E.W. Scripps Co Valuation – Initial Coverage $SSP

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 E.W. Scripps Co (SSP) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The E. W. Scripps Company is a media enterprise with interests in television and radio broadcasting, as well as local and national digital media brands. The Company operates through segments, including television, radio, digital, and syndication and other. It serves audiences and businesses through a portfolio of television, radio and digital media brands. Its Television segment includes approximately 10 American Broadcasting Company affiliates, over five National Broadcasting Company affiliates, two FOX affiliates, two Columbia Broadcasting System affiliates and four non big-four affiliated stations. Its radio segment has approximately 30 radio stations in over eight markets. The Company operates over 30 frequency modulation (FM) stations and six Amplitude Modulation (AM) stations. Its digital segment includes the digital operations of its local television and radio businesses. Syndication and other includes the syndication of news features and comics for the newspaper industry.

SSP Chart

SSP data by YCharts

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.

[otw_shortcode_button href=”https://www.moderngraham.com/moderngraham-stocks-screens/” size=”medium” icon_position=”left” shape=”square”]Learn More About Premium Membership[/otw_shortcode_button]


Downloadable PDF version of this valuation:

ModernGraham Valuation of SSP – 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 $1,752,472,073 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.73 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 -98.82% Fail
6. Moderate PEmg Ratio PEmg < 20 511.21 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.90 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.73 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.09 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 $0.04
MG Growth Estimate 15.00%
MG Value $1.59
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $0.60
MG Value based on 0% Growth $0.35
Market Implied Growth Rate 251.35%
Current Price $21.13
% of Intrinsic Value 1327.82%

E. W. Scripps Co 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 or growth over the last ten years, the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net 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 $-0.54 in 2012 to an estimated $0.04 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 251.35% 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 E. W. Scripps Co revealed the company was trading above its Graham Number of $13.55. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 511.21, which was above the industry average of 39.27. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-5.58.

E. W. Scripps Co 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) -$5.58
Graham Number $13.55
PEmg 511.21
Current Ratio 2.73
PB Ratio 1.90
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 9/1/2016
Total Current Assets $292,214,000
Total Current Liabilities $106,904,000
Long-Term Debt $387,339,000
Total Assets $1,684,874,000
Intangible Assets $1,090,369,000
Total Liabilities $758,401,000
Shares Outstanding (Diluted Average) 83,518,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.73
Dec2015 -$1.06
Dec2014 $0.18
Dec2013 -$0.01
Dec2012 $0.69
Dec2011 -$0.27
Dec2010 $2.03
Dec2009 -$3.89
Dec2008 -$8.81
Dec2007 -$0.03
Dec2006 $6.42
Dec2005 $4.53
Dec2004 $5.88
Dec2003 $5.25
Dec2002 $3.48
Dec2001 $2.60
Dec2000 $3.06
Dec1999 $2.73
Dec1998 $2.37
Dec1997 $2.90
Dec1996 $2.93

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.04
Dec2015 -$0.23
Dec2014 $0.29
Dec2013 $0.14
Dec2012 -$0.54
Dec2011 -$1.50
Dec2010 -$1.70
Dec2009 -$2.49
Dec2008 -$0.66
Dec2007 $3.74
Dec2006 $5.46
Dec2005 $4.77
Dec2004 $4.61
Dec2003 $3.79
Dec2002 $2.99
Dec2001 $2.74
Dec2000 $2.80

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

News Corp Valuation – February 2017 $NWSA
Cinemark Holdings Inc Valuation – Initial Coverage $CNK
International Speedway Corp Valuation – Initial Coverage $ISCA
Corus Entertainment Inc Valuation – Initial Coverage $TSE:CJR.B
AMC Networks Inc Valuation – December 2016 $AMCX
Charter Communications Inc Valuation – Initial Coverage $CHTR
Cineplex Inc Valuation – Initial Coverage $TSE:CGX
Twenty-First Century Fox Inc Valuation – November 2016 $FOXA
Graham Holdings Co Valuation – August 2016 $GHC
CBS Corporation Valuation – August 2016 $CBS


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.






Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.