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Steven Madden Ltd Valuation – May 2018 $SHOO

Company Profile (excerpt from Reuters): Steven Madden, Ltd., incorporated on November 10, 1998, and its subsidiaries design, source, market and sell name brand and private label footwear for women, men and children, and name brand and private label fashion handbags and accessories. The Company operates through five segments: Wholesale Footwear, Wholesale Accessories, Retail, First Cost and Licensing. The Company’s products are sold through its retail stores and e-commerce Websites within the United States, Canada, Mexico and South Africa, as well as department stores, specialty stores, luxury retailers, value priced retailers, national chains, merchants and catalog retailers. It provides merchandising support to its department store customers, including in-store fixtures and signage, supervision of displays and merchandising of its various product lines.

SHOO Chart

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Downloadable PDF version of this valuation:

ModernGraham Valuation of SHOO – 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 $2,930,778,721 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.61 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
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 92.79% Pass
6. Moderate PEmg Ratio PEmg < 20 23.21 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.66 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 3.61 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
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 $2.20
MG Growth Estimate 3.83%
MG Value $35.61
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $31.96
MG Value based on 0% Growth $18.73
Market Implied Growth Rate 7.35%
Current Price $51.15
% of Intrinsic Value 143.63%

Steven Madden, Ltd. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the lack of dividends. 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 $1.76 in 2014 to an estimated $2.2 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 7.35% 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 Steven Madden, Ltd. revealed the company was trading above its Graham Number of $28.66. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 23.21, which was below the industry average of 49.11, 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 $7.01.

Steven Madden, Ltd. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $7.01
Graham Number $28.66
PEmg 23.21
Current Ratio 3.61
PB Ratio 3.66
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 3/1/2018
Total Current Assets $622,486,000
Total Current Liabilities $172,319,000
Long-Term Debt $0
Total Assets $1,021,933,000
Intangible Assets $298,539,000
Total Liabilities $220,347,000
Shares Outstanding (Diluted Average) 57,326,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.67
Dec2017 $2.04
Dec2016 $2.03
Dec2015 $1.85
Dec2014 $1.76
Dec2013 $1.98
Dec2012 $1.81
Dec2011 $1.50
Dec2010 $1.19
Dec2009 $0.81
Dec2008 $0.45
Dec2007 $0.50
Dec2006 $0.62
Dec2005 $0.27
Dec2004 $0.17
Dec2003 $0.29
Dec2002 $0.29
Dec2001 $0.19
Dec2000 $0.25
Dec1999 $0.18
Dec1998 $0.10

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.20
Dec2017 $1.96
Dec2016 $1.91
Dec2015 $1.82
Dec2014 $1.76
Dec2013 $1.65
Dec2012 $1.38
Dec2011 $1.07
Dec2010 $0.81
Dec2009 $0.59
Dec2008 $0.45
Dec2007 $0.43
Dec2006 $0.37
Dec2005 $0.24
Dec2004 $0.23
Dec2003 $0.25
Dec2002 $0.23

Recommended Reading:

Other ModernGraham posts about the company

15 Best Stocks for Value Investors This Week – 1/14/17
Steve Madden Ltd Valuation – Initial Coverage $SHOO

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Under Armour Inc Valuation – March 2018 $UA
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L Brands Inc Valuation – March 2018 $LB
Nike Inc Valuation – February 2018 $NKE
Nike Inc Valuation – July 2017 $NKE

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.

3D Systems Corp Valuation – Initial Coverage $DDD

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 – March 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 3D Systems Corp (DDD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): 3D Systems Corporation is a holding company. The Company provides three-dimensional (3D) printing solutions, including 3D printers, print materials, software, on demand manufacturing services and digital design tools. Its precision healthcare capabilities include simulation, Virtual Surgical Planning (VSP), and printing of medical and dental devices and surgical guides and instruments. Its solutions support applications in a range of industries, including healthcare, aerospace, automotive and durable goods. The Company offers a range of 3D printers, print materials, software, haptic devices, scanners and virtual surgical simulators. The Company offers a range of 3D printing technologies, including Stereolithography (SLA), Selective Laser Sintering (SLS), Direct Metal Printing (DMP), MultiJet Printing (MJP) and ColorJet Printing (CJP). The Company also offers 3D virtual reality simulators and simulator modules for medical applications.

DDD Chart

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Downloadable PDF version of this valuation:

ModernGraham Valuation of DDD – July 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 $2,005,560,535 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.89 Pass
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 -2874.51% Fail
6. Moderate PEmg Ratio PEmg < 20 -17.40 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.15 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 2.89 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg -$1.04
MG Growth Estimate -4.25%
MG Value $1.63
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$15.06
MG Value based on 0% Growth -$8.83
Market Implied Growth Rate -12.95%
Current Price $18.07
% of Intrinsic Value 1110.24%

3D Systems Corporation does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor.  The Defensive Investor is concerned with the  insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years, 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 Overvalued after seeing its EPSmg (normalized earnings) decline from $0.41 in 2013 to an estimated $-1.04 for 2017.  This level of negative earnings does not support a positive valuation.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 3D Systems Corporation revealed the company was trading above its Graham Number of $8.21.  The company does not pay a dividend.  Its PEmg (price over earnings per share – ModernGraham) was -17.4, which was below the industry average of 41.95, 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 $1.63.

3D Systems Corporation 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) $1.63
Graham Number $8.21
PEmg -17.40
Current Ratio 2.89
PB Ratio 3.15
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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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 3/1/2017
Total Current Assets $409,257,000
Total Current Liabilities $141,700,000
Long-Term Debt $0
Total Assets $865,630,000
Intangible Assets $337,750,000
Total Liabilities $228,126,000
Shares Outstanding (Diluted Average) 111,289,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.54
Dec2016 -$0.35
Dec2015 -$5.85
Dec2014 $0.11
Dec2013 $0.45
Dec2012 $0.48
Dec2011 $0.47
Dec2010 $0.28
Dec2009 $0.02
Dec2008 -$0.09
Dec2007 -$0.11
Dec2006 -$0.59
Dec2005 $0.18
Dec2004 $0.02
Dec2003 -$0.70
Dec2002 -$0.39
Dec2001 -$0.06
Dec2000 $0.20
Dec1999 -$0.16
Dec1998 $0.06
Dec1997 -$0.13

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$1.04
Dec2016 -$1.56
Dec2015 -$1.74
Dec2014 $0.33
Dec2013 $0.41
Dec2012 $0.34
Dec2011 $0.22
Dec2010 $0.03
Dec2009 -$0.11
Dec2008 -$0.15
Dec2007 -$0.20
Dec2006 -$0.26
Dec2005 -$0.13
Dec2004 -$0.25
Dec2003 -$0.33
Dec2002 -$0.12

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

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Littelfuse Inc Valuation – Initial Coverage $LFUS
CTS Corporation Valuation – Initial Coverage $CTS
IT Hardware Industry Review – March 2017
Garmin Ltd Valuation – March 2017 $GRMN
Hewlett Packard Enterprise Co Valuation – Initial Valuation $HPE

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.

Dominion Diamond Corp Valuation – Initial Coverage $TSE:DDC

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 – March 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 Dominion Diamond Corp (TSE:DDC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Dominion Diamond Corp is a diamond mining company. The Company is focused on the mining and marketing of rough diamonds to the global market. The Company’s segments include the Ekati Diamond Mine, the Diavik Diamond Mine and the Corporate segment. It supplies rough diamonds to the global market from its operation of the Ekati Diamond Mine (in which it owns a controlling interest) and its approximately 40% ownership interest in the Diavik Diamond Mine. It controls the Ekati Diamond Mine, as well as the associated diamond sorting and sales facilities in Toronto and Yellowknife, Canada, Mumbai, India, and Antwerp, Belgium. The Ekati Diamond Mine consists of the Core Zone, which includes the operating mine and other permitted kimberlite pipes, as well as the Buffer Zone, an adjacent area hosting kimberlite pipes having both development and exploration potential, such as the Jay kimberlite pipe and the Lynx kimberlite pipe.

DDC Chart

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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.

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ModernGraham Valuation of TSE-DDC – July 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 $1,518,832,645 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.66 Pass
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 45.69% Pass
6. Moderate PEmg Ratio PEmg < 20 17.13 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.94 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 2.66 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $1.04
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $15.05
MG Value based on 0% Growth $8.82
Market Implied Growth Rate 4.32%
Current Price $17.78
% of Intrinsic Value N/A

Dominion Diamond Corp 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, insufficient earnings stability over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years.  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 Overvalued after seeing its EPSmg (normalized earnings) decline from $2.21 in 2014 to an estimated $1.04 for 2018.  This level of demonstrated earnings growth does not support the market’s implied estimate of 4.32% 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 Dominion Diamond Corp revealed the company was trading below its Graham Number of $28.56.  The company pays a dividend of $0.53 per share, for a yield of 3%, putting it among the best dividend paying stocks today.  Its PEmg (price over earnings per share – ModernGraham) was 17.13, which was below the industry average of 146.28, 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 $-3.5.

Dominion Diamond Corp receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$3.50
Graham Number $28.56
PEmg 17.13
Current Ratio 2.66
PB Ratio 0.94
Current Dividend $0.53
Dividend Yield 2.96%
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 4/1/2017
Total Current Assets $864,004,000
Total Current Liabilities $325,297,000
Long-Term Debt $0
Total Assets $2,741,732,000
Intangible Assets $0
Total Liabilities $1,156,690,000
Shares Outstanding (Diluted Average) 83,648,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.85
Jan2017 $0.00
Jan2016 -$0.57
Jan2015 $0.95
Jan2014 $6.12
Jan2013 $0.41
Jan2012 $0.30
Jan2011 $0.51
Jan2010 -$1.03
Jan2009 $1.41
Jan2008 $1.83
Jan2007 $2.07
Jan2006 $1.61
Jan2005 $1.10
Jan2004 $0.64
Jan2003 -$0.11
Jan2002 $1.48
Jan2001 $0.02
Jan2000 -$0.11
Jan1999 $0.01
Jan1998 -$0.04

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.04
Jan2017 $0.88
Jan2016 $1.36
Jan2015 $2.10
Jan2014 $2.21
Jan2013 $0.27
Jan2012 $0.34
Jan2011 $0.56
Jan2010 $0.78
Jan2009 $1.66
Jan2008 $1.67
Jan2007 $1.42
Jan2006 $1.04
Jan2005 $0.71
Jan2004 $0.47
Jan2003 $0.35
Jan2002 $0.47

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

Teck Resources Ltd Valuation – Initial Coverage $TSE:TECK.B
Consol Energy Inc Valuation – March 2017 $CNX
Stillwater Mining Company Valuation – Initial Coverage $SWC
Allegheny Technologies Inc Valuation – March 2017 $ATI
Silver Standard Resources Inc Valuation – Initial Coverage $TSE:SSO
Sandstorm Gold Ltd Valuation – Initial Coverage $TSE:SSL
Kirkland Lakes Gold Ltd Valuation – Initial Coverage $TSE:KL
Klondex Mines Ltd Valuation – Initial Coverage $TSE:KDX
Natural Resource Partners LP Valuation – February 2017 $NRP
Kaiser Aluminum Corp Valuation – Initial Coverage $KALU

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.

Steve Madden Ltd Valuation – Initial Coverage $SHOO

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 – December 2016.  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 Steve Madden Ltd (SHOO) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Steven Madden, Ltd. and its subsidiaries design, source, market and sell name brand and private label footwear for women, men and children. The Company operates through five segments: Wholesale Footwear, which consists of brands, including Steve Madden Women’s and Dolce Vita; Wholesale Accessories, which includes Betseyville and Luv Betse accessories brands; First Cost, which earns commissions for serving as a buying agent for footwear products under private labels for market merchandisers; Retail, which includes Steve Madden stores located in shopping malls and in urban street locations across the United States, Canada, Mexico and South Africa, and Licensing, which is engaged in the licensing of the Steve Madden and Madden Girl trademarks for use in connection with the manufacture and sale of outerwear and men’s leather accessories.

SHOO Chart

SHOO data by YCharts

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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 SHOO – January 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 $2,097,632,986 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.63 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
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 216.99% Pass
6. Moderate PEmg Ratio PEmg < 20 18.46 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.85 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 2.63 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
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 $1.88
MG Growth Estimate 5.46%
MG Value $36.50
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $27.26
MG Value based on 0% Growth $15.98
Market Implied Growth Rate 4.98%
Current Price $34.70
% of Intrinsic Value 95.06%

Steven Madden, Ltd. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PB ratio. The Enterprising Investor is only concerned with the lack of dividends. 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 Fairly Valued after growing its EPSmg (normalized earnings) from $1.38 in 2012 to an estimated $1.88 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 4.98% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Steven Madden, Ltd. revealed the company was trading above its Graham Number of $22.88. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 18.46, which was below the industry average of 22.16, 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 $4.5.

Steven Madden, Ltd. receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $4.50
Graham Number $22.88
PEmg 18.46
Current Ratio 2.63
PB Ratio 2.85
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 $520,255,000
Total Current Liabilities $197,771,000
Long-Term Debt $0
Total Assets $976,368,000
Intangible Assets $282,920,000
Total Liabilities $253,005,000
Shares Outstanding (Diluted Average) 59,329,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.95
Dec2015 $1.85
Dec2014 $1.76
Dec2013 $1.98
Dec2012 $1.81
Dec2011 $1.50
Dec2010 $1.19
Dec2009 $0.81
Dec2008 $0.45
Dec2007 $0.50
Dec2006 $0.62
Dec2005 $0.27
Dec2004 $0.17
Dec2003 $0.29
Dec2002 $0.29
Dec2001 $0.19
Dec2000 $0.25
Dec1999 $0.18
Dec1998 $0.10
Dec1997 $0.06
Dec1996 $0.03

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.88
Dec2015 $1.82
Dec2014 $1.76
Dec2013 $1.65
Dec2012 $1.38
Dec2011 $1.07
Dec2010 $0.81
Dec2009 $0.59
Dec2008 $0.45
Dec2007 $0.43
Dec2006 $0.37
Dec2005 $0.24
Dec2004 $0.23
Dec2003 $0.25
Dec2002 $0.23
Dec2001 $0.18
Dec2000 $0.16

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

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Chico’s FAS Inc Valuation – Initial Coverage $CHS
Hanesbrands Inc Valuation – December 2016 $HBI
Nike Inc Valuation – November 2016 $NKE
Wolverine World Wide Inc Valuation – September 2016 $WWW
Ralph Lauren Corp Valuation – August 2016 $RL
Gap Inc Valuation – August 2016 $GPS
PVH Corp Valuation – August 2016 $PVH
American Eagle Outfitters Valuation – August 2016 $AEO
Hanesbrands Inc Valuation – August 2016 $HBI

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.

E I du Pont de Nemours & Co Valuation – August 2016 $DD

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 – August 2016.  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 E I du Pont de Nemours & Co (DD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): E. I. du Pont de Nemours and Company (DuPont) is a science and technology-based company. The Company consists of over 10 businesses aggregated into six segments: Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety & Protection. Its products include corn hybrids and soybean varieties, herbicides, fungicides and insecticides in Agriculture segment; photopolymers and electronic materials in Electronics & Communications segment; enzymes and bio-based materials in Industrial Biosciences segment; cultures, emulsifiers, texturants, natural sweeteners and soy-based food ingredients in Nutrition & Health segment; engineering polymers, packaging and industrial polymers, films and elastomers in Performance Materials segment, and nonwovens, aramids and solid surfaces in Safety & Protection segment. It is also involved in other businesses, such as pre-commercial programs, nonaligned businesses and pharmaceuticals in other.

chart (60)

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of DD – August 2016

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 $60,385,212,650 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.16 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 25.61% Fail
6. Moderate PEmg Ratio PEmg < 20 21.16 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.92 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 2.16 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
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

DD value chart August 2016

EPSmg $3.29
MG Growth Estimate 1.27%
MG Value $36.35
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $47.72
MG Value based on 0% Growth $27.98
Market Implied Growth Rate 6.33%
Current Price $69.65
% of Intrinsic Value 191.60%

E I Du Pont De Nemours And Co is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. 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 $3.03 in 2012 to an estimated $3.29 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.33% 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 below the price.

At the time of valuation, further research into E I Du Pont De Nemours And Co revealed the company was trading above its Graham Number of $28.57. The company pays a dividend of $1.52 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 21.16, which was below the industry average of 25.72, 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 $-15.74.

E I Du Pont De Nemours And Co receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

DD charts August 2016

Net Current Asset Value (NCAV) -$15.74
Graham Number $28.57
PEmg 21.16
Current Ratio 2.16
PB Ratio 5.92
Current Dividend $1.52
Dividend Yield 2.18%
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 6/1/2016
Total Current Assets $18,091,000,000
Total Current Liabilities $8,378,000,000
Long-Term Debt $0
Total Assets $42,266,000,000
Intangible Assets $8,212,000,000
Total Liabilities $31,929,000,000
Shares Outstanding (Diluted Average) 879,179,000

Earnings Per Share History

Next Fiscal Year Estimate $3.14
Dec2015 $2.16
Dec2014 $3.92
Dec2013 $5.18
Dec2012 $2.91
Dec2011 $3.77
Dec2010 $3.28
Dec2009 $1.92
Dec2008 $2.20
Dec2007 $3.22
Dec2006 $3.38
Dec2005 $2.07
Dec2004 $1.77
Dec2003 $0.96
Dec2002 -$1.11
Dec2001 $4.16
Dec2000 $2.19
Dec1999 $6.99
Dec1998 $3.90
Dec1997 $2.08
Dec1996 $3.18

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.29
Dec2015 $3.44
Dec2014 $3.99
Dec2013 $3.82
Dec2012 $3.03
Dec2011 $3.02
Dec2010 $2.70
Dec2009 $2.46
Dec2008 $2.66
Dec2007 $2.69
Dec2006 $2.09
Dec2005 $1.48
Dec2004 $1.32
Dec2003 $1.61
Dec2002 $2.37
Dec2001 $4.03
Dec2000 $3.86

Recommended Reading:

Other ModernGraham posts about the company

5 Overvalued Dow Components – July 2016
E.I. du Pont de Nemours Valuation – February 2016 $DD
E I du Pont de Nemours & Co Valuation – November 2015 Update $DD
E.I. du Pont de Nemours Valuation – February 2016 $DD
E I du Pont de Nemours & Co Valuation – November 2015 Update $DD

Other ModernGraham posts about related companies

3M Company Valuation – August 2016 $MMM
General Electric Co Valuation – July 2016 $GE
Illinois Tool Works Inc Valuation – July 2016 $ITW
Raven Industries Inc Valuation – July 2016 $RAVN
E.I. du Pont de Nemours Valuation – February 2016 $DD
Honeywell International Inc Valuation – February 2016 $HON
3M Company Valuation – February 2016 Update $MMM
Raven Industries Inc Valuation – January 2016 Update $RAVN
Illinois Tool Works Inc Valuation – January 2016 Update $ITW
E.I. du Pont de Nemours Valuation – February 2016 $DD

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.

E.I. du Pont de Nemours Valuation – February 2016 $DD

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 Companies Benjamin Graham Would Invest In Today – February 2016.  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 E.I. du Pont de Nemours (DD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): E. I. du Pont de Nemours and Company (DuPont) is a science and technology-based company. The Company’s subsidiaries and affiliates conduct manufacturing, seed production or selling activities and distribute products manufactured by the Company. The Company’s segments include Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety & Protection. The Company’s other business operations include various embryonic businesses, such as pre-commercial programs and non-aligned businesses. DuPont conducts research and development (R&D) programs across multiple fields, including biology, chemistry, engineering and materials science. The Company’s brands include Pioneer, DuPont Teflon, Capstone, Opteon yf, Isceon, Suva, Vazo, Vertrel, Virkon, Viton, Zyron and Bynel coextrudable adhesive resins, Elvax EVA resins, DuPont Kevlar, Nomex and Tyvek.

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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. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of DD

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 $52,837,057,292 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.71 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 22.34% Fail
6. Moderate PEmg Ratio PEmg < 20 18.81 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.44 Fail
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 1.71 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.03 Pass
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

DD value chart February 2016

EPSmg $3.21
MG Growth Estimate 1.00%
MG Value $33.74
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $46.56
MG Value based on 0% Growth $27.30
Market Implied Growth Rate 5.16%
Current Price $60.42
% of Intrinsic Value 179.07%

E I Du Pont De Nemours And Co is suitable for the Enterprising Investor but not 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 PB ratio. The Enterprising Investor has no initial concerns. 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 $3.01 in 2012 to an estimated $3.21 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.16% 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.

E I Du Pont De Nemours And Co receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

DD charts February 2016

Net Current Asset Value (NCAV) -$14.92
Graham Number $27.03
PEmg 18.81
Current Ratio 1.71
PB Ratio 5.44
Dividend Yield 2.85%
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 Dec2015
Total Current Assets $17,755,000,000
Total Current Liabilities $10,353,000,000
Long-Term Debt $7,642,000,000
Total Assets $41,166,000,000
Intangible Assets $8,392,000,000
Total Liabilities $31,173,000,000
Shares Outstanding (Diluted Average) 899,527,000

Earnings Per Share History

Next Fiscal Year Estimate $2.90
Dec2015 $2.16
Dec2014 $3.92
Dec2013 $5.18
Dec2012 $2.91
Dec2011 $3.68
Dec2010 $3.28
Dec2009 $1.92
Dec2008 $2.20
Dec2007 $3.22
Dec2006 $3.38
Dec2005 $2.07
Dec2004 $1.77
Dec2003 $0.96
Dec2002 -$1.12
Dec2001 $4.16
Dec2000 $2.19
Dec1999 $6.99
Dec1998 $3.90
Dec1997 $2.08
Dec1996 $3.18

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.21
Dec2015 $3.43
Dec2014 $3.98
Dec2013 $3.80
Dec2012 $3.01
Dec2011 $2.99
Dec2010 $2.70
Dec2009 $2.46
Dec2008 $2.66
Dec2007 $2.69
Dec2006 $2.09
Dec2005 $1.48
Dec2004 $1.32
Dec2003 $1.61
Dec2002 $2.37
Dec2001 $4.03
Dec2000 $3.86

Recommended Reading:

Other ModernGraham posts about the company

E I du Pont de Nemours & Co Valuation – November 2015 Update $DD
The Best Companies of the Chemicals Industry – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15
E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD
5 Undervalued Dow Stocks to Research – August 2015

Other ModernGraham posts about related companies

Honeywell International Inc Valuation – February 2016 $HON
3M Company Valuation – February 2016 Update $MMM
Raven Industries Inc Valuation – January 2016 Update $RAVN
Illinois Tool Works Inc Valuation – January 2016 Update $ITW
E I du Pont de Nemours & Co Valuation – November 2015 Update $DD
E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD
E. I. Du Pont De Nemours and Company Quarterly Valuation – May 2015 $DD
Honeywell International Inc. Valuation – October 2015 Update $HON
Raven Industries Inc. Analysis – October 2015 Update $RAVN
Illinois Tool Works Inc. Analysis – October 2015 Update $ITW

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.

E I du Pont de Nemours & Co Valuation – November 2015 Update $DD

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 E I du Pont de Nemours & Co (DD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): E. I. du Pont de Nemours and Company (DuPont) is a science and technology-based company. The Company’s subsidiaries and affiliates conduct manufacturing, seed production or selling activities and distribute products manufactured by the Company. The Company’s segments include Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety & Protection. The Company’s other business operations include various embryonic businesses, such as pre-commercial programs and non-aligned businesses. DuPont conducts research and development (R&D) programs across multiple fields, including biology, chemistry, engineering and materials science. The Company’s brands include Pioneer, DuPont Teflon, Capstone, Opteon yf, Isceon, Suva, Vazo, Vertrel, Virkon, Viton, Zyron and Bynel coextrudable adhesive resins, Elvax EVA resins, DuPont Kevlar, Nomex and Tyvek.

[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. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of DD – 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 $58,245,735,747 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.04 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 32.16% Fail
6. Moderate PEmg Ratio PEmg < 20 18.73 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.40 Fail
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 2.04 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.94 Pass
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

DD value Chart November 2015

EPSmg $3.56
MG Growth Estimate 2.83%
MG Value $50.38
Opinion Overvalued
MG Value based on 3% Growth $51.59
MG Value based on 0% Growth $30.24
Market Implied Growth Rate 5.11%
Current Price $66.63
% of Intrinsic Value 132.26%

E I du Pont de Nemours & Co qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the insufficient earnings growth over the last ten years and the high PB ratio.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $2.99 in 2011 to an estimated $3.56 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 5.11% 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 E I du Pont de Nemours & Co (DD)?  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

DD Charts November 2015

Net Current Asset Value (NCAV) -$13.74
Graham Number $26.45
PEmg 18.73
Current Ratio 2.04
PB Ratio 5.40
Dividend Yield 2.72%
Number of Consecutive Years of Dividend Growth 0

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

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

Most Recent Balance Sheet Figures

Total Current Assets $17,046,000,000
Total Current Liabilities $8,354,000,000
Long-Term Debt $8,155,000,000
Total Assets $40,302,000,000
Intangible Assets $8,463,000,000
Total Liabilities $29,295,000,000
Shares Outstanding (Diluted Average) 891,286,000

Earnings Per Share History

Next Fiscal Year Estimate $2.53
Dec14 $3.92
Dec13 $5.18
Dec12 $2.91
Dec11 $3.68
Dec10 $3.28
Dec09 $1.92
Dec08 $2.20
Dec07 $3.22
Dec06 $3.38
Dec05 $2.07
Dec04 $1.77
Dec03 $0.96
Dec02 -$1.12
Dec01 $4.16
Dec00 $2.19
Dec99 $6.99
Dec98 $3.90
Dec97 $2.08
Dec96 $3.18
Dec95 $2.81

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.56
Dec14 $3.98
Dec13 $3.80
Dec12 $3.01
Dec11 $2.99
Dec10 $2.70
Dec09 $2.46
Dec08 $2.66
Dec07 $2.69
Dec06 $2.09
Dec05 $1.48
Dec04 $1.32
Dec03 $1.61
Dec02 $2.37
Dec01 $4.03
Dec00 $3.86
Dec99 $4.40

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Chemicals Industry – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15
E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD
5 Undervalued Dow Stocks to Research – August 2015
47 Companies in the Spotlight This Week – 5/16/15

Other ModernGraham posts about related companies

E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD
E. I. Du Pont De Nemours and Company Quarterly Valuation – May 2015 $DD
Honeywell International Inc. Valuation – October 2015 Update $HON
Raven Industries Inc. Analysis – October 2015 Update $RAVN
Illinois Tool Works Inc. Analysis – October 2015 Update $ITW
3M Company Analysis – September 2015 Update $MMM
Honeywell International Inc. Analysis – July 2015 Update $HON
Raven Industries Inc. Analysis – Initial Coverage $RAVN
Illinois Tool Works Analysis – July 2015 Update $ITW
3M Company Quarterly Valuation – May 2015 $MMM

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.

E I Du Pont de Nemours & Company Analysis – August 2015 Update $DD

500px-DuPont.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 Most Undervalued Companies for the Defensive Investor – July 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 E I du Pont de Nemours & Company (DD) fares in the ModernGraham valuation model.

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

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

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  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 – PASS
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

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

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
  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 $53.97
MG Value $54.70
MG Opinion Fairly Valued
Value Based on 3% Growth $52.83
Value Based on 0% Growth $30.97
Market Implied Growth Rate 3.16%
Net Current Asset Value (NCAV) -$14.78
PEmg 14.81
Current Ratio 2.42
PB Ratio 3.62

Balance Sheet – March 2015

Current Assets $21,045,000,000
Current Liabilities $8,705,000,000
Total Debt $12,088,000,000
Total Assets $48,106,000,000
Intangible Assets $8,741,000,000
Total Liabilities $34,517,000,000
Outstanding Shares 911,700,000

Earnings Per Share

2015 (estimate) $2.77
2014 $3.92
2013 $5.18
2012 $2.95
2011 $3.68
2010 $3.28
2009 $1.92
2008 $2.20
2007 $3.22
2006 $3.38
2005 $2.07

Earnings Per Share – ModernGraham

2015 (estimate) $3.64
2014 $3.99
2013 $3.81
2012 $3.02
2011 $2.99
2010 $2.70

Dividend History

Free Cash Flow

Conclusion:

E I du Pont de Nemours & Company qualifies for both the Defensive Investor and the Enterprising Investor.  The Defensive Investor is only initially concerned with the high PB ratio.  The Enterprising Investor has no initial concerns.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the evaluation.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $2.99 in 2011 to an estimated $3.64 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 3.16% 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 within a margin of safety relative to 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 E I du Pont de Nemours & Company?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment below and share it to our Facebook page or  @ModernGraham on Twitter to discuss.

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.  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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E. I. Du Pont De Nemours and Company Quarterly Valuation – May 2015 $DD

500px-DuPont.svgE. I. Du Pont De Nemours and Company (DD) should attract all Enterprising Investors, particularly due to the company’s stable earnings over the last few years. That said, Benjamin Graham, the father of value investing, taught that the most important aspect to consider is whether the company is trading at a discount relative to its intrinsic value. It is through a thorough fundamental analysis that the investor is able to determine a potential investment’s merits. Here’s an updated look at how Du Pont fares in the ModernGraham valuation model.

This model is inspired by the teachings of Benjamin Graham, and considers numerous metrics intended to help the investor reduce risk levels. The first part of the analysis is to determine whether the company is suitable for the very conservative Defensive Investor or the less conservative Enterprising Investor, who is willing to spend a greater amount of time conducting further research.

In addition, Graham strongly suggested that investors avoid speculation, in order to remove the subjective elements of emotion. This is best achieved by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another. By using the ModernGraham method, one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

DD Chart

DD data by YCharts

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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 one-third over the last 10 years, using three-year averages at the beginning and end of the period – PASS
  6. Moderate PEmg (price over normalized earnings) ratio – PEmg is less than 20 – PASS
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – Must pass at least 4 of the following 5 tests, or be suitable for a Defensive Investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – Current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt-to-Net Current Assets ratio less than 1.1 – PASS
  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 that 5 years ago – PASS

Valuation Summary

Key Data

Recent Price $72.76
MG Value $75.14
MG Opinion Fairly Valued
Value Based on 3% Growth $58.19
Value Based on 0% Growth $34.11
Market Implied Growth Rate 4.81%
Net Current Asset Value (NCAV) -$15.38
PEmg 18.13
Current Ratio 1.80
PB Ratio 5.19

Balance Sheet – March 2015

Current Assets $19,319,000,000
Current Liabilities $10,732,000,000
Total Debt $8,763,000,000
Total Assets $46,175,000,000
Intangible Assets $8,672,000,000
Total Liabilities $33,373,000,000
Outstanding Shares 913,800,000

Earnings Per Share

2015 (estimate) $3.88
2014 $3.92
2013 $5.18
2012 $2.95
2011 $3.68
2010 $3.28
2009 $1.92
2008 $2.20
2007 $3.22
2006 $3.38
2005 $2.07

Earnings Per Share – ModernGraham

2015 (estimate) $4.01
2014 $3.99
2013 $3.81
2012 $3.02
2011 $2.99
2010 $2.70

Dividend History

DD Dividend Chart

DD Dividend data by YCharts

Conclusion

Du Pont should satisfy the Enterprising Investor, but not the Defensive Investor. The Defensive Investor is concerned with the low current ratio and high PB ratio, while the Enterprising Investor has no initial concerns. Therefore, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $2.99 in 2011 to an estimated $4.01 for 2015. This level of demonstrated growth is in line with the market’s implied estimate for earnings growth of 4.81% over the next 7-10 years. The ModernGraham valuation model, therefore, returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating Du Pont is fairly valued at the present time.

Disclaimer: The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours. Logos taken from either the company website or Wikipedia; this article is not affiliated with the companies in any manner.

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E. I. Du Pont de Nemours and Co. Quarterly Valuation – February 2015 $DD

500px-DuPont.svg

E. I. Du Pont De Nemours should satisfy the Enterprising Investor, but not the Defensive Investor. The Defensive Investor is concerned with the low current ratio and the high PB ratio, while the Enterprising Investor has no initial concerns. Therefore, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

From a valuation side of things, the company has grown its EPSmg (normalized earnings) from $2.70 in 2010 to $3.99 for 2014. This is a strong and impressive level of demonstrated growth, which is in line with the market’s implied estimate for earnings growth of 5.3% over the next 7-10 years. The ModernGraham valuation model, therefore, returns an estimate of intrinsic value falling within a margin of safety relative to the current price, indicating the company is fairly valued at the present time.

Be sure to check out previous ModernGraham valuations of E. I. Du Pont de Nemours and Co. (DD) for greater perspective!

Read the full valuation on Seeking Alpha!

DD Chart

DD data by YCharts

Disclaimer:  The author did not hold a position in E. I. Du Pont de Nemours and Co. (DD) 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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