www.

Mondelez International Inc Valuation – March 2019 #MDLZ

Company Profile (excerpt from Reuters): Mondelez International, Inc., incorporated on January 10, 2005, is a snack company. The Company manufactures and markets snack food and beverage products for consumers. The Company operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories, including Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. The Company’s portfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MDLZ – 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 $71,479,143,112 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.45 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 7.34% Fail
6. Moderate PEmg Ratio PEmg < 20 22.20 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.83 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 0.45 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.37 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.23
MG Growth Estimate -2.26%
MG Value $8.89
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $32.33
MG Value based on 0% Growth $18.95
Market Implied Growth Rate 6.85%
Current Price $49.50
% of Intrinsic Value 556.80%

MONDELEZ INTERNATIONAL INC Common Stock does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, 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 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 $2.62 in 2015 to an estimated $2.23 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.85% 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 MONDELEZ INTERNATIONAL INC Common Stock revealed the company was trading above its Graham Number of $31.21. The company pays a dividend of $0.96 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 22.2, which was below the industry average of 26.89, 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 $-19.99.

MONDELEZ INTERNATIONAL INC Common Stock 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) -$19.99
Graham Number $31.21
PEmg 22.20
Current Ratio 0.45
PB Ratio 2.83
Current Dividend $0.96
Dividend Yield 1.94%
Number of Consecutive Years of Dividend Growth 5

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 $7,604,000,000
Total Current Liabilities $16,737,000,000
Long-Term Debt $12,532,000,000
Total Assets $62,729,000,000
Intangible Assets $38,727,000,000
Total Liabilities $37,016,000,000
Shares Outstanding (Diluted Average) 1,471,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.45
Dec2018 $2.28
Dec2017 $1.85
Dec2016 $1.04
Dec2015 $4.44
Dec2014 $1.28
Dec2013 $2.19
Dec2012 $1.73
Dec2011 $2.01
Dec2010 $2.39
Dec2009 $2.03
Dec2008 $1.90
Dec2007 $1.62
Dec2006 $1.85
Dec2005 $1.55
Dec2004 $1.55
Dec2003 $2.01
Dec2002 $1.96
Dec2001 $1.17
Dec2000 $1.38
Dec1999 $1.20

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.23
Dec2018 $2.14
Dec2017 $2.10
Dec2016 $2.19
Dec2015 $2.62
Dec2014 $1.78
Dec2013 $2.05
Dec2012 $1.99
Dec2011 $2.07
Dec2010 $2.06
Dec2009 $1.86
Dec2008 $1.75
Dec2007 $1.68
Dec2006 $1.74
Dec2005 $1.67
Dec2004 $1.69
Dec2003 $1.69

Recommended Reading:

Other ModernGraham posts about the company

Mondelez International Inc Valuation – June 2018 $MDLZ
Mondelez International Inc Valuation – March 2017 $MDLZ
Mondelez International Inc Valuation – August 2016 $MDLZ
5 Speculative and Overvalued Companies to Avoid – July 2015
Mondelez International Inc. Analysis – 2015 Update $MDLZ

Other ModernGraham posts about related companies

JM Smucker Co Valuation – March 2019 #SJM
Lamb Weston Holdings Inc Valuation – March 2019 #LW
Kraft Heinz Co Valuation – March 2019 #KHC
Sysco Corp Valuation – March 2019 $SYY
General Mills Inc Valuation – February 2019 $GIS
McCormick & Co Valuation – February 2019 $MKC
Archer-Daniels Midland Co Valuation – February 2019 $ADM
Conagra Brands Inc Valuation – February 2019 $CAG
Monster Beverage Corp Valuation – February 2019 $MNST
Campbell Soup Co Valuation – January 2019 $CPB

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.

Diamondback Energy Inc Valuation – February 2019 $FANG

Company Profile (excerpt from Reuters): Diamondback Energy, Inc., incorporated on December 30, 2011, is an independent oil and natural gas company. The Company focuses on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. As of December 31, 2016, the Company’s total net acreage position in the Permian Basin was approximately 105,894 net acres. As of December 31, 2016, the Company, through its subsidiary, Viper Energy Partners LP (Viper), owned mineral interests underlying approximately 107,568 gross acres primarily in Midland County, Texas in the Permian Basin. The Permian Basin area covers a portion of western Texas and eastern New Mexico.

FANG Chart

FANG data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FANG – 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 $17,310,967,500 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.10 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 3900.00% Pass
6. Moderate PEmg Ratio PEmg < 20 50.05 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.62 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 1.10 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 31.56 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 $2.11
MG Growth Estimate 7.74%
MG Value $50.54
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $30.57
MG Value based on 0% Growth $17.92
Market Implied Growth Rate 20.77%
Current Price $105.50
% of Intrinsic Value 208.73%

Diamondback Energy 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 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 Overvalued after growing its EPSmg (normalized earnings) from $1.39 in 2014 to an estimated $2.11 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 20.77% 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 Diamondback Energy Inc revealed the company was trading above its Graham Number of $88.21. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 50.05, which was above the industry average of 43.92. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-26.12.

Diamondback Energy Inc 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) -$26.12
Graham Number $88.21
PEmg 50.05
Current Ratio 1.10
PB Ratio 1.62
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 $795,689,000
Total Current Liabilities $721,787,000
Long-Term Debt $2,332,359,000
Total Assets $9,806,573,000
Intangible Assets $0
Total Liabilities $3,376,776,000
Shares Outstanding (Diluted Average) 98,818,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.46
Dec2017 $4.94
Dec2016 -$2.20
Dec2015 -$8.74
Dec2014 $3.64
Dec2013 $1.29
Dec2012 -$0.99
Dec2011 $0.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.11
Dec2017 -$0.12
Dec2016 -$2.23
Dec2015 -$1.80
Dec2014 $1.39
Dec2013 $0.21
Dec2012 -$0.27
Dec2011 $0.08

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

Marathon Petroleum Corp Valuation – February 2019 $MPC
Baker Hughes, a GE Co Valuation – February 2019 $BHGE
EOG Resources Inc Valuation – February 2019 $EOG
ConocoPhillips Valuation – February 2019 $COP
Devon Energy Corp Valuation – January 2019 $DVN
Noble Energy Inc Valuation – January 2019 $NBL
ONEOK Inc Valuation – January 2019 $OKE
Marathon Oil Corp Valuation – January 2019 $MRO
HollyFrontier Corp Valuation – January 2019 $HFC
Hess Corp Valuation – January 2019 $HES

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.

Raymond James Financial Valuation – February 2019 $RJF

Company Profile (excerpt from Reuters): Raymond James Financial, Inc. (RJF), incorporated on January 24, 1974, is a financial holding company. The Company’s subsidiaries include Raymond James & Associates, Inc. (RJ&A), Raymond James Financial Services, Inc. (RJFS), Raymond James Financial Services Advisors, Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management, Inc. (Eagle), and Raymond James Bank, N.A. (RJ Bank). The Company operates through five segments: Private Client Group (PCG), Capital Markets, Asset Management, RJ Bank and the Other segment. The Private Client Group segment includes the retail branches of the Company’s broker-dealer subsidiaries located throughout the United States, Canada and the United Kingdom. The Capital Markets segment includes institutional sales and trading in the United States, Canada and Europe. The Asset Management segment includes the operations of Eagle, the Eagle Family of Funds, Cougar Global Investments Limited (Cougar), the asset management operations of RJ&A, trust services of RJ Trust, and other fee-based asset management programs. RJ Bank segment provides corporate loans, securities based loans (SB) and residential loans. The Other segment includes principal capital and private equity activities, as well as certain corporate costs of RJF.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of RJF – 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 all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,570,757,649 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 171.22% Pass
5. Moderate PEmg Ratio PEmg < 20 15.25 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.94 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.38
MG Growth Estimate 12.03%
MG Value $175.15
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $77.98
MG Value based on 0% Growth $45.71
Market Implied Growth Rate 3.37%
Current Price $81.99
% of Intrinsic Value 46.81%

Raymond James Financial, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.98 in 2015 to an estimated $5.38 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.37% 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 above the price.

At the time of valuation, further research into Raymond James Financial, Inc. revealed the company was trading above its Graham Number of $81.73. The company pays a dividend of $1.1 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 15.25, which was below the industry average of 20.29, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Raymond James Financial, Inc. performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $81.73
PEmg 15.25
PB Ratio 1.94
Dividend Yield 1.34%
TTM Dividend $1.10
Number of Consecutive Years of Dividend Growth 6

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
Long-Term Debt & Capital Lease Obligation $2,448,000,000
Total Assets $38,544,000,000
Intangible Assets $633,000,000
Total Liabilities $32,319,000,000
Shares Outstanding (Diluted Average) 147,300,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.79
Sep2018 $5.75
Sep2017 $4.33
Sep2016 $3.65
Sep2015 $3.43
Sep2014 $3.32
Sep2013 $2.58
Sep2012 $2.20
Sep2011 $2.19
Sep2010 $1.83
Sep2009 $1.25
Sep2008 $1.97
Sep2007 $2.11
Sep2006 $1.85
Sep2005 $1.33
Sep2004 $1.15
Sep2003 $0.78
Sep2002 $0.71
Sep2001 $0.88
Sep2000 $1.19
Sep1999 $0.78

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.38
Sep2018 $4.48
Sep2017 $3.72
Sep2016 $3.29
Sep2015 $2.98
Sep2014 $2.65
Sep2013 $2.21
Sep2012 $1.98
Sep2011 $1.87
Sep2010 $1.74
Sep2009 $1.70
Sep2008 $1.84
Sep2007 $1.67
Sep2006 $1.35
Sep2005 $1.06
Sep2004 $0.93
Sep2003 $0.84

Recommended Reading:

Other ModernGraham posts about the company

Raymond James Financial Inc Valuation – March 2018 $RJF

Other ModernGraham posts about related companies

Nasdaq Inc Valuation – February 2019 $NDAQ
E*Trade Financial Corp Valuation – January 2019 $ETFC
Marsh & McLennan Companies Inc Valuation – January 2019 $MMC
Intercontinental Exchange Inc Valuation – January 2019 $ICE
H&R Block Inc Valuation – January 2019 $HRB
State Street Corp Valuation – January 2019 $STT
Morgan Stanley Valuation – January 2019 $MS
MSCI Inc Valuation – January 2019 $MSCI
BlackRock Inc Valuation – January 2019 $BLK
Ameriprise Financial Inc Valuation – January 2019 $AMP

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.

Monster Beverage Corp Valuation – February 2019 $MNST

Company Profile (excerpt from Reuters): Monster Beverage Corporation, incorporated on August 12, 2014, develops, markets, sells and distributes energy drink beverages, sodas and/or concentrates for energy drink beverages, primarily under various brand names, including Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, Muscle Monster, Mega Monster Energy, Punch Monster, Juice Monster, Ubermonster, BU, Mutant Super Soda, Nalu, NOS, Burn, Mother, Ultra, Play and Power Play, Gladiator, Relentless, Samurai, BPM and Full Throttle. The Company has three segments: Monster Energy Drinks segment, which consists of its Monster Energy drinks, as well as Mutant Super Soda drinks; Strategic Brands segment, which includes various energy drink brands owned through The Coca-Cola Company (TCCC), and Other segment (Other), which includes the American Fruits & Flavors (AFF) third-party products.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MNST – 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 $31,972,320,491 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.28 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 242.61% Pass
6. Moderate PEmg Ratio PEmg < 20 42.16 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 8.32 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 3.28 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 $1.37
MG Growth Estimate 14.50%
MG Value $51.42
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $19.88
MG Value based on 0% Growth $11.66
Market Implied Growth Rate 16.83%
Current Price $57.82
% of Intrinsic Value 112.45%

Monster Beverage Corp 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 $0.7 in 2014 to an estimated $1.37 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 16.83% 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 Monster Beverage Corp revealed the company was trading above its Graham Number of $16.22. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 42.16, which was above the industry average of 26.71. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.1.

Monster Beverage 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) $2.10
Graham Number $16.22
PEmg 42.16
Current Ratio 3.28
PB Ratio 8.32
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 $2,152,671,000
Total Current Liabilities $656,362,000
Long-Term Debt $0
Total Assets $4,871,359,000
Intangible Assets $2,373,891,000
Total Liabilities $978,092,000
Shares Outstanding (Diluted Average) 559,955,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.70
Dec2017 $1.42
Dec2016 $1.19
Dec2015 $0.95
Dec2014 $0.92
Dec2013 $0.65
Dec2012 $0.62
Dec2011 $0.51
Dec2010 $0.38
Dec2009 $0.37
Dec2008 $0.19
Dec2007 $0.25
Dec2006 $0.17
Dec2005 $0.11
Dec2004 $0.04
Dec2003 $0.01
Dec2002 $0.01
Dec2001 $0.01
Dec2000 $0.01
Dec1999 $0.01
Dec1998 $0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.37
Dec2017 $1.15
Dec2016 $0.96
Dec2015 $0.81
Dec2014 $0.70
Dec2013 $0.56
Dec2012 $0.48
Dec2011 $0.39
Dec2010 $0.31
Dec2009 $0.25
Dec2008 $0.18
Dec2007 $0.16
Dec2006 $0.09
Dec2005 $0.05
Dec2004 $0.02
Dec2003 $0.01
Dec2002 $0.01

Recommended Reading:

Other ModernGraham posts about the company

Monster Beverage Corp Valuation – April 2018 $MNST
Monster Beverage Corp Valuation – July 2016 $MNST
Monster Beverage Corp Valuation – January 2016 Update $MNST
Monster Beverage Corporation Analysis – October 2015 Update $MNST
Monster Beverage Analysis – July 2015 Update $MNST

Other ModernGraham posts about related companies

Campbell Soup Co Valuation – January 2019 $CPB
Kellogg Co Valuation – January 2019 $K
PepsiCo Inc Valuation – January 2019 $PEP
The Hershey Co Valuation – January 2019 $HSY
Coca-Cola Co Valuation – November 2018 $KO
Calavo Growers Inc Valuation – October 2018 $CVGW
Lancaster Colony Corp Valuation – August 2018 $LANC
SpartanNash Co Valuation – August 2018 $SPTN
Core-Mark Holding Co Inc Valuation – August 2018 $CORE
J&J Snack Foods Corp Valuation – August 2018 $JJSF

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.

Newmont Mining Corp Valuation – January 2019 $NEM

Company Profile (excerpt from Reuters): Newmont Mining Corporation, incorporated on December 06, 2001, is a mining company, which is focused on the production of and exploration for gold and copper. The Company is primarily a gold producer with operations and/or assets in the United States, Australia, Peru, Ghana and Suriname. The Company’s segments include North America, South America, Asia Pacific and Africa. The Company’s North America segment consists primarily of Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada, and Cripple Creek &Victor (CC&V) in the state of Colorado, in the United States. The Company’s South America segment consists primarily of Yanacocha in Peru and Merian in Suriname. The Company’s Asia Pacific segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. The Company’s Africa segment consists primarily of Ahafo and Akyem in Ghana.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of NEM – 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 $16,869,348,574 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.70 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
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 -106.55% Fail
6. Moderate PEmg Ratio PEmg < 20 261.02 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.46 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 4.70 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.04 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 $0.12
MG Growth Estimate 2.28%
MG Value $1.58
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $1.76
MG Value based on 0% Growth $1.03
Market Implied Growth Rate 126.26%
Current Price $31.67
% of Intrinsic Value 1999.06%

Newmont Mining Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, 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 Overvalued after growing its EPSmg (normalized earnings) from $0.11 in 2014 to an estimated $0.12 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 126.26% 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 Newmont Mining Corp revealed the company was trading above its Graham Number of $19.39. The company pays a dividend of $0.25 per share, for a yield of 0.8% Its PEmg (price over earnings per share – ModernGraham) was 261.02, which was above the industry average of 88.69. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-7.57.

Newmont Mining 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) -$7.57
Graham Number $19.39
PEmg 261.02
Current Ratio 4.70
PB Ratio 1.46
Current Dividend $0.25
Dividend Yield 0.79%
Number of Consecutive Years of Dividend Growth 2

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 $4,935,000,000
Total Current Liabilities $1,051,000,000
Long-Term Debt $4,043,000,000
Total Assets $20,559,000,000
Intangible Assets $0
Total Liabilities $8,985,000,000
Shares Outstanding (Diluted Average) 535,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.84
Dec2017 -$0.18
Dec2016 -$1.18
Dec2015 $0.43
Dec2014 $1.02
Dec2013 -$5.09
Dec2012 $3.61
Dec2011 $0.73
Dec2010 $4.55
Dec2009 $2.66
Dec2008 $1.83
Dec2007 -$4.17
Dec2006 $1.75
Dec2005 $0.72
Dec2004 $0.99
Dec2003 $1.15
Dec2002 $0.41
Dec2001 -$0.28
Dec2000 -$0.51
Dec1999 -$0.62
Dec1998 -$2.47

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.12
Dec2017 -$0.49
Dec2016 -$0.51
Dec2015 -$0.07
Dec2014 $0.11
Dec2013 $0.20
Dec2012 $2.78
Dec2011 $1.95
Dec2010 $2.15
Dec2009 $0.82
Dec2008 $0.01
Dec2007 -$0.57
Dec2006 $1.15
Dec2005 $0.77
Dec2004 $0.65
Dec2003 $0.33
Dec2002 -$0.29

Recommended Reading:

Other ModernGraham posts about the company

Newmont Mining Corp Valuation – March 2018 $NEM
Newmont Mining Corp Valuation – June 2016 $NEM
Newmont Mining Corporation Annual Valuation – 2015 $NEM
16 Companies in the Spotlight This Week – 4/26/14
Newmont Mining Corp (NEM) Annual Valuation – 2014

Other ModernGraham posts about related companies

SunCoke Energy Inc Valuation – September 2018 $SXC
Allegheny Technologies Inc Valuation – September 2018 $ATI
SSR Mining Inc Valuation – August 2018 $TSE-SSRM
Sandstorm Gold Ltd Valuation – August 2018 $TSE-SSL
Kirkland Lake Gold Ltd Valuation – August 2018 $TSE-KL
Natural Resource Partners LP Valuation – August 2018 $NRP
Kaiser Aluminum Corp Valuation – August 2018 $KALU
Semafo Inc Valuation – August 2018 $TSE-SMF
US Silica Holdings Inc Valuation – August 2018 $SLCA
Ivanhoe Mines Ltd Valuation – August 2018 $TSE-IVN

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.

Simon Property Group Inc Valuation – January 2019 $SPG

Company Profile (excerpt from Reuters): Simon Property Group, Inc., incorporated on March 10, 1998, is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. Simon Property Group, L.P. (Operating Partnership), is the Company’s partnership subsidiary that owns all of its real estate properties and other assets. As of December 31, 2016, the Company owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 Premium Outlets, 14 Mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. As of December 31, 2016, it had redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at 27 properties in the United States and it had one outlet and one other retail project under development. Internationally, as of December 31, 2016, it had ownership interests in nine Premium Outlets in Japan, three Premium Outlets in South Korea, two Premium Outlets in Canada, one Premium Outlet in Mexico, and one Premium Outlet in Malaysia. As of December 31, 2016, it also owned an interest in six Designer Outlet properties in Europe and one Designer Outlet property in Canada. As of December 31, 2016, it also had four international outlet properties under development. As of December 31, 2016, it owned a 20.3% equity stake in Klepierre SA, or Klepierre, a real estate company, which owns, or has an interest in, shopping centers located in 16 countries in Europe.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SPG – 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 $55,118,563,758 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 Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 195.02% Pass
6. Moderate PEmg Ratio PEmg < 20 26.85 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 13.65 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.51 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -17.11 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $6.41
MG Growth Estimate 7.96%
MG Value $156.47
Opinion Fairly Valued
MG Grade C-
MG Value based on 3% Growth $92.90
MG Value based on 0% Growth $54.46
Market Implied Growth Rate 9.17%
Current Price $172.00
% of Intrinsic Value 109.93%

Simon Property Group 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 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 Fairly Valued after growing its EPSmg (normalized earnings) from $4.19 in 2014 to an estimated $6.41 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 9.17% 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 Simon Property Group Inc revealed the company was trading above its Graham Number of $44.34. The company pays a dividend of $7.15 per share, for a yield of 4.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 26.85, which was below the industry average of 70.5, 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 $-83.3.

Simon Property Group 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) -$83.30
Graham Number $44.34
PEmg 26.85
Current Ratio 0.51
PB Ratio 13.65
Current Dividend $7.15
Dividend Yield 4.16%
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 9/1/2018
Total Current Assets $1,418,448,000
Total Current Liabilities $2,802,649,000
Long-Term Debt $23,678,264,000
Total Assets $31,079,693,000
Intangible Assets $0
Total Liabilities $27,182,192,000
Shares Outstanding (Diluted Average) 309,294,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.45
Dec2017 $6.24
Dec2016 $5.87
Dec2015 $5.88
Dec2014 $4.52
Dec2013 $4.24
Dec2012 $4.72
Dec2011 $3.48
Dec2010 $2.10
Dec2009 $1.05
Dec2008 $1.87
Dec2007 $1.95
Dec2006 $2.19
Dec2005 $1.82
Dec2004 $1.44
Dec2003 $1.65
Dec2002 $1.99
Dec2001 $0.85
Dec2000 $1.08
Dec1999 $0.97
Dec1998 $1.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $6.41
Dec2017 $5.71
Dec2016 $5.31
Dec2015 $4.87
Dec2014 $4.19
Dec2013 $3.72
Dec2012 $3.19
Dec2011 $2.31
Dec2010 $1.76
Dec2009 $1.65
Dec2008 $1.92
Dec2007 $1.90
Dec2006 $1.86
Dec2005 $1.64
Dec2004 $1.50
Dec2003 $1.46
Dec2002 $1.31

Recommended Reading:

Other ModernGraham posts about the company

Simon Property Group Inc Valuation – March 2018 $SPG
Simon Property Group Inc Valuation – June 2016 $SPG
Simon Property Group Annual Valuation – 2015 $SPG
10 Companies in the Spotlight This Week – 12/28/13
ModernGraham Valuation: Simon Property Group (SPG)

Other ModernGraham posts about related companies

Crown Castle International Corp Valuation – January 2019 $CCI
Welltower Inc Valuation – January 2019 $WELL
Boston Properties Inc Valuation – January 2019 $BXP
AvalonBay Communities Inc Valuation – December 2018 $AVB
Weyerhaeuser Co Valuation – December 2018 $WY
Alexandria Real Estate Equities Inc Valuation – November 2018 $ARE
LaSalle Hotel Properties Valuation – September 2018 $LHO
Cousins Properties Inc Valuation – September 2018 $CUZ
Cominar Real Estate Investment Trust Valuation – September 2018 $TSE:CUF.UN
CareTrust REIT Inc Valuation – August 2018 $CTRE

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.

Diamond Offshore Drilling Inc Valuation – June 2018 $DO

Company Profile (excerpt from Reuters): Diamond Offshore Drilling, Inc., incorporated on April 12, 1989, provides contract drilling services to the energy industry. As of December 31, 2016, the Company had a fleet of 24 offshore drilling rigs. As of December 31, 2016, its fleet consisted of four drillships, 19 semisubmersible rigs and one jack-up rig. Its fleet enables it to offer a range of services, primarily in the floater market, including ultra-deepwater, deepwater and mid-water. The principal markets for its offshore contract drilling services are the Gulf of Mexico, including the United States and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia and Vietnam; Europe, principally offshore the United Kingdom and Norway; East and West Africa; the Mediterranean, and the Middle East. The Company provides offshore drilling services to a customer base that includes independent oil and gas companies, and government-owned oil companies.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of DO – June 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 $2,938,364,489 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 4.51 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 -115.58% Fail
6. Moderate PEmg Ratio PEmg < 20 -21.84 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.76 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 4.51 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.88 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 Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg -$0.96
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth -$13.85
MG Value based on 0% Growth -$8.12
Market Implied Growth Rate -15.17%
Current Price $20.86
% of Intrinsic Value N/A

Diamond Offshore Drilling Inc 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 level of debt relative to the net current assets, and 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 $4.41 in 2014 to an estimated $-0.96 for 2018. 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 Diamond Offshore Drilling Inc 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 -21.84, which was below the industry average of 87.76, 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 $-11.15.

Diamond Offshore Drilling 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) -$11.15
Graham Number $0.00
PEmg -21.84
Current Ratio 4.51
PB Ratio 0.76
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 $879,969,000
Total Current Liabilities $195,026,000
Long-Term Debt $1,972,638,000
Total Assets $6,193,083,000
Intangible Assets $0
Total Liabilities $2,413,451,000
Shares Outstanding (Diluted Average) 137,495,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate -$1.10
Dec2017 $0.13
Dec2016 -$2.72
Dec2015 -$2.00
Dec2014 $2.81
Dec2013 $3.95
Dec2012 $5.18
Dec2011 $6.92
Dec2010 $6.87
Dec2009 $9.89
Dec2008 $9.42
Dec2007 $6.12
Dec2006 $5.12
Dec2005 $1.91
Dec2004 -$0.06
Dec2003 -$0.37
Dec2002 $0.47
Dec2001 $1.26
Dec2000 $0.53
Dec1999 $1.11
Dec1998 $2.66

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.96
Dec2017 -$0.44
Dec2016 -$0.01
Dec2015 $2.02
Dec2014 $4.41
Dec2013 $5.66
Dec2012 $6.89
Dec2011 $7.78
Dec2010 $7.97
Dec2009 $7.84
Dec2008 $6.05
Dec2007 $3.75
Dec2006 $2.19
Dec2005 $0.69
Dec2004 $0.18
Dec2003 $0.40
Dec2002 $0.92

Recommended Reading:

Other ModernGraham posts about the company

5 Speculative and Overvalued Companies to Avoid – July 2016
Diamond Offshore Drilling Inc Valuation – July 2016 $DO
28 Companies in the Spotlight This Week – 2/28/15
Diamond Offshore Drilling Inc. Annual Valuation – 2015 $DO
22 Companies in the Spotlight This Week – 11/29/14

Other ModernGraham posts about related companies

Cabot Oil & Gas Corp Valuation – June 2018 $COG
Concho Resources Inc Valuation – June 2018 $CXO
Vlaero Energy Corp Valuation – June 2018 $VLO
Occidental Petroleum Corp Valuation – June 2018 $OXY
Andeavor Valuation – May 2018 $ANDV
Halliburton Co Valuation – May 2018 $HAL
National Oilwell Varco Inc Valuation – May 2018 $NOV
Newfield Exploration Co Valuation – May 2018 $NFX
Kinder Morgan Inc Valuation – May 2018 $KMI
Range Resources Corp Valuation – May 2018 $RRC

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.

Mondelez International Inc Valuation – June 2018 $MDLZ

Company Profile (excerpt from Reuters): Robert Half International Inc. is engaged in providing specialized staffing and risk consulting services. The Company provides staffing and risk consulting services through the divisions: Accountemps, Robert Half Finance & Accounting, OfficeTeam, Robert Half Technology, Robert Half Management Resources, Robert Half Legal, The Creative Group and Protiviti. The Company operates through three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and Web design fields. The permanent placement segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting segment provides business and technology risk consulting and internal audit services.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MDLZ – June 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 $60,920,305,581 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.50 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 -16.80% Fail
6. Moderate PEmg Ratio PEmg < 20 18.83 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.34 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 0.50 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.56 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 $2.19
MG Growth Estimate 3.44%
MG Value $33.74
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $31.80
MG Value based on 0% Growth $18.64
Market Implied Growth Rate 5.16%
Current Price $41.30
% of Intrinsic Value 122.40%

MONDELEZ INTERNATIONAL INC Common Stock does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years. 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 $1.78 in 2014 to an estimated $2.19 for 2018. 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 the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into MONDELEZ INTERNATIONAL INC Common Stock revealed the company was trading above its Graham Number of $30.72. The company pays a dividend of $0.82 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 18.83, which was below the industry average of 24.35, 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 $-19.66.

MONDELEZ INTERNATIONAL INC Common Stock 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) -$19.66
Graham Number $30.72
PEmg 18.83
Current Ratio 0.50
PB Ratio 2.34
Current Dividend $0.82
Dividend Yield 1.99%
Number of Consecutive Years of Dividend Growth 4

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 $8,370,000,000
Total Current Liabilities $16,798,000,000
Long-Term Debt $13,180,000,000
Total Assets $64,503,000,000
Intangible Assets $40,111,000,000
Total Liabilities $37,953,000,000
Shares Outstanding (Diluted Average) 1,505,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.39
Dec2017 $1.91
Dec2016 $1.05
Dec2015 $4.44
Dec2014 $1.28
Dec2013 $2.19
Dec2012 $1.73
Dec2011 $2.01
Dec2010 $2.39
Dec2009 $2.03
Dec2008 $1.90
Dec2007 $1.62
Dec2006 $1.85
Dec2005 $1.55
Dec2004 $1.55
Dec2003 $2.01
Dec2002 $1.96
Dec2001 $1.17
Dec2000 $1.38
Dec1999 $1.20
Dec1998 $1.12

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.19
Dec2017 $2.12
Dec2016 $2.20
Dec2015 $2.62
Dec2014 $1.78
Dec2013 $2.05
Dec2012 $1.99
Dec2011 $2.07
Dec2010 $2.06
Dec2009 $1.86
Dec2008 $1.75
Dec2007 $1.68
Dec2006 $1.74
Dec2005 $1.67
Dec2004 $1.69
Dec2003 $1.69
Dec2002 $1.48

Recommended Reading:

Other ModernGraham posts about the company

Mondelez International Inc Valuation – March 2017 $MDLZ
Mondelez International Inc Valuation – August 2016 $MDLZ
5 Speculative and Overvalued Companies to Avoid – July 2015
Mondelez International Inc. Analysis – 2015 Update $MDLZ
Mondelez International Annual Valuation – 2014 $MDLZ

Other ModernGraham posts about related companies

Hormel Foods Corp Valuation – June 2018 $HRL
J M Smucker Co Valuation – May 2018 $SJM
Kraft Heinz Co Valuation – May 2018 $KHC
Dr Pepper Snapple Group Inc Valuation – May 2018 $DPS
Sysco Corp Valuation – May 2018 $SYY
General Mills Inc Valuation – May 2018 $GIS
Archer-Daniels Midland Co Valuation – May 2018 $ADM
Conagra Brands Inc Valuation – May 2018 $CAG
McCormick & Co Inc Valuation – May 2018 $MKC
Monster Beverage Corp Valuation – April 2018 $MNST

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.

Monster Beverage Corp Valuation – April 2018 $MNST

Company Profile (excerpt from Reuters): Monster Beverage Corporation, incorporated on August 12, 2014, develops, markets, sells and distributes energy drink beverages, sodas and/or concentrates for energy drink beverages, primarily under various brand names, including Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, Muscle Monster, Mega Monster Energy, Punch Monster, Juice Monster, Ubermonster, BU, Mutant Super Soda, Nalu, NOS, Burn, Mother, Ultra, Play and Power Play, Gladiator, Relentless, Samurai, BPM and Full Throttle. The Company has three segments: Monster Energy Drinks segment, which consists of its Monster Energy drinks, as well as Mutant Super Soda drinks; Strategic Brands segment, which includes various energy drink brands owned through The Coca-Cola Company (TCCC), and Other segment (Other), which includes the American Fruits & Flavors (AFF) third-party products.

MNST Chart

MNST data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MNST – April 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 $31,565,625,100 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 3.72 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 241.02% Pass
6. Moderate PEmg Ratio PEmg < 20 41.60 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 8.38 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 3.72 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 $1.36
MG Growth Estimate 14.35%
MG Value $50.78
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $19.79
MG Value based on 0% Growth $11.60
Market Implied Growth Rate 16.55%
Current Price $56.77
% of Intrinsic Value 111.80%

Monster Beverage Corporation 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 $0.7 in 2014 to an estimated $1.36 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 16.55% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Monster Beverage Corporation revealed the company was trading above its Graham Number of $16.12. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 41.6, which was above the industry average of 32.55. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.07.

Monster Beverage 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) $2.07
Graham Number $16.12
PEmg 41.60
Current Ratio 3.72
PB Ratio 8.38
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 12/1/2017
Total Current Assets $2,086,377,000
Total Current Liabilities $560,351,000
Long-Term Debt $0
Total Assets $4,791,012,000
Intangible Assets $2,365,728,000
Total Liabilities $895,800,000
Shares Outstanding (Diluted Average) 574,672,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.68
Dec2017 $1.42
Dec2016 $1.19
Dec2015 $0.95
Dec2014 $0.92
Dec2013 $0.65
Dec2012 $0.62
Dec2011 $0.51
Dec2010 $0.38
Dec2009 $0.37
Dec2008 $0.19
Dec2007 $0.25
Dec2006 $0.17
Dec2005 $0.11
Dec2004 $0.04
Dec2003 $0.01
Dec2002 $0.01
Dec2001 $0.01
Dec2000 $0.01
Dec1999 $0.01
Dec1998 $0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.36
Dec2017 $1.15
Dec2016 $0.96
Dec2015 $0.81
Dec2014 $0.70
Dec2013 $0.56
Dec2012 $0.48
Dec2011 $0.39
Dec2010 $0.31
Dec2009 $0.25
Dec2008 $0.18
Dec2007 $0.16
Dec2006 $0.09
Dec2005 $0.05
Dec2004 $0.02
Dec2003 $0.01
Dec2002 $0.01

Recommended Reading:

Other ModernGraham posts about the company

Monster Beverage Corp Valuation – July 2016 $MNST
Monster Beverage Corp Valuation – January 2016 Update $MNST
Monster Beverage Corporation Analysis – October 2015 Update $MNST
Monster Beverage Analysis – July 2015 Update $MNST
24 Companies in the Spotlight This Week – 3/28/15

Other ModernGraham posts about related companies

Campbell Soup Co Valuation – March 2018 $CPB
Kellogg Company Valuation – March 2018 $K
Hershey Co Valuation – March 2018 $HSY
PepsiCo Inc Valuation – March 2018 $PEP
The Coca-Cola Co Valuation – February 2018 $KO
Campbell Soup Company Valuation – September 2017 $CPB
Post Holdings Inc Valuation – Initial Coverage $POST
Dean Foods Co Valuation – Initial Coverage $DF
George Weston Limited Valuation – Initial Coverage $TSE:WN
Tyson Foods Inc Valuation – July 2017 $TSN

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.

Raymond James Financial Inc Valuation – March 2018 $RJF

Company Profile (excerpt from Reuters): Raymond James Financial, Inc. (RJF), incorporated on January 24, 1974, is a financial holding company. The Company’s subsidiaries include Raymond James & Associates, Inc. (RJ&A), Raymond James Financial Services, Inc. (RJFS), Raymond James Financial Services Advisors, Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management, Inc. (Eagle), and Raymond James Bank, N.A. (RJ Bank). The Company operates through five segments: Private Client Group (PCG), Capital Markets, Asset Management, RJ Bank and the Other segment. The Private Client Group segment includes the retail branches of the Company’s broker-dealer subsidiaries located throughout the United States, Canada and the United Kingdom. The Capital Markets segment includes institutional sales and trading in the United States, Canada and Europe. The Asset Management segment includes the operations of Eagle, the Eagle Family of Funds, Cougar Global Investments Limited (Cougar), the asset management operations of RJ&A, trust services of RJ Trust, and other fee-based asset management programs. RJ Bank segment provides corporate loans, securities based loans (SB) and residential loans. The Other segment includes principal capital and private equity activities, as well as certain corporate costs of RJF.

RJF Chart

RJF data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of RJF – March 2018

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $12,763,155,586 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 168.12% Pass
5. Moderate PEmg Ratio PEmg < 20 19.00 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.28 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.61
MG Growth Estimate 11.13%
MG Value $141.87
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $66.89
MG Value based on 0% Growth $39.21
Market Implied Growth Rate 5.25%
Current Price $87.65
% of Intrinsic Value 61.78%

Raymond James Financial, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.65 in 2014 to an estimated $4.61 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.25% 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 above the price.

At the time of valuation, further research into Raymond James Financial, Inc. revealed the company was trading above its Graham Number of $73.21. The company pays a dividend of $0.88 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 19, which was below the industry average of 25.5, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Raymond James Financial, Inc. performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $73.21
PEmg 19.00
PB Ratio 2.28
Dividend Yield 1.00%
TTM Dividend $0.88
Number of Consecutive Years of Dividend Growth 5

Useful Links:

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

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Long-Term Debt & Capital Lease Obligation $3,081,801,000
Total Assets $36,084,899,000
Intangible Assets $651,339,000
Total Liabilities $30,388,151,000
Shares Outstanding (Diluted Average) 148,261,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.15
Sep2017 $4.33
Sep2016 $3.65
Sep2015 $3.43
Sep2014 $3.32
Sep2013 $2.58
Sep2012 $2.20
Sep2011 $2.19
Sep2010 $1.83
Sep2009 $1.25
Sep2008 $1.97
Sep2007 $2.11
Sep2006 $1.85
Sep2005 $1.33
Sep2004 $1.15
Sep2003 $0.78
Sep2002 $0.71
Sep2001 $0.88
Sep2000 $1.19
Sep1999 $0.78
Sep1998 $0.83

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.61
Sep2017 $3.72
Sep2016 $3.29
Sep2015 $2.98
Sep2014 $2.65
Sep2013 $2.21
Sep2012 $1.98
Sep2011 $1.87
Sep2010 $1.74
Sep2009 $1.70
Sep2008 $1.84
Sep2007 $1.67
Sep2006 $1.35
Sep2005 $1.06
Sep2004 $0.93
Sep2003 $0.84
Sep2002 $0.87

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

Marsh & McLennan Companies Inc Valuation – March 2018 $MMC
Fidelity National Information Services Inc Valuation – March 2018 $FIS
Intercontinental Exchange Inc Valuation – March 2018 $ICE
H&R Block Inc Valuation – March 2018 $HRB
Morgan Stanley Valuation – March 2018 $MS
BlackRock Inc Valuation – March 2018 $BLK
Ameriprise Financial Inc Valuation – March 2018 $AMP
Navient Corp Valuation – March 2018 $NAVI
Invesco Ltd Valuation – March 2018 $IVZ
Capital One Financial Corp Valuation – March 2018 $COF

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.

Back To Top