Value based on 0% Growth $45.08
Market Implied Growth Rate 5.49%
Current Price $103.27
% of Intrinsic Value 50.57%

Cooper-Standard Holdings Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability over the last ten years, the poor dividend history, and the high PB ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.43 in 2012 to an estimated $5.3 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.49% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Cooper-Standard Holdings Inc revealed the company was trading above its Graham Number of $83.9. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 19.47, which was above the industry average of 18.47. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-27.08.

Cooper-Standard Holdings Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$27.08
Graham Number $83.90
PEmg 19.47
Current Ratio 1.70
PB Ratio 2.77
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $1,255,397,000
Total Current Liabilities $740,224,000
Long-Term Debt $726,688,000
Total Assets $2,463,304,000
Intangible Assets $256,742,000
Total Liabilities $1,763,450,000
Shares Outstanding (Diluted Average) 18,761,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.89
Dec2015 $6.08
Dec2014 $2.39
Dec2013 $2.24
Dec2012 $4.14
Dec2011 $3.93

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.30
Dec2015 $3.93
Dec2014 $2.75
Dec2013 $2.64
Dec2012 $2.43
Dec2011 $1.31

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Standard Motor Products Inc Valuation – Initial Coverage $SMP
Harman International Industries Inc Valuation – January 2017 $HAR
BorgWarner Inc Valuation – December 2016 $BWA
Ford Motor Company Valuation – November 2016 $F
CarMax Inc Valuation – November 2016 $KMX
Advance Auto Parts Inc Valuation – November 2016 $AAP
General Motors Company Valuation – November 2016 $GM
Delphi Automotive PLC Valuation – August 2016 $DLPH
Carmax Inc Valuation – August 2016 $KMX
BorgWarner Inc Valuation – August 2016 $BWA

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Cooper Companies Inc Valuation – Initial Coverage $COO

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Cooper Companies Inc (COO) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Cooper Companies, Inc. is a global medical device company. The Company operates through two business units: CooperVision, Inc. and CooperSurgical, Inc. CooperVision offers soft contact lenses for the vision correction market. CooperVision develops, manufactures and markets a range of single-use, two-week and monthly contact lenses. CooperVision services three primary regions: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific. CooperVision offers spherical, aspherical, toric, multifocal and toric multifocal lens products in various modalities. CooperVision’s products are primarily manufactured at its facilities located in the United Kingdom, Puerto Rico, Hungary, Costa Rica and New York. CooperSurgical offers an array of products and services focused on advancing the health of families through a portfolio of products and services focusing on women’s health, fertility and diagnostics.

COO Chart

COO data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of COO – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $9,266,892,578 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.74 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 209.72% Pass
6. Moderate PEmg Ratio PEmg < 20 29.05 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.42 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.74 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.78 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $6.47
MG Growth Estimate 6.43%
MG Value $138.34
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $93.87
MG Value based on 0% Growth $55.03
Market Implied Growth Rate 10.28%
Current Price $188.10
% of Intrinsic Value 135.97%

Cooper Companies Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.53 in 2013 to an estimated $6.47 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 10.28% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Cooper Companies Inc revealed the company was trading above its Graham Number of $106.27. The company pays a dividend of $0.06 per share, for a yield of 0% Its PEmg (price over earnings per share – ModernGraham) was 29.05, which was below the industry average of 32.29, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-17.17.

Cooper Companies Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$17.17
Graham Number $106.27
PEmg 29.05
Current Ratio 1.74
PB Ratio 3.42
Current Dividend $0.06
Dividend Yield 0.03%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 10/1/2016
Total Current Assets $934,458,000
Total Current Liabilities $536,455,000
Long-Term Debt $1,107,448,000
Total Assets $4,475,918,000
Intangible Assets $2,605,834,000
Total Liabilities $1,776,051,000
Shares Outstanding (Diluted Average) 49,026,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $9.07
Oct2016 $5.59
Oct2015 $4.14
Oct2014 $5.51
Oct2013 $5.96
Oct2012 $5.05
Oct2011 $3.63
Oct2010 $2.43
Oct2009 $2.21
Oct2008 $1.43
Oct2007 -$0.25
Oct2006 $1.44
Oct2005 $2.04
Oct2004 $2.59
Oct2003 $2.09
Oct2002 $1.57
Oct2001 $1.22
Oct2000 $1.00
Oct1999 $0.88
Oct1998 $1.31
Oct1997 $1.20

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $6.47
Oct2016 $5.20
Oct2015 $4.96
Oct2014 $5.08
Oct2013 $4.53
Oct2012 $3.53
Oct2011 $2.47
Oct2010 $1.75
Oct2009 $1.40
Oct2008 $1.14
Oct2007 $1.19
Oct2006 $1.93
Oct2005 $2.08
Oct2004 $1.96
Oct2003 $1.55
Oct2002 $1.25
Oct2001 $1.10

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Edwards Lifesciences Corp Valuation – January 2017 $EW
Baxter International Inc Valuation – January 2017 $BAX
CONMED Corporation Valuation – Initial Coverage $CNMD
Boston Scientific Corp Valuation – January 2017 $BSX
Centene Corp Valuation – Initial Coverage $CNC
Invacare Corporation Valuation – Initial Coverage $IVC
Becton Dickinson and Co Valuation – January 2017 $BDX
Select Medical Holdings Corp Valuation – Initial Coverage $SEM
Chemed Corporation Valuation – Initial Coverage $CHE
Inogen Inc Valuation – Initial Coverage $INGN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Molson Coors Brewing Co. Valuation – November 2015 Update $TAP

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – October 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Molson Coors Brewing Co. (TAP) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Molson Coors Brewing Company (MCBC) is a holding Company that operates as a brewer. The Company has a portfolio of owned and partner brands, including Carling, Coors Light, Molson Canadian and Staropramen brands, as well as craft and beers, such as Blue Moon, Creemore Springs, Cobra and Sharp’s Doom Bar. The Company operates in four segments: Molson Coors Canada (MCC or Canada segment), operating in Canada; MillerCoors LLC (MillerCoors or U.S. segment), operating in the United States (U.S.); Molson Coors Europe (Europe segment), operating in Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Republic of Ireland, Romania, Serbia, Slovakia and the United Kingdom (U.K.), and Molson Coors International (MCI), operating in various other countries.

[level-free]

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Downloadable PDF version of this valuation:

ModernGraham Valuation of TAP – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $15,980,084,797 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.63 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 19.83% Fail
6. Moderate PEmg Ratio PEmg < 20 31.85 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.12 Pass
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.63 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -2.64 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

TAP value Chart November 2015

EPSmg $2.71
MG Growth Estimate -3.19%
MG Value $5.73
Opinion Overvalued
MG Value based on 3% Growth $39.33
MG Value based on 0% Growth $23.06
Market Implied Growth Rate 11.68%
Current Price $86.41
% of Intrinsic Value 1508.81%

Molson Coors Brewing Co. does not qualify for either the Enterprising Investor or the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the high PEmg ratio.  The Enterprising Investor is concerned by the level of debt relative to the current assets and the lack of earnings growth over the last five years.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should explore other opportunities at this time or proceed with a cautious speculative attitude.

As for a valuation, the company appears to be overvalued after seeing its EPSmg (normalized earnings) decline from $3.45 in 2011 to an estimated $2.71 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 11.68% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Molson Coors Brewing Co. (TAP)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

TAP Charts November 2015

Net Current Asset Value (NCAV) -$23.13
Graham Number $46.83
PEmg 31.85
Current Ratio 0.63
PB Ratio 2.12
Dividend Yield 1.81%
Number of Consecutive Years of Dividend Growth 2

 

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Most Recent Balance Sheet Figures

Total Current Assets $1,476,200,000
Total Current Liabilities $2,349,500,000
Long-Term Debt $2,305,200,000
Total Assets $13,397,200,000
Intangible Assets $7,488,600,000
Total Liabilities $5,790,100,000
Shares Outstanding (Diluted Average) 186,500,000

Earnings Per Share History

Next Fiscal Year Estimate $2.38
Dec14 $2.76
Dec13 $3.08
Dec12 $2.44
Dec11 $3.63
Dec10 $3.78
Dec09 $3.87
Dec08 $2.04
Dec07 $2.74
Dec06 $2.08
Dec05 $0.84
Dec04 $2.60
Dec03 $2.39
Dec02 $2.21
Dec01 $1.66
Dec00 $1.47
Dec99 $1.23
Dec98 $0.91
Dec97 $1.08
Dec96 $0.57
Dec95 $0.57

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.71
Dec14 $2.97
Dec13 $3.17
Dec12 $3.19
Dec11 $3.45
Dec10 $3.20
Dec09 $2.72
Dec08 $2.11
Dec07 $2.14
Dec06 $1.90
Dec05 $1.86
Dec04 $2.26
Dec03 $1.99
Dec02 $1.70
Dec01 $1.38
Dec00 $1.18
Dec99 $0.98

Recommended Reading:

Other ModernGraham posts about the company

30 Companies in the Spotlight This Week – 11/15/14
Molson Coors Brewing Company Annual Valuation – 2014 $TAP
19 Companies in the Spotlight This Week – 8/9/14
Molson Coors Brewing Company Quarterly Valuation – August 2014 $TAP
17 Companies in the Spotlight This Week – 5/10/14

Other ModernGraham posts about related companies

Brown-Forman Corporation Analysis – September 2015 Update $BF/B
Brown-Forman Corporation Analysis – June 2015 Update $BF.B
Philip Morris International Annual Valuation – 2015 $PM
Brown-Forman Corporation Quarterly Valuation – March 2015 $BF.B
Lorillard Inc. Quarterly Valuation – March 2015 $LO
Reynolds American Inc. Annual Valuation – 2015 $RAI
Altria Group Inc. Annual Valuation – 2015 $MO
Brown-Forman Corporation Quarterly Valuation – December 2014 $BF.B
Constellation Brands Inc. Annual Valuation – 2014 $STZ
Lorillard Inc. Quarterly Valuation – December 2014 $LO

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Molson Coors Brewing Company Annual Valuation – 2014 $TAP

500px-Molson_Coors_logo.svgBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – November 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Molson Coors Brewing Co. (TAP) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Molson Coors Brewing Company (MCBC) is a holding company. The Company operates in five business segments: Canada, the U.S., Central Europe, the U.K., and Molson Coors International (MCI). The Company is a brewer and has a portfolio of owned and partner brands, including signature brands Coors Light, Molson Canadian, Carling and Staropramen, as well as craft and specialty beers such as Blue Moon, Creemore Springs, Cobra and Doom Bar. Its other subsidiaries include: Molson Coors Canada (MCC), operating in Canada; MillerCoors LLC (MillerCoors) operating in the United States (U.S.); Molson Coors Brewing Company (UK) Limited (MCBC-UK, operating in the United Kingdom (U.K.) and the Republic of Ireland; Molson Coors International (MCI) operating in various other countries; and its other non-operating subsidiaries. In June 15, 2012, the Company acquired StarBev. In January 2013, it acquired Ireland’s Franciscan Well brewery.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – FAIL
  3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 3/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – FAIL
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – FAIL
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $77.18
MG Value $36.50
MG Opinion Overvalued
Value Based on 3% Growth $49.76
Value Based on 0% Growth $29.17
Market Implied Growth Rate 6.99%
Net Current Asset Value (NCAV) -$24.98
PEmg 22.49
Current Ratio 0.69
PB Ratio 1.70

Balance Sheet – September 2014

Current Assets $1,812,000,000
Current Liabilities $2,620,000,000
Total Debt $2,346,000,000
Total Assets $14,833,000,000
Intangible Assets $8,320,000,000
Total Liabilities $6,435,000,000
Outstanding Shares 185,100,000

Earnings Per Share

2014 (estimate) $4.16
2013 $3.08
2012 $2.44
2011 $3.63
2010 $3.78
2009 $3.87
2008 $2.04
2007 $2.74
2006 $2.08
2005 $0.84
2004 $2.60

Earnings Per Share – ModernGraham

2014 (estimate) $3.43
2013 $3.17
2012 $3.19
2011 $3.45
2010 $3.20
2009 $2.72

Dividend History

Conclusion:

Molson Coors is not suitable for either the Defensive Investor or Enterprising Investor.  The Defensive Investor has concerns with the low current ratio and the high PEmg ratio.  The Enterprising Investor is concerned by the high level of debt relative to the current assets.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should explore other opportunities at this time.  From a valuation side of things, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $3.20 in 2010 to only an estimated $3.43 for 2014.  This low level of demonstrated growth does not support the market’s implied estimate of 6.99% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the price.

Be sure to check out previous ModernGraham valuations of Molson Coors Brewing Co. (TAP) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Molson Coors Brewing Co. (TAP)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Molson Coors Brewing Co. (TAP) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

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