Sierra Wireless Inc Valuation – September 2018 $TSE:SW

Company Profile (excerpt from Reuters): Sierra Wireless, Inc., incorporated on May 31, 1993, is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s segments include OEM Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The Company offers a portfolio of second generation (2G), third generation (3G), and fourth generation (4G) cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises. The markets for its products are North America, Europe and Asia Pacific. Its OEM Solution segment is engaged in cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. Its Enterprise Solution segment is engaged in intelligent routers and gateways, including management tools and applications that enable cellular connectivity. Its Cloud and Connectivity Services segment is engaged in a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments.

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SW – September 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 $687,068,923 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.61 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 -172.13% Fail
6. Moderate PEmg Ratio PEmg < 20 47.31 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.51 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 1.61 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.33 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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.52
MG Growth Estimate 9.51%
MG Value $14.31
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $7.54
MG Value based on 0% Growth $4.42
Market Implied Growth Rate 19.40%
Current Price $24.61
% of Intrinsic Value 171.95%

Sierra Wireless, Inc. (USA) 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 or growth over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $0.32 in 2014 to an estimated $0.52 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 19.4% 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 Sierra Wireless, Inc. (USA) revealed the company was trading above its Graham Number of $21.29. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 47.31, which was above the industry average of 43.01. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.63.

Sierra Wireless, Inc. (USA) scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $2.63
Graham Number $21.29
PEmg 47.31
Current Ratio 1.61
PB Ratio 1.51
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
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Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $408,261,000
Total Current Liabilities $253,760,000
Long-Term Debt $50,659,000
Total Assets $900,606,000
Intangible Assets $406,206,000
Total Liabilities $313,381,000
Shares Outstanding (Diluted Average) 36,021,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.21
Dec2017 $0.17
Dec2016 $0.64
Dec2015 -$0.11
Dec2014 -$0.61
Dec2013 $1.90
Dec2012 $0.87
Dec2011 -$0.96
Dec2010 -$0.47
Dec2009 -$1.36
Dec2008 $2.47
Dec2007 $1.16
Dec2006 $0.44
Dec2005 -$1.67
Dec2004 $1.17
Dec2003 $0.16
Dec2002 -$3.99
Dec2001 -$2.37
Dec2000 -$0.30
Dec1999 $0.34
Dec1998 $0.15

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.52
Dec2017 $0.25
Dec2016 $0.37
Dec2015 $0.23
Dec2014 $0.32
Dec2013 $0.52
Dec2012 -$0.08
Dec2011 -$0.31
Dec2010 $0.16
Dec2009 $0.38
Dec2008 $1.07
Dec2007 $0.34
Dec2006 -$0.31
Dec2005 -$0.90
Dec2004 -$0.70
Dec2003 -$1.50
Dec2002 -$1.97

Recommended Reading:

Other ModernGraham posts about the company

Sierra Wireless Inc Valuation – Initial Coverage $TSE:SW

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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.

Sierra Wireless Inc Valuation – Initial Coverage $TSE:SW

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 Sierra Wireless Inc (TSE:SW) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Sierra Wireless, Inc. offers second generation (2G), third generation (3G) and fourth generation (4G) cellular embedded wireless modules and gateways. The Company offers products to original equipment manufacturers (OEMs) and enterprises. It operates through three segments: OEM Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment includes cellular embedded modules, software and tools for OEM customers. The Enterprise Solutions segment includes gateways and management tools and applications that enable cellular connectivity for mobile, industrial and enterprise customers. The Cloud and Connectivity Services segment comprises three areas of operation: its cloud services business; its connectivity services, and its managed wireless broadband services business. The Company’s products and solutions include Legato, Project MangOH, AirLink, AirLink Raven RV50, IoT Acceleration Platform and AirVantage Management Service.

SW Chart

SW data by YCharts

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Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SW – 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 $1,186,497,752 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 158.68% Pass
6. Moderate PEmg Ratio PEmg < 20 65.62 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.48 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 1.70 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 Pass

Stage 2: Determination of Intrinsic Value

EPSmg $0.56
MG Growth Estimate 1.21%
MG Value $6.16
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $8.18
MG Value based on 0% Growth $4.80
Market Implied Growth Rate 28.56%
Current Price $37.02
% of Intrinsic Value 601.32%

Sierra Wireless, 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 PEmg ratio. The Enterprising Investor has concerns regarding the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $0.52 in 2013 to an estimated $0.56 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 28.56% 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 Sierra Wireless, Inc. revealed the company was trading above its Graham Number of $19.44. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 65.62, which was below the industry average of 68.5, 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 $3.18.

Sierra Wireless, 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) $3.18
Graham Number $19.44
PEmg 65.62
Current Ratio 1.70
PB Ratio 2.48
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 12/1/2016
Total Current Assets $392,174,000
Total Current Liabilities $230,443,000
Long-Term Debt $0
Total Assets $771,587,000
Intangible Assets $305,425,000
Total Liabilities $289,282,000
Shares Outstanding (Diluted Average) 32,367,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.11
Dec2016 $0.64
Dec2015 -$0.11
Dec2014 -$0.61
Dec2013 $1.90
Dec2012 $0.87
Dec2011 -$0.96
Dec2010 -$0.47
Dec2009 -$1.36
Dec2008 $2.47
Dec2007 $1.16
Dec2006 $0.44
Dec2005 -$1.67
Dec2004 $1.17
Dec2003 $0.16
Dec2002 -$3.99
Dec2001 -$2.37
Dec2000 -$0.30
Dec1999 $0.34
Dec1998 $0.15

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.56
Dec2016 $0.37
Dec2015 $0.23
Dec2014 $0.32
Dec2013 $0.52
Dec2012 -$0.08
Dec2011 -$0.31
Dec2010 $0.16
Dec2009 $0.38
Dec2008 $1.07
Dec2007 $0.34
Dec2006 -$0.31
Dec2005 -$0.90
Dec2004 -$0.70
Dec2003 -$1.50
Dec2002 -$1.97
Dec2001 -$0.78

Recommended Reading:

Other ModernGraham posts about the company

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

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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.

American Tower Corp Valuation – March 2019 #AMT

Company Profile (excerpt from Reuters): American Tower Corporation (ATC), incorporated on September 24, 1996, is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. Its segments include U.S. property; Asia property; Europe, Middle East and Africa (EMEA) property; Latin America property, and Services. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment includes tower-related services in the United States, including site acquisition, zoning and permitting and structural analysis, which primarily supports its site leasing business, including the addition of tenants and equipment on its sites.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of AMT – 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 $83,140,713,988 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.51 Fail
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 149.29% Pass
6. Moderate PEmg Ratio PEmg < 20 68.93 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 14.20 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 0.51 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.99 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 $2.73
MG Growth Estimate 11.31%
MG Value $85.09
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $39.64
MG Value based on 0% Growth $23.24
Market Implied Growth Rate 30.22%
Current Price $188.48
% of Intrinsic Value 221.51%

American Tower Corp 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, poor dividend history, and the high PEmg and PB ratios. 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 explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.56 in 2015 to an estimated $2.73 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 30.22% 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 American Tower Corp revealed the company was trading above its Graham Number of $30.04. The company pays a dividend of $3.15 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 68.94, which was below the industry average of 93.05, 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 $-55.63.

American Tower Corp 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) -$55.63
Graham Number $30.04
PEmg 68.94
Current Ratio 0.51
PB Ratio 14.20
Current Dividend $3.15
Dividend Yield 1.67%
Number of Consecutive Years of Dividend Growth 7

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 12/1/2018
Total Current Assets $2,385,100,000
Total Current Liabilities $4,689,900,000
Long-Term Debt $18,405,100,000
Total Assets $33,010,400,000
Intangible Assets $16,676,200,000
Total Liabilities $27,110,800,000
Shares Outstanding (Diluted Average) 444,436,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.31
Dec2018 $2.77
Dec2017 $2.67
Dec2016 $1.98
Dec2015 $1.41
Dec2014 $2.00
Dec2013 $1.38
Dec2012 $1.60
Dec2011 $0.99
Dec2010 $0.92
Dec2009 $0.61
Dec2008 $0.84
Dec2007 $0.13
Dec2006 $0.06
Dec2005 -$0.60
Dec2004 -$1.10
Dec2003 -$1.56
Dec2002 -$5.95
Dec2001 -$2.35
Dec2000 -$1.15
Dec1999 -$0.34

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.73
Dec2018 $2.35
Dec2017 $2.06
Dec2016 $1.73
Dec2015 $1.56
Dec2014 $1.55
Dec2013 $1.25
Dec2012 $1.12
Dec2011 $0.82
Dec2010 $0.66
Dec2009 $0.42
Dec2008 $0.17
Dec2007 -$0.31
Dec2006 -$0.97
Dec2005 -$1.76
Dec2004 -$2.36
Dec2003 -$2.75

Recommended Reading:

Other ModernGraham posts about the company

American Tower Corp Valuation – June 2018 $AMT
American Tower Corp Valuation – February 2017 $AMT
American Tower Corp Valuation – November 2015 Update $AMT
26 Companies in the Spotlight This Week – 11/22/14
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Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW

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.

Charter Communications Inc Valuation – February 2019 $CHTR

Company Profile (excerpt from Reuters): Charter Communications, Inc., incorporated on July 9, 2003, is a holding company. The Company is a cable operator in the United States and a broadband communications services company. The Company operates in cable services segment. As of December 31, 2016, the Company was engaged in providing video, Internet and voice services to approximately 26.2 million residential and business customers. In addition, it sells video and online advertising inventory to local, regional and national advertising customers and fiber-delivered communications and managed information technology (IT) solutions to enterprise customers. The Company also owns and operates regional sports networks and local sports, news and lifestyle channels and sells security and home management services to the residential marketplace.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CHTR – February 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 $78,923,408,111 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.23 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 -562.00% Fail
6. Moderate PEmg Ratio PEmg < 20 30.26 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.82 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 0.23 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.43 Fail
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $11.58
MG Growth Estimate 15.00%
MG Value $445.83
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $167.91
MG Value based on 0% Growth $98.43
Market Implied Growth Rate 10.88%
Current Price $350.44
% of Intrinsic Value 78.60%

Charter Communications Inc 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 or growth over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability 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 Fairly Valued after growing its EPSmg (normalized earnings) from $-2.46 in 2015 to an estimated $11.58 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 10.88% 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 Charter Communications Inc revealed the company was trading above its Graham Number of $124.38. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 30.26, which was below the industry average of 92.4, 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 $-430.86.

Charter Communications 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) -$430.86
Graham Number $124.38
PEmg 30.26
Current Ratio 0.23
PB Ratio 1.82
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 12/1/2018
Total Current Assets $2,730,000,000
Total Current Liabilities $12,095,000,000
Long-Term Debt $69,537,000,000
Total Assets $146,130,000,000
Intangible Assets $106,914,000,000
Total Liabilities $101,858,000,000
Shares Outstanding (Diluted Average) 230,069,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.27
Dec2018 $5.22
Dec2017 $34.09
Dec2016 $15.94
Dec2015 -$2.68
Dec2014 -$1.88
Dec2013 -$1.83
Dec2012 -$3.37
Dec2011 -$3.75
Dec2010 -$2.31
Dec2009 $0.00
Dec2008 -$7.26
Dec2007 -$4.61
Dec2006 -$4.57
Dec2005 -$3.46
Dec2004 -$16.00
Dec2003 -$0.91
Dec2002 -$9.46
Dec2001 -$4.79
Dec2000 -$4.20
Dec1999 -$2.46

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $11.58
Dec2018 $13.54
Dec2017 $14.71
Dec2016 $3.75
Dec2015 -$2.46
Dec2014 -$2.44
Dec2013 -$2.57
Dec2012 -$3.07
Dec2011 -$3.14
Dec2010 -$3.14
Dec2009 -$3.70
Dec2008 -$6.09
Dec2007 -$5.64
Dec2006 -$6.40
Dec2005 -$7.18
Dec2004 -$8.39
Dec2003 -$4.51

Recommended Reading:

Other ModernGraham posts about the company

Charter Communications Inc Valuation – May 2018 $CHTR
Charter Communications Inc Valuation – Initial Coverage $CHTR

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Verizon Communications Inc Valuation – November 2018 $VZ
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Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR

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.

DISH Network Corp Valuation – February 2019 $DISH

Company Profile (excerpt from Reuters): DISH Network Corporation, incorporated on April 26, 1995, is a holding company. The Company operates through two segments: Pay-TV and Broadband, and Wireless. The Company offers pay-TV services under the DISH brand and the Sling brand (collectively Pay-TV services).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of DISH – February 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 $14,577,441,883 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.62 Fail
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 44.08% Pass
6. Moderate PEmg Ratio PEmg < 20 10.25 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.99 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 0.62 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.50 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 $3.04
MG Growth Estimate 7.48%
MG Value $71.35
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $44.11
MG Value based on 0% Growth $25.86
Market Implied Growth Rate 0.87%
Current Price $31.17
% of Intrinsic Value 43.68%

DISH Network Corp 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, poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the 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 $2.03 in 2014 to an estimated $3.04 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.87% 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 DISH Network Corp revealed the company was trading above its Graham Number of $31.04. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 10.25, which was below the industry average of 92.4, 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 $-35.85.

DISH Network 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) -$35.85
Graham Number $31.04
PEmg 10.25
Current Ratio 0.62
PB Ratio 1.99
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 9/1/2018
Total Current Assets $3,038,909,000
Total Current Liabilities $4,877,597,000
Long-Term Debt $13,790,114,000
Total Assets $30,137,410,000
Intangible Assets $24,487,077,000
Total Liabilities $21,894,372,000
Shares Outstanding (Diluted Average) 525,995,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.88
Dec2017 $4.07
Dec2016 $3.15
Dec2015 $1.73
Dec2014 $2.04
Dec2013 $1.76
Dec2012 $1.41
Dec2011 $3.39
Dec2010 $2.20
Dec2009 $1.42
Dec2008 $1.98
Dec2007 $1.68
Dec2006 $1.37
Dec2005 $3.22
Dec2004 $0.46
Dec2003 $0.46
Dec2002 -$0.86
Dec2001 -$0.45
Dec2000 -$1.38
Dec1999 -$1.92
Dec1998 -$0.82

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.04
Dec2017 $2.93
Dec2016 $2.25
Dec2015 $1.89
Dec2014 $2.03
Dec2013 $2.03
Dec2012 $2.14
Dec2011 $2.38
Dec2010 $1.82
Dec2009 $1.73
Dec2008 $1.84
Dec2007 $1.66
Dec2006 $1.41
Dec2005 $1.14
Dec2004 -$0.05
Dec2003 -$0.48
Dec2002 -$0.99

Recommended Reading:

Other ModernGraham posts about the company

DISH Network Corp Valuation – Initial Coverage $DISH

Other ModernGraham posts about related companies

AT&T Inc Valuation – January 2019 $T
Juniper Networks Inc Valuation – January 2019 $JNPR
SBA Communications Corp Valuation – January 2019 $SBAC
Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL

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.

AT&T Inc Valuation – January 2019 $T

Company Profile (excerpt from Reuters): AT&T Inc., incorporated October 5, 1983, is a holding company. The Company and its subsidiaries provide communications and digital entertainment services in the United States and the world. The Company operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The Company offers its services and products to consumers in the United States, Mexico and Latin America and to businesses and other providers of telecommunications services worldwide. The Company also owns and operates three regional Television sports networks, and retains non-controlling interests in another regional sports network and a network dedicated to game-related programming, as well as Internet interactive game playing. The services and products offered by the Company vary by market, and include wireless communications, data/broadband and Internet services, digital video services, local and long-distance telephone services, telecommunications equipment, managed networking, and wholesale services. Its subsidiaries include AT&T Mobility and SKY Brasil Servicos Ltda.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of T – 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 $213,063,447,223 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.81 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 61.55% Pass
6. Moderate PEmg Ratio PEmg < 20 9.56 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.16 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 0.81 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -13.69 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 $3.06
MG Growth Estimate 9.37%
MG Value $83.46
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $44.44
MG Value based on 0% Growth $26.05
Market Implied Growth Rate 0.53%
Current Price $29.29
% of Intrinsic Value 35.10%

AT&T Inc. 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 $1.89 in 2014 to an estimated $3.06 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.53% 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 AT&T Inc. revealed the company was trading below its Graham Number of $38.89. The company pays a dividend of $1.97 per share, for a yield of 6.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 9.56, which was below the industry average of 25.67, 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 $-40.55.

AT&T Inc. fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$40.55
Graham Number $38.89
PEmg 9.56
Current Ratio 0.81
PB Ratio 1.16
Current Dividend $1.97
Dividend Yield 6.73%
Number of Consecutive Years of Dividend Growth 14

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 $53,107,000,000
Total Current Liabilities $65,420,000,000
Long-Term Debt $168,513,000,000
Total Assets $534,870,000,000
Intangible Assets $312,576,000,000
Total Liabilities $349,899,000,000
Shares Outstanding (Diluted Average) 7,320,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.93
Dec2017 $4.76
Dec2016 $2.10
Dec2015 $2.37
Dec2014 $1.24
Dec2013 $3.42
Dec2012 $1.25
Dec2011 $0.66
Dec2010 $3.35
Dec2009 $2.05
Dec2008 $2.16
Dec2007 $1.94
Dec2006 $1.89
Dec2005 $1.42
Dec2004 $1.77
Dec2003 $2.56
Dec2002 $1.69
Dec2001 $2.07
Dec2000 $2.24
Dec1999 $2.36
Dec1998 $2.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.06
Dec2017 $3.01
Dec2016 $2.12
Dec2015 $2.02
Dec2014 $1.89
Dec2013 $2.19
Dec2012 $1.68
Dec2011 $1.94
Dec2010 $2.48
Dec2009 $1.99
Dec2008 $1.92
Dec2007 $1.84
Dec2006 $1.82
Dec2005 $1.82
Dec2004 $2.04
Dec2003 $2.17
Dec2002 $2.03

Recommended Reading:

Other ModernGraham posts about the company

10 Low PE Stock Picks for the Defensive Investor – August 2018
5 Undervalued Companies for the Defensive Investor Near 52 Week Lows – August 2018
10 Undervalued Companies for the Defensive Dividend Stock Investor – July 2018
Best Stocks Below Their Graham Number – June 2018
10 Low PE Stock Picks for the Defensive Investor – June 2018

Other ModernGraham posts about related companies

Juniper Networks Inc Valuation – January 2019 $JNPR
SBA Communications Corp Valuation – January 2019 $SBAC
Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL

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.

Juniper Networks Inc Valuation – January 2019 $JNPR

Company Profile (excerpt from Reuters): Juniper Networks, Inc. (Juniper Networks), incorporated on September 10, 1997, designs, develops and sells products and services for high-performance networks to enable customers to build networks for their businesses. The Company sells its products in over 100 countries in three geographic regions: Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific (APAC). The Company sells its high-performance network products and service offerings across routing, switching and security. Its products address network requirements for global service providers, cloud providers, national governments, research and public sector organizations, and other enterprises. The Company offers its customers various services, including technical support, professional services, education and training programs.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JNPR – 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 $9,709,181,730 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.47 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 82.41% Pass
6. Moderate PEmg Ratio PEmg < 20 23.07 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.12 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 2.47 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.70 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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.22
MG Growth Estimate 15.00%
MG Value $46.94
Opinion Undervalued
MG Grade B-
MG Value based on 3% Growth $17.68
MG Value based on 0% Growth $10.36
Market Implied Growth Rate 7.28%
Current Price $28.13
% of Intrinsic Value 59.92%

Juniper Networks, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor is only concerned with the lack of earnings stability over the last five years. 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 Undervalued after growing its EPSmg (normalized earnings) from $0.24 in 2014 to an estimated $1.22 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 7.28% 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 above the price.

At the time of valuation, further research into Juniper Networks, Inc. revealed the company was trading above its Graham Number of $21.54. The company pays a dividend of $0.4 per share, for a yield of 1.4% Its PEmg (price over earnings per share – ModernGraham) was 23.07, which was below the industry average of 25.67, 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 $-0.45.

Juniper Networks, Inc. performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$0.45
Graham Number $21.54
PEmg 23.07
Current Ratio 2.47
PB Ratio 2.12
Current Dividend $0.40
Dividend Yield 1.42%
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 $4,290,700,000
Total Current Liabilities $1,740,500,000
Long-Term Debt $1,788,600,000
Total Assets $9,100,300,000
Intangible Assets $3,209,300,000
Total Liabilities $4,449,400,000
Shares Outstanding (Diluted Average) 350,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.61
Dec2017 $0.80
Dec2016 $1.53
Dec2015 $1.59
Dec2014 -$0.73
Dec2013 $0.86
Dec2012 $0.35
Dec2011 $0.79
Dec2010 $1.15
Dec2009 $0.22
Dec2008 $0.93
Dec2007 $0.62
Dec2006 -$1.76
Dec2005 $0.58
Dec2004 $0.24
Dec2003 $0.07
Dec2002 -$0.34
Dec2001 -$0.04
Dec2000 $0.43
Dec1999 -$0.01
Dec1998 -$0.13

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.22
Dec2017 $0.95
Dec2016 $0.93
Dec2015 $0.61
Dec2014 $0.24
Dec2013 $0.71
Dec2012 $0.65
Dec2011 $0.78
Dec2010 $0.59
Dec2009 $0.25
Dec2008 $0.22
Dec2007 -$0.11
Dec2006 -$0.40
Dec2005 $0.22
Dec2004 $0.05
Dec2003 -$0.02
Dec2002 -$0.05

Recommended Reading:

Other ModernGraham posts about the company

5 Companies for Enterprising Investors Near 52 Week Lows – April 2018
Juniper Networks Inc Valuation – March 2018 $JNPR
Juniper Networks Inc Valuation – June 2016 $JNPR
34 Companies in the Spotlight This Week – 2/7/15
Juniper Networks Inc. Annual Valuation – 2015 $JNPR

Other ModernGraham posts about related companies

SBA Communications Corp Valuation – January 2019 $SBAC
Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL
Shaw Communications Inc Valuation – July 2018 $TSE:SJR.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.

SBA Communications Corp Valuation – January 2019 $SBAC

Company Profile (excerpt from Reuters): SBA Communications Corporation, incorporated on December 23, 1996, is an independent owner and operator of wireless communications tower structures, rooftops and other structures that support antennas used for wireless communications. The Company’s operating segments include site leasing and site development. The site leasing business includes segments, domestic site leasing and international site leasing. The Company’s primary business line is its site leasing business. In its site leasing business, the Company leases antenna space to wireless service providers on towers that it owns or operates, and manages rooftop and tower sites for property owners under various contractual arrangements. The Company owns approximately 25,460 towers. The Company also manages or leases approximately 5,500 actual or potential towers. The Company’s other business line is its site development business, through which it assists wireless service providers in developing and maintaining their own wireless service networks. The Company’s principal operations are in the United States and its territories. In addition, it owns and operates towers in Canada, Central America and South America.

Downloadable PDF version of this valuation:

ModernGraham Valuation of SBAC – 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 $18,326,242,846 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.23 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 -138.56% Fail
6. Moderate PEmg Ratio PEmg < 20 895.24 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -6.04 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 1.23 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 156.23 Fail
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 Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.18
MG Growth Estimate 15.00%
MG Value $7.03
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $2.65
MG Value based on 0% Growth $1.55
Market Implied Growth Rate 443.37%
Current Price $163.53
% of Intrinsic Value 2325.29%

SBA Communications Corporation 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 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 level of debt relative to the current assets, and the lack of earnings stability 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 growing its EPSmg (normalized earnings) from $-0.75 in 2014 to an estimated $0.18 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 443.37% 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 SBA Communications Corporation revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 895.24, which was above the industry average of 25.67. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-86.39.

SBA Communications Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$86.39
Graham Number $0.00
PEmg 895.24
Current Ratio 1.23
PB Ratio -6.04
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 9/1/2018
Total Current Assets $327,663,000
Total Current Liabilities $265,512,000
Long-Term Debt $9,710,145,000
Total Assets $7,213,823,000
Intangible Assets $3,387,955,000
Total Liabilities $10,358,906,000
Shares Outstanding (Diluted Average) 116,114,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.08
Dec2017 $0.86
Dec2016 $0.61
Dec2015 -$1.37
Dec2014 -$0.19
Dec2013 -$0.44
Dec2012 -$1.51
Dec2011 -$1.14
Dec2010 -$1.68
Dec2009 -$1.20
Dec2008 -$0.61
Dec2007 -$0.74
Dec2006 -$1.36
Dec2005 -$1.28
Dec2004 -$2.52
Dec2003 -$3.36
Dec2002 -$5.29
Dec2001 -$2.99
Dec2000 -$0.70
Dec1999 -$1.77
Dec1998 -$2.64

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.18
Dec2017 $0.12
Dec2016 -$0.36
Dec2015 -$0.87
Dec2014 -$0.75
Dec2013 -$1.08
Dec2012 -$1.34
Dec2011 -$1.20
Dec2010 -$1.19
Dec2009 -$0.98
Dec2008 -$1.01
Dec2007 -$1.43
Dec2006 -$2.10
Dec2005 -$2.68
Dec2004 -$3.24
Dec2003 -$3.34
Dec2002 -$3.11

Recommended Reading:

Other ModernGraham posts about the company

SBA Communications Corp Valuation – Initial Coverage $SBAC

Other ModernGraham posts about related companies

Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL
Shaw Communications Inc Valuation – July 2018 $TSE:SJR.B
ARRIS International PLC Valuation – July 2018 $ARRS

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.

Harris Corp Valuation – December 2018 $HRS

Company Profile (excerpt from Reuters): Harris Corporation, incorporated on December 6, 1926, is a technology company that provides products, systems and services that have defense and civil government applications, as well as commercial applications. The Company offers its products and services to government and commercial customer. The Company operates in four segments: Communication Systems, which serves markets in tactical communications and defense, and public safety networks; Space and Intelligence Systems, which provides complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; Electronic Systems, which offers a portfolio of solutions in electronic warfare, avionics, wireless technology, command, control, communications, computers and intelligence (C4I) and undersea systems, and Critical Networks, which provides managed services supporting air traffic management, energy and maritime communications, and ground network operation and sustainment, as well as information technology (IT) and engineering services.

HRS Chart

HRS data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of HRS – December 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 $16,342,125,676 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.17 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 99.89% Pass
6. Moderate PEmg Ratio PEmg < 20 24.58 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.17 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 1.17 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 10.27 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 $5.66
MG Growth Estimate 14.26%
MG Value $209.33
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $82.01
MG Value based on 0% Growth $48.08
Market Implied Growth Rate 8.04%
Current Price $139.04
% of Intrinsic Value 66.42%

Harris Corporation 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, high PEmg and PB ratios. 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 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 $2.9 in 2015 to an estimated $5.66 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 8.04% 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 Harris Corporation revealed the company was trading above its Graham Number of $70.7. The company pays a dividend of $2.28 per share, for a yield of 1.6% Its PEmg (price over earnings per share – ModernGraham) was 24.58, which was below the industry average of 30.21, 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 $-36.13.

Harris Corporation receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$36.13
Graham Number $70.70
PEmg 24.58
Current Ratio 1.17
PB Ratio 5.17
Current Dividend $2.28
Dividend Yield 1.64%
Number of Consecutive Years of Dividend Growth 17

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 $2,288,000,000
Total Current Liabilities $1,956,000,000
Long-Term Debt $3,410,000,000
Total Assets $9,889,000,000
Intangible Assets $6,333,000,000
Total Liabilities $6,645,000,000
Shares Outstanding (Diluted Average) 120,600,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.91
Jun2018 $5.92
Jun2017 $4.44
Jun2016 $2.59
Jun2015 $3.11
Jun2014 $4.95
Jun2013 $1.01
Jun2012 $0.26
Jun2011 $4.60
Jun2010 $4.28
Jun2009 $0.28
Jun2008 $3.26
Jun2007 $3.43
Jun2006 $1.71
Jun2005 $1.46
Jun2004 $0.97
Jun2003 $0.45
Jun2002 $0.62
Jun2001 $0.16
Jun2000 $0.13
Jun1999 $0.34

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.66
Jun2018 $4.42
Jun2017 $3.52
Jun2016 $2.83
Jun2015 $2.90
Jun2014 $2.87
Jun2013 $1.92
Jun2012 $2.42
Jun2011 $3.39
Jun2010 $2.72
Jun2009 $1.97
Jun2008 $2.60
Jun2007 $2.05
Jun2006 $1.25
Jun2005 $0.93
Jun2004 $0.60
Jun2003 $0.39

Recommended Reading:

Other ModernGraham posts about the company

Harris Corporation Valuation – February 2018 $HRS
Harris Corporation Valuation – February 2016 $HRS
10 Best Stocks For Value Investors This Week – 9/26/15
Harris Corporation Analysis – September 2015 Update $HRS
Harris Corporation Analysis – June 2015 Update $HRS

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Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL
Shaw Communications Inc Valuation – July 2018 $TSE:SJR.B
ARRIS International PLC Valuation – July 2018 $ARRS
Iridium Communications Inc Valuation – July 2018 $IRDM
CenturyLink Inc Valuation – June 2018 $CTL

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.

Verizon Communications Inc Valuation – November 2018 $VZ

Company Profile (excerpt from Reuters): Verizon Communications Inc., incorporated on October 7, 1983, is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc, a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance and Yahoo Mail.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of VZ – November 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 $248,416,727,707 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.97 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 335.73% Pass
6. Moderate PEmg Ratio PEmg < 20 12.36 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.44 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 0.97 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -105.07 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 $4.87
MG Growth Estimate 15.00%
MG Value $187.32
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $70.55
MG Value based on 0% Growth $41.36
Market Implied Growth Rate 1.93%
Current Price $60.15
% of Intrinsic Value 32.11%

Verizon Communications Inc. 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, high PB 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 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 $2.11 in 2014 to an estimated $4.87 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.93% 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 Verizon Communications Inc. revealed the company was trading above its Graham Number of $32.89. The company pays a dividend of $2.34 per share, for a yield of 3.9%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 12.36, which was below the industry average of 30.21, 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 $-42.59.

Verizon Communications 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) -$42.59
Graham Number $32.89
PEmg 12.36
Current Ratio 0.97
PB Ratio 4.44
Current Dividend $2.34
Dividend Yield 3.88%
Number of Consecutive Years of Dividend Growth 11

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 $33,154,000,000
Total Current Liabilities $34,167,000,000
Long-Term Debt $106,440,000,000
Total Assets $265,562,000,000
Intangible Assets $132,937,000,000
Total Liabilities $209,475,000,000
Shares Outstanding (Diluted Average) 4,140,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.55
Dec2017 $7.36
Dec2016 $3.21
Dec2015 $4.37
Dec2014 $2.42
Dec2013 $4.00
Dec2012 $0.31
Dec2011 $0.85
Dec2010 $0.90
Dec2009 $1.72
Dec2008 -$0.77
Dec2007 $1.90
Dec2006 $2.12
Dec2005 $2.65
Dec2004 $2.79
Dec2003 $1.12
Dec2002 $1.49
Dec2001 $0.14
Dec2000 $4.31
Dec1999 $2.97
Dec1998 $1.86

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.87
Dec2017 $4.77
Dec2016 $3.27
Dec2015 $3.00
Dec2014 $2.11
Dec2013 $1.82
Dec2012 $0.69
Dec2011 $0.89
Dec2010 $1.00
Dec2009 $1.21
Dec2008 $1.21
Dec2007 $2.18
Dec2006 $2.22
Dec2005 $2.06
Dec2004 $1.83
Dec2003 $1.57
Dec2002 $1.92

Recommended Reading:

Other ModernGraham posts about the company

10 Undervalued Companies for the Defensive Dividend Stock Investor – July 2018
10 Low PE Stock Picks for the Defensive Investor – June 2018
10 Undervalued Companies for the Defensive Dividend Stock Investor – June 2018
10 Undervalued Companies for the Defensive Investor – June 2018
5 Undervalued Companies for Value Investors with a Low Beta – May 2018

Other ModernGraham posts about related companies

Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL
Shaw Communications Inc Valuation – July 2018 $TSE:SJR.B
ARRIS International PLC Valuation – July 2018 $ARRS
Iridium Communications Inc Valuation – July 2018 $IRDM
CenturyLink Inc Valuation – June 2018 $CTL

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.

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