Netflix Inc Valuation – March 2019 #NFLX

Company Profile (excerpt from Reuters): Netflix, Inc., incorporated on August 29, 1997, is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of NFLX – 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 $156,739,041,000 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.49 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 616.45% Pass
6. Moderate PEmg Ratio PEmg < 20 159.11 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 30.93 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 1.49 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 3.23 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 $2.26
MG Growth Estimate 15.00%
MG Value $86.91
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $32.73
MG Value based on 0% Growth $19.19
Market Implied Growth Rate 75.31%
Current Price $359.17
% of Intrinsic Value 413.28%

Netflix, 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, 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 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 $0.36 in 2015 to an estimated $2.26 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 75.31% 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 Netflix, Inc. revealed the company was trading above its Graham Number of $31.39. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 159.11, which was above the industry average of 35.38. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-24.48.

Netflix, 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) -$24.48
Graham Number $31.39
PEmg 159.11
Current Ratio 1.49
PB Ratio 30.93
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

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Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $9,694,135,000
Total Current Liabilities $6,487,320,000
Long-Term Debt $10,360,058,000
Total Assets $25,974,400,000
Intangible Assets $0
Total Liabilities $20,735,635,000
Shares Outstanding (Diluted Average) 451,127,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.65
Dec2018 $2.68
Dec2017 $1.25
Dec2016 $0.43
Dec2015 $0.28
Dec2014 $0.62
Dec2013 $0.26
Dec2012 $0.04
Dec2011 $0.59
Dec2010 $0.42
Dec2009 $0.28
Dec2008 $0.19
Dec2007 $0.14
Dec2006 $0.10
Dec2005 $0.09
Dec2004 $0.05
Dec2003 $0.01
Dec2002 -$0.05
Dec2001 -$0.77
Dec2000 -$1.47

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.26
Dec2018 $1.39
Dec2017 $0.69
Dec2016 $0.38
Dec2015 $0.36
Dec2014 $0.39
Dec2013 $0.29
Dec2012 $0.31
Dec2011 $0.40
Dec2010 $0.28
Dec2009 $0.19
Dec2008 $0.14
Dec2007 $0.10
Dec2006 $0.06
Dec2005 -$0.01
Dec2004 -$0.19
Dec2003 -$0.36

Recommended Reading:

Other ModernGraham posts about the company

Netflix Inc Valuation – June 2018 $NFLX
Netflix Inc Valuation – February 2017 $NFLX
5 Speculative and Overvalued Companies to Avoid – November 2015
Netflix Inc Valuation – November 2015 Update $NFLX
5 Speculative and Overvalued Companies to Avoid – November 2014

Other ModernGraham posts about related companies

CBS Corp Valuation – February 2019 $CBS
Discovery Inc Valuation – February 2019 $DISCA
Comcast Corp Valuation – January 2019 $CMCSA
Viacom Inc Valuation – January 2019 $VIAB
Twenty-First Century Fox Inc Valuation – January 2019 $FOX
Walt Disney Co Valuation – November 2018 $DIS
Tegna Inc Valuation – August 2018 $TGNA
E.W. Scripps Co Valuation – August 2018 $SSP
Cinemark Holdings Inc Valuation – August 2018 $CNK
Corus Entertainment Inc Valuation – July 2018 $TSE:CJR.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.

Cadence Design Systems Inc Valuation – January 2019 $CDNS

Company Profile (excerpt from Reuters): Cadence Design Systems, Inc., incorporated on April 8, 1987, provides solutions that enable its customers to design electronic products. The Company’s product categories include Functional Verification, Digital integrated circuits (IC) Design and Signoff, Custom IC Design and Verification, System Interconnect and Analysis, and intellectual property (IP). The Company’s functional verification products are used to verify that the circuitry or the software designed will perform as intended. Its digital IC design offerings are used to create representations of a digital circuit or an IC that can be verified for correctness prior to implementation. Its custom IC design and verification offerings are used to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory and radio frequency (RF) designs. Its system interconnect and analysis offerings are used to develop printed circuit boards (PCBs) and IC packages. Its design IP offerings consist of functional blocks, which customers integrate into their ICs for the development process. Its product offerings include electronic design automation software, emulation and prototyping hardware, system interconnect and analysis.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CDNS – January 2019

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $13,545,636,946 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.64 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 1535.29% Pass
6. Moderate PEmg Ratio PEmg < 20 51.86 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 10.77 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.64 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.99 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 $0.93
MG Growth Estimate 4.74%
MG Value $16.67
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $13.45
MG Value based on 0% Growth $7.88
Market Implied Growth Rate 21.68%
Current Price $48.09
% of Intrinsic Value 288.43%

Cadence Design Systems Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and 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 $0.93 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 21.68% 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 Cadence Design Systems Inc revealed the company was trading above its Graham Number of $10.32. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 51.86, which was above the industry average of 50.37. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-0.45.

Cadence Design Systems 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) -$0.45
Graham Number $10.32
PEmg 51.86
Current Ratio 1.64
PB Ratio 10.77
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 $888,381,000
Total Current Liabilities $541,321,000
Long-Term Debt $345,113,000
Total Assets $2,273,207,000
Intangible Assets $899,726,000
Total Liabilities $1,015,790,000
Shares Outstanding (Diluted Average) 281,646,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.35
Dec2017 $0.73
Dec2016 $0.70
Dec2015 $0.81
Dec2014 $0.52
Dec2013 $0.56
Dec2012 $1.57
Dec2011 $0.27
Dec2010 $0.48
Dec2009 -$0.58
Dec2008 -$7.30
Dec2007 $1.01
Dec2006 $0.46
Dec2005 $0.16
Dec2004 $0.25
Dec2003 -$0.07
Dec2002 $0.23
Dec2001 $0.55
Dec2000 $0.19
Dec1999 -$0.06
Dec1998 $0.10

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.93
Dec2017 $0.70
Dec2016 $0.73
Dec2015 $0.75
Dec2014 $0.70
Dec2013 $0.68
Dec2012 $0.13
Dec2011 -$0.80
Dec2010 -$1.29
Dec2009 -$1.87
Dec2008 -$2.03
Dec2007 $0.52
Dec2006 $0.25
Dec2005 $0.17
Dec2004 $0.20
Dec2003 $0.17
Dec2002 $0.26

Recommended Reading:

Other ModernGraham posts about the company

Cadence Design Systems Inc Valuation – Initial Coverage $CDNS

Other ModernGraham posts about related companies

Red Hat Inc Valuation – January 2019 $RHT
Alphabet Inc Valuation – January 2019 $GOOG $GOOGL
Ansys Inc Valuation – January 2019 $ANSS
Citrix Systems Inc Valuation – January 2019 $CTXS
Microsoft Corporation Valuation – November 2018 $MSFT
Cisco Systems Inc Valuation – November 2018 $CSCO
Kinaxis Inc Valuation – August 2018 $TSE:KXS
CSG Systems International Inc Valuation – August 2018 $CSGS
SPS Commerce Inc Valuation – August 2018 $SPSC
Synchronoss Technologies Inc Valuation – August 2018 $SNCR

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.

Tegna Inc Valuation – August 2018 $TGNA

Company Profile (excerpt from Reuters): Tegna Inc., incorporated on February 23, 1972, includes a portfolio of media and digital businesses that provide content. The Company operates through TEGNA Media (Media Segment) and TEGNA Digital (Digital Segment) segments. As of December 31, 2016, the Company’s media business included 46 television stations operating in 38 markets and offers television programming and digital content.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TGNA – August 2018

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,477,588,762 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.93 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 -17.50% Fail
6. Moderate PEmg Ratio PEmg < 20 6.43 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.28 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 1.93 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 12.94 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 $1.83
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $26.48
MG Value based on 0% Growth $15.52
Market Implied Growth Rate -1.03%
Current Price $11.75
% of Intrinsic Value N/A

GANNETT CO 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 net 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 $2.74 in 2014 to an estimated $1.83 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 1.03% annual earnings loss 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 GANNETT CO INC. Common Stock revealed the company was trading below its Graham Number of $12.75. The company pays a dividend of $0.35 per share, for a yield of 3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 6.43, which was below the industry average of 38.97, 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 $-16.27.

GANNETT CO INC. Common Stock receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$16.27
Graham Number $12.75
PEmg 6.43
Current Ratio 1.93
PB Ratio 2.28
Current Dividend $0.35
Dividend Yield 2.98%
Number of Consecutive Years of Dividend Growth 0

 

Useful Links:

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

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $502,878,000
Total Current Liabilities $260,937,000
Long-Term Debt $3,131,137,000
Total Assets $5,142,663,000
Intangible Assets $4,138,676,000
Total Liabilities $4,025,752,000
Shares Outstanding (Diluted Average) 216,515,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.56
Dec2017 $1.26
Dec2016 $1.99
Dec2015 $2.00
Dec2014 $4.58
Dec2013 $1.66
Dec2012 $1.79
Dec2011 $1.89
Dec2010 $2.43
Dec2009 $1.51
Dec2008 -$29.11
Dec2007 $4.52
Dec2006 $4.90
Dec2005 $5.06
Dec2004 $4.92
Dec2003 $4.46
Dec2002 $4.31
Dec2001 $3.03
Dec2000 $6.41
Dec1999 $3.40
Dec1998 $3.50

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.83
Dec2017 $2.07
Dec2016 $2.45
Dec2015 $2.58
Dec2014 $2.74
Dec2013 $1.83
Dec2012 -$0.15
Dec2011 -$2.00
Dec2010 -$3.68
Dec2009 -$5.36
Dec2008 -$6.52
Dec2007 $4.78
Dec2006 $4.85
Dec2005 $4.67
Dec2004 $4.52
Dec2003 $4.32
Dec2002 $4.21

Recommended Reading:

Other ModernGraham posts about the company

Tegna Inc Valuation – February 2017 $TGNA
Tegna Inc. Valuation – November 2015 Update $TGNA
10 Most Undervalued Companies for the Enterprising Investor – November 2015
10 Most Undervalued Companies for the Enterprising Investor – October 2015
10 Companies Benjamin Graham Would Invest In Today – October 2015

Other ModernGraham posts about related companies

E.W. Scripps Co Valuation – August 2018 $SSP
Cinemark Holdings Inc Valuation – August 2018 $CNK
Corus Entertainment Inc Valuation – July 2018 $TSE:CJR.B
AMC Networks Inc Valuation – July 2018 $AMCX
International Speedway Corp Valuation – July 2018 $ISCA
Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS

Disclaimer:

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

E.W. Scripps Co Valuation – August 2018 $SSP

Company Profile (excerpt from Reuters): The E. W. Scripps Company, incorporated on December 1, 1987, is a media enterprise with interests in television and radio broadcasting, as well as local and national digital media brands. The Company’s segments include television, radio, digital, and syndication and other. The Company serves audiences and businesses through a portfolio of television, radio and digital media brands. It also has a collection of local and national digital journalism and information businesses. It also produces television programming, investigative reporting newsroom in Washington, District of Columbia (D.C.) and serves educational program, the Scripps National Spelling Bee.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SSP – August 2018

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,170,375,912 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.83 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 -144.60% Fail
6. Moderate PEmg Ratio PEmg < 20 155.91 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.28 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 2.83 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.86 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 $0.09
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $1.32
MG Value based on 0% Growth $0.78
Market Implied Growth Rate 73.71%
Current Price $14.24
% of Intrinsic Value N/A

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, and 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 or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $0.29 in 2014 to an estimated $0.09 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 73.71% 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 $8.95. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 155.91, which was above the industry average of 38.97. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-7.43.

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) -$7.43
Graham Number $8.95
PEmg 155.91
Current Ratio 2.83
PB Ratio 1.28
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

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

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $569,556,000
Total Current Liabilities $201,372,000
Long-Term Debt $686,659,000
Total Assets $2,089,925,000
Intangible Assets $1,172,864,000
Total Liabilities $1,178,061,000
Shares Outstanding (Diluted Average) 81,852,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.31
Dec2017 -$0.16
Dec2016 $0.80
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

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.09
Dec2017 -$0.03
Dec2016 $0.06
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

Recommended Reading:

Other ModernGraham posts about the company

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

Other ModernGraham posts about related companies

Cinemark Holdings Inc Valuation – August 2018 $CNK
Corus Entertainment Inc Valuation – July 2018 $TSE:CJR.B
AMC Networks Inc Valuation – July 2018 $AMCX
International Speedway Corp Valuation – July 2018 $ISCA
Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS
Discovery Inc Valuation – April 2018 $DISCA

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.

Cinemark Holdings Inc Valuation – August 2018 $CNK

Company Profile (excerpt from Reuters): Cinemark Holdings, Inc. (Cinemark), incorporated on August 2, 2006, is engaged in the motion picture exhibition business with theatres in the United States (U.S.), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Paraguay, Curacao and Bolivia. The Company manages its business in two segments: U.S. markets and international markets. The international segment consists of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of December 31, 2016, the Company operated 526 theatres and 5,903 screens in the United States and Latin America. As of December 31, 2016, its the United States circuit had 339 theatres and 4,559 screens in 41 states and its international circuit had 187 theatres and 1,344 screens in 15 countries. It develops new platforms for its theatre circuit, such as XD, Cinemark Reserve, Luxury Lounger reclining seats, CineArts and other concepts. It plays mainstream films from various genres, such as animated films, family films, dramas, comedies, horror and action films. It offers content in both two-dimension (2D) and three-dimension (3D) formats in all of its theatres.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CNK – August 2018

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,251,249,242 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.53 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 93.64% Pass
6. Moderate PEmg Ratio PEmg < 20 17.54 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.83 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 1.53 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 8.69 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 $2.05
MG Growth Estimate 6.53%
MG Value $44.12
Opinion Fairly Valued
MG Grade B
MG Value based on 3% Growth $29.69
MG Value based on 0% Growth $17.40
Market Implied Growth Rate 4.52%
Current Price $35.92
% of Intrinsic Value 81.41%

Cinemark Holdings, 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 is only concerned with the level of debt relative to the net 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 Fairly Valued after growing its EPSmg (normalized earnings) from $1.43 in 2014 to an estimated $2.05 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 4.52% 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 Cinemark Holdings, Inc. revealed the company was trading above its Graham Number of $22.88. The company pays a dividend of $1.16 per share, for a yield of 3.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 17.54, which was below the industry average of 38.97, 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 $-20.23.

Cinemark Holdings, Inc. performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$20.23
Graham Number $22.88
PEmg 17.54
Current Ratio 1.53
PB Ratio 2.83
Current Dividend $1.16
Dividend Yield 3.23%
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 3/1/2018
Total Current Assets $591,740,000
Total Current Liabilities $387,349,000
Long-Term Debt $1,775,252,000
Total Assets $4,413,471,000
Intangible Assets $1,619,109,000
Total Liabilities $2,941,480,000
Shares Outstanding (Diluted Average) 116,143,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.94
Dec2017 $2.26
Dec2016 $2.19
Dec2015 $1.87
Dec2014 $1.66
Dec2013 $1.28
Dec2012 $1.47
Dec2011 $1.14
Dec2010 $1.29
Dec2009 $0.87
Dec2008 -$0.45
Dec2007 $0.85
Dec2006 $0.01
Dec2005 -$0.31
Dec2004 -$0.13
Dec2003 $0.37
Dec2002 $0.30

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.05
Dec2017 $2.02
Dec2016 $1.83
Dec2015 $1.59
Dec2014 $1.43
Dec2013 $1.28
Dec2012 $1.14
Dec2011 $0.89
Dec2010 $0.69
Dec2009 $0.32
Dec2008 $0.03
Dec2007 $0.23
Dec2006 -$0.04
Dec2005 -$0.02
Dec2004 $0.12
Dec2003 $0.20
Dec2002 $0.10

Recommended Reading:

Other ModernGraham posts about the company

4 Best Stocks for Value Investors This Week – 1/28/17
Cinemark Holdings Inc Valuation – Initial Coverage $CNK

Other ModernGraham posts about related companies

Corus Entertainment Inc Valuation – July 2018 $TSE:CJR.B
AMC Networks Inc Valuation – July 2018 $AMCX
International Speedway Corp Valuation – July 2018 $ISCA
Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS
Discovery Inc Valuation – April 2018 $DISCA
Time Warner Inc Valuation – March 2018 $TWX

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.

Corus Entertainment Inc Valuation – July 2018 $TSE:CJR.B

Company Profile (excerpt from Reuters): Corus Entertainment Inc. is a media and content company. The Company creates and delivers quality brands and content across platforms for audiences around the world.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSX-CJR.B – July 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 $1,061,764,000 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.95 Fail
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 14.45% Fail
6. Moderate PEmg Ratio PEmg < 20 4.55 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.51 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 0.95 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -58.35 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.89
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $12.91
MG Value based on 0% Growth $7.57
Market Implied Growth Rate -1.98%
Current Price $4.05
% of Intrinsic Value N/A

Corus Entertainment 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. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.79 in 2014 to an estimated $0.89 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 1.98% annual earnings loss 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 Corus Entertainment Inc. (USA) revealed the company was trading below its Graham Number of $17.11. The company pays a dividend of $1.14 per share, for a yield of 28.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 4.55, which was below the industry average of 38.81, 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 $-13.17.

Corus Entertainment Inc. (USA) receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$13.17
Graham Number $17.11
PEmg 4.55
Current Ratio 0.95
PB Ratio 0.51
Current Dividend $1.14
Dividend Yield 28.15%
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 5/1/2018
Total Current Assets $572,097,000
Total Current Liabilities $604,723,000
Long-Term Debt $1,903,577,000
Total Assets $4,968,929,000
Intangible Assets $3,960,973,000
Total Liabilities $3,319,528,000
Shares Outstanding (Diluted Average) 208,624,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.10
Aug2017 $0.95
Aug2016 $0.96
Aug2015 -$0.29
Aug2014 $1.76
Aug2013 $1.90
Aug2012 $1.78
Aug2011 $1.78
Aug2010 $1.56
Aug2009 -$0.71
Aug2008 $1.54
Aug2007 $1.24
Aug2006 $0.41
Aug2005 $0.83
Aug2004 -$0.27
Aug2003 $0.47
Aug2002 -$1.98
Aug2001 $1.53
Aug2000 $2.30

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.89
Aug2017 $0.88
Aug2016 $0.97
Aug2015 $1.11
Aug2014 $1.79
Aug2013 $1.62
Aug2012 $1.39
Aug2011 $1.16
Aug2010 $0.83
Aug2009 $0.53
Aug2008 $1.02
Aug2007 $0.68
Aug2006 $0.23
Aug2005 $0.13
Aug2004 $0.00
Aug2003 $0.24
Aug2002 $0.21

Recommended Reading:

Other ModernGraham posts about the company

Corus Entertainment Inc Valuation – Initial Coverage $TSE:CJR.B

Other ModernGraham posts about related companies

Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS
Discovery Inc Valuation – April 2018 $DISCA
Time Warner Inc Valuation – March 2018 $TWX
Viacom Inc Valuation – March 2018 $VIAB
Twenty-First Century Fox Inc Valuation – March 2018 $FOXA
Walt Disney Co Valuation – February 2018 $DIS

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.

AMC Networks Inc Valuation – July 2018 $AMCX

Company Profile (excerpt from Reuters): AMC Networks Inc., incorporated on March 9, 2011, is a holding company, which conducts all of its operations through its subsidiaries. The Company owns and operates entertainment businesses and assets. The Company operates through two segments: National Networks, and International and Other. The National Networks segment includes activities of its programming businesses, which include its programming networks distributed in the United States and Canada. The International and Other segment principally includes AMC Networks International (AMCNI), the Company’s international programming businesses, consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company’s independent film distribution business; AMC Networks International- DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks, and various developing online content distribution initiatives.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of AMCX – July 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 $3,404,390,873 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.64 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 514.58% Pass
6. Moderate PEmg Ratio PEmg < 20 9.89 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 13.96 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.64 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 2.64 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.97
MG Growth Estimate 15.00%
MG Value $229.95
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $86.60
MG Value based on 0% Growth $50.77
Market Implied Growth Rate 0.70%
Current Price $59.08
% of Intrinsic Value 25.69%

AMC NETWORKS 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 insufficient earnings stability over the last ten years, and the poor dividend history, and the high PB ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.95 in 2014 to an estimated $5.97 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.7% 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 AMC NETWORKS INC Common Stock revealed the company was trading above its Graham Number of $18.93. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 9.89, which was below the industry average of 38.81, 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 $-48.

AMC NETWORKS INC Common Stock receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$48.00
Graham Number $18.93
PEmg 9.89
Current Ratio 2.64
PB Ratio 13.96
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 $1,889,454,000
Total Current Liabilities $715,666,000
Long-Term Debt $3,101,138,000
Total Assets $5,113,367,000
Intangible Assets $2,439,638,000
Total Liabilities $4,852,256,000
Shares Outstanding (Diluted Average) 61,719,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.21
Dec2017 $7.18
Dec2016 $3.74
Dec2015 $5.01
Dec2014 $3.58
Dec2013 $4.00
Dec2012 $1.89
Dec2011 $1.79
Dec2010 $1.16

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.97
Dec2017 $5.14
Dec2016 $3.96
Dec2015 $3.80
Dec2014 $2.95
Dec2013 $2.35
Dec2012 $1.34
Dec2011 $0.91
Dec2010 $0.39

Recommended Reading:

Other ModernGraham posts about the company

AMC Networks Inc Valuation – December 2016 $AMCX
AMC Networks Inc. Analysis – Initial Coverage $AMCX

Other ModernGraham posts about related companies

Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS
Discovery Inc Valuation – April 2018 $DISCA
Time Warner Inc Valuation – March 2018 $TWX
Viacom Inc Valuation – March 2018 $VIAB
Twenty-First Century Fox Inc Valuation – March 2018 $FOXA
Walt Disney Co Valuation – February 2018 $DIS

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.

International Speedway Corp Valuation – July 2018 $ISCA

Company Profile (excerpt from Reuters): International Speedway Corporation, incorporated on May 7, 1953, is an owner of motorsports entertainment facilities and promoter of motorsports themed entertainment activities in the United States. The Company’s motorsports themed event operations consist of racing events at its motorsports entertainment facilities. As of November 30, 2016, the Company owned and/or operated 13 of the nation’s motorsports entertainment facilities: Daytona International Speedway (Daytona) in Florida; Talladega Superspeedway (Talladega) in Alabama; Michigan International Speedway (Michigan) in Michigan; Auto Club Speedway of Southern California (Auto Club Speedway) in California; Kansas Speedway (Kansas) in Kansas; Richmond International Raceway (Richmond) in Virginia; Darlington Raceway (Darlington) in South Carolina; Chicagoland Speedway (Chicagoland) in Illinois; Martinsville Speedway (Martinsville) in Virginia; Phoenix International Raceway (Phoenix) in Arizona; Homestead-Miami Speedway (Homestead) in Florida; Watkins Glen International (Watkins Glen) in New York, and Route 66 Raceway (Route 66) in Illinois.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of ISCA – July 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 $1,880,540,056 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.32 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 241.39% Pass
6. Moderate PEmg Ratio PEmg < 20 14.42 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.17 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 2.32 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.10 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 $2.98
MG Growth Estimate 15.00%
MG Value $114.65
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $43.18
MG Value based on 0% Growth $25.31
Market Implied Growth Rate 2.96%
Current Price $42.95
% of Intrinsic Value 37.46%

International Speedway Corp Class A qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the small size. The Enterprising Investor is only concerned with the level of debt relative to the net 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 $1.25 in 2014 to an estimated $2.98 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.96% 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 International Speedway Corp Class A revealed the company was trading below its Graham Number of $62.27. The company pays a dividend of $0.43 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 14.42, which was below the industry average of 38.81, 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 $-6.66.

International Speedway Corp Class A fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$6.66
Graham Number $62.27
PEmg 14.42
Current Ratio 2.32
PB Ratio 1.17
Current Dividend $0.43
Dividend Yield 1.00%
Number of Consecutive Years of Dividend Growth 12

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 5/1/2018
Total Current Assets $406,014,000
Total Current Liabilities $174,893,000
Long-Term Debt $255,254,000
Total Assets $2,320,981,000
Intangible Assets $296,895,000
Total Liabilities $700,264,000
Shares Outstanding (Diluted Average) 44,170,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.18
Nov2017 $2.48
Nov2016 $1.66
Nov2015 $1.21
Nov2014 $1.45
Nov2013 $0.97
Nov2012 $1.18
Nov2011 $1.46
Nov2010 $1.13
Nov2009 $0.14
Nov2008 $2.71
Nov2007 $1.64
Nov2006 $2.19
Nov2005 $2.99
Nov2004 $2.94
Nov2003 $1.98
Nov2002 -$7.75
Nov2001 $1.65
Nov2000 $0.95
Nov1999 $1.22
Nov1998 $1.00

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.98
Nov2017 $1.77
Nov2016 $1.37
Nov2015 $1.24
Nov2014 $1.25
Nov2013 $1.09
Nov2012 $1.21
Nov2011 $1.29
Nov2010 $1.32
Nov2009 $1.59
Nov2008 $2.37
Nov2007 $2.25
Nov2006 $1.86
Nov2005 $1.25
Nov2004 $0.24
Nov2003 -$0.87
Nov2002 -$1.72

Recommended Reading:

Other ModernGraham posts about the company

International Speedway Corp Valuation – Initial Coverage $ISCA

Other ModernGraham posts about related companies

Cineplex Inc Valuation – July 2018 $TSE-CGX
Graham Holdings Co Valuation – July 2018 $GHC
News Corp Valuation – June 2018 $NWS
Netflix Inc Valuation – June 2018 $NFLX
CBS Corporation Valuation – April 2018 $CBS
Discovery Inc Valuation – April 2018 $DISCA
Time Warner Inc Valuation – March 2018 $TWX
Viacom Inc Valuation – March 2018 $VIAB
Twenty-First Century Fox Inc Valuation – March 2018 $FOXA
Walt Disney Co Valuation – February 2018 $DIS

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.

Cineplex Inc Valuation – July 2018 $TSE-CGX

Company Profile (excerpt from Reuters): Cineplex Inc. (Cineplex) is a Canada-based film exhibition company. The Company’s segments include Exhibition and Media. The Exhibition segment includes all direct and ancillary revenues from theatre attendance, including box office and food service revenues. The Exhibition segment also includes amusement gaming and leisure, theatre rentals and digital commerce rental and sales. The Media segment consists of two operating segments: Cineplex Media and Cineplex Digital Media. Cineplex Media consists of all in-theatre advertising revenues and costs, including pre-show, show time, magazine and lobby advertising. Cineplex Digital Media is engaged in the design, installation and operations of digital signage networks, along with advertising on certain networks. The Company has theatres in approximately 10 provinces. Its subsidiaries include Famous Players Limited Partnership, Galaxy Entertainment Inc., Cineplex Digital Media Inc., Cineplex Digital Networks Inc. and Cineplex Starburst Inc.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-CGX – July 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 $1,934,187,740 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.40 Fail
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 31.60% Fail
6. Moderate PEmg Ratio PEmg < 20 33.61 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.76 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 0.40 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.72 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.91
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $13.18
MG Value based on 0% Growth $7.72
Market Implied Growth Rate 12.55%
Current Price $30.54
% of Intrinsic Value N/A

Cineplex 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 or 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 stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.32 in 2014 to an estimated $0.91 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 12.55% 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 Cineplex Inc revealed the company was trading above its Graham Number of $0. The company pays a dividend of $1.66 per share, for a yield of 5.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 33.61, which was below the industry average of 38.81, 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 $-14.37.

Cineplex 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) -$14.37
Graham Number $0.00
PEmg 33.61
Current Ratio 0.40
PB Ratio 2.76
Current Dividend $1.66
Dividend Yield 5.44%
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 3/1/2018
Total Current Assets $182,963,000
Total Current Liabilities $459,169,000
Long-Term Debt $473,952,000
Total Assets $1,793,161,000
Intangible Assets $933,415,000
Total Liabilities $1,093,168,000
Shares Outstanding (Diluted Average) 63,343,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate
Dec2017 $1.11
Dec2016 $1.25
Dec2015 $2.12
Dec2014 $1.20
Dec2013 $1.32
Dec2012 $1.97
Dec2011 $0.85
Dec2010 $0.89
Dec2009 $0.95
Dec2008 $0.55
Dec2007 $0.56
Dec2006 $0.23
Dec2005 $0.44
Dec2004 $0.88
Dec2003 $0.22

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.91
Dec2017 $1.38
Dec2016 $1.53
Dec2015 $1.61
Dec2014 $1.32
Dec2013 $1.32
Dec2012 $1.22
Dec2011 $0.82
Dec2010 $0.75
Dec2009 $0.64
Dec2008 $0.50
Dec2007 $0.47
Dec2006 $0.40
Dec2005 $0.43
Dec2004 $0.35
Dec2003 $0.07

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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.

Graham Holdings Co Valuation – July 2018 $GHC

Company Profile (excerpt from Reuters): Graham Holdings Company, incorporated on July 21, 2003, is a diversified education and media company. The Company’s operations include educational services; television broadcasting; online, print and local television (TV) news; social-media advertising services; home health and hospice care, and manufacturing. The Company’s segments include Kaplan Higher Education (KHE), Kaplan Test Preparation (KTP), Kaplan International, television broadcasting and other businesses.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of GHC – July 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 $3,172,039,297 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.32 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 126.11% Pass
6. Moderate PEmg Ratio PEmg < 20 18.94 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.11 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 1.32 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.25 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $30.95
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $448.78
MG Value based on 0% Growth $263.08
Market Implied Growth Rate 5.22%
Current Price $586.10
% of Intrinsic Value N/A

Graham Holdings Co does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the low current ratio, and the lack of earnings stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $81.06 in 2014 to an estimated $30.95 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.22% 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 Graham Holdings Co revealed the company was trading above its Graham Number of $0. The company pays a dividend of $5.08 per share, for a yield of 0.9% Its PEmg (price over earnings per share – ModernGraham) was 18.94, which was below the industry average of 38.81, 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 $-64.79.

Graham Holdings Co 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) -$64.79
Graham Number $0.00
PEmg 18.94
Current Ratio 1.32
PB Ratio 1.11
Current Dividend $5.08
Dividend Yield 0.87%
Number of Consecutive Years of Dividend Growth 1

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Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,521,436,000
Total Current Liabilities $1,152,583,000
Long-Term Debt $91,079,000
Total Assets $4,760,958,000
Intangible Assets $1,636,074,000
Total Liabilities $1,876,045,000
Shares Outstanding (Diluted Average) 5,473,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate
Dec2017 $53.89
Dec2016 $29.80
Dec2015 -$17.87
Dec2014 $195.03
Dec2013 $32.05
Dec2012 $17.39
Dec2011 $14.70
Dec2010 $31.04
Dec2009 $9.78
Dec2008 $6.87
Dec2007 $30.19
Dec2006 $33.68
Dec2005 $32.59
Dec2004 $34.59
Dec2003 $25.12
Dec2002 $21.34
Dec2001 $24.06
Dec2000 $14.32
Dec1999 $22.30
Dec1998 $41.10

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $30.95
Dec2017 $50.48
Dec2016 $49.61
Dec2015 $55.76
Dec2014 $81.06
Dec2013 $23.05
Dec2012 $17.69
Dec2011 $18.06
Dec2010 $20.60
Dec2009 $17.79
Dec2008 $23.73
Dec2007 $31.85
Dec2006 $31.61
Dec2005 $29.56
Dec2004 $26.66
Dec2003 $22.27
Dec2002 $22.11

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Other ModernGraham posts about the company

7 Best Undervalued Stocks of the Week – 9/3/16
Graham Holdings Co Valuation – August 2016 $GHC
10 Undervalued Stocks for the Enterprising Investor – August 2016
10 Most Undervalued Companies for the Enterprising Investor – July 2016
10 Most Undervalued Companies for the Enterprising Investor – June 2016

Other ModernGraham posts about related companies

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CBS Corporation Valuation – April 2018 $CBS
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Time Warner Inc Valuation – March 2018 $TWX
Viacom Inc Valuation – March 2018 $VIAB
Twenty-First Century Fox Inc Valuation – March 2018 $FOXA
Walt Disney Co Valuation – February 2018 $DIS
Live Nation Entertainment Inc Valuation – Initial Coverage $LYV
Walt Disney Co Valuation – March 2017 $DIS

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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