Monday, July 27
Thursday, June 25
The red flags are with slower inventory turns, days sales outstanding, cash conversion, and cash flow from operations is less than NI for several quarters. This indicates aggressive accrual accounting (poor earnings quality) further evidence from the TTM Sloan ratio of 24.63. There are many positives now trading near its 52 low not to ignore the stock.
CBK has strong financial position supported by zero long term debt, high Z score and positive cash flow from operations every year back to 2008, except 2013. Valuation is relative and historically cheap. TTM gross margins is 34.93% slightly higher than the annual average back to 2008. P/TB TTM is 1.15 versus the annual average going back to 2009 of 1.78.EV/Revenue TTM is .29 versus the average annual value of .33, 2009 to 2014.Historically the cash flows from operating activities has been sufficient with no need to access existing Well Fargo 50 million line of credit.
Price on 07/01/15 = $3.92
Market Cap:151.05M (versus prior 6 year average MC of 201.03M)
Enterprise Value: 120.72M(versus prior 6 year average EV of 147.32M)
Price/Book (mrq): 1.16
EV/Revenue (ttm):0.29(versus prior 6 year average EV/Rev of .333)
EV/EBITDA(ttm):7.39 (versus prior 6 year average EV/EBITDA of 18.34)
ROA(ttm): 25.39% (versus prior 6 year average ROA of 11.71)
Return on Equity (ttm): 38.21%
Revenue (ttm): 406.84M , Revenue Per Share (ttm):11.01
Qtrly Revenue Growth (yoy): -11.40%
Gross Profit (ttm): 147.79M
EBITDA (ttm): 15.94M , Net Income Avl to Common (ttm): 42.92M
Total Cash (mrq):36.28M Total Cash Per Share (mrq): 0.98
Total Debt (mrq): 0.00 Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 2.39 , Book Value Per Share (mrq):3.63
CFFO(ttm): 21.69M , Free Cash Flow (ttm):-11.54M
52-Week High (Sep 8, 2014):$11.22,52-Week Low(Jun 16, 2015):$4.00
Shares Outstanding:37.20M , Float: 34.23M
% Held by Insiders:2.33% ,% Held by Institutions: 87.60%
Short % of Float (as of Jun 15, 2015): 6.20%
CBK ranking within the Apparel industry; Number 1 for financial strength, Number 1 for the largest price discount to its Graham number and Earnings Power Value, weakest 4 week stock price return, top 4 for Price/NCAV.
Additional insider buying reported today(07/02/15), 10,000 shares purchased by two directors at $4.00 per share.
Target of Macellum Capital a successful activist in apparel retail industry that now owns about a 5.2% .
MD&A management optimistically wrote, "second half of the year, we expect sales growth to significantly improve due to a number of factors".
Value based mean reversion can push the stock higher as it moves towards historical valuations for sales, book, and industry.
Target market is women 45 to 60, overlooked less competitive demographic.
Monday, June 8
Computer Task Group is an international IT staffing and services company. Employee count is 3,900 with geographically diversified operations in North America and Europe. CTG has a large presence in the fast growing healthcare market, implementing electronic health records and health information exchanges. Proprietary software is available to support healthcare providers and clinical systems integration. Founded in 1966, besides the health care sector CTG serves technology providers, financial services, energy , and general markets.
Computer Task Group is a simple story trading at historically and relative cheap valuations, P/B, P/S and market value near 5 year low. CTG is consistently profitable, TTM dividend yield of 3.20% and an oversold (-51.30%) negative 52 week price change.
The table below compares the enterprise value to non cash assets, gross profit, revenue, EBITDA, and EBIT for the annual periods 2009 to TTM. Valuation discounts are significant across all line items of the financial statements. The current price trades at only 1.45 times annual gross profit and 7.90 EV/EBIT.
The table below shows the increase in per share value for revenue, GP, book value, and dividends. These intrinsic value improvements contrast to the average per share market value declining over the same period. CTG trades at half the prior year's market value.
Ownership: According to Yahoo, insider ownership is 32.95%. But, reviewing the latest proxy there are 12 officers, directors that own 11.40%.Value investing institution Royce owns 12.50% along with other value shops, Heartland, Robeco, Minerva Advisors, Teton and others. Insider activity for 2015, directors acquired 26,555 shares for $231,815 at an average price of $8.72.CEO received 67,000 shares. Note that share count has remained stable from 2008 and prior years had positive insider buying at higher prices.
Price = $7.71 on 06/07/15
Annual Growth Rates:
Revenue 10yrs = 5.30%, 5yrs = 6.40%, 12 months = .60%
Free cash flow 5 yr growth rate = 31.80%
Book value growth rates 10yrs = 9.30%, 5yrs 9.80%, 12 months 13.70%
Market Cap: 144.31M,Enterprise Value:82.67M
Revenue(ttm):392.83M,Revenue Per Share:25.87
Qtrly Revenue Growth (yoy):-0.40% ,
Gross Profit(ttm):79.34M(compares favorably to current MC of 144.31M)
Total Cash(mrq):34.42M or 30% of Market Cap
Total Cash Per Share (mrq):2.23
Total Debt (mrq): 0.00 ,
CFFO(ttm):11.57M or ,FCF (ttm):10.44M
52-Week High:17.47 , 52-Week Low:7.27
Shares Outstanding: 18.72M , Float: 11.35M
% Held by Insiders: 32.95%,
% Held by Institutions:58.10%
Short % of Float: 6.10%
Annual Dividend Yield: 3.30%
Conclusion: CTG is a simple story that's safe and cheap. Their strong international presence in health care IT coupled with trend to use non permanent project based workers offers significant growth opportunities. Valuations are near the market's best with a 3.20% dividend yield supported by ample free cash flow. Lastly the trend toward using temporary based employees continues to grow.
Monday, June 1
This deep value is partially driven by its discount to the fair market value of its tangible assets coupled with its market size in relation to revenue and gross profit. Book value is 12,380,000 or 1.98 per share versus price of $.77 or market cap of 4.82M . Real estate likely worth near or more than current market capitalization. BDR owns 20 acres of land in Old Bridge NJ + facilities of 130,000 square feet.
Last week Insider purchased 15,108 shares for $10,313 or .682 per share.
Market Cap: 4.82M ,Price $.77, Enterprise Value: 10.25M
Enterprise Value/Revenue (ttm): 0.36, Revenue (ttm): 28.29M
Gross Profit (ttm): 10.96M , 52-Week Change: -17.20%
% Held by Insiders: 45.73% , Price/Book (mrq): 0.36
Sector: Technology, Industry: Communication Equipment Full Time Employees: 162
Note : BDR on 06/01/15 reported additional insider buying for 60,000 shares at $45,359 or $.76 per share.
International Baler Corp. (IBAL): International Baler Corp is a manufacturer of baling equipment. Technical, hydraulic and electrical mechanisms are used to compress a materials into bales for easier handling, shipping, disposal, storage, and recycling.
Insider purchases have been significant relative to number of shares in float. Directors purchased 904,128 shares for $2,259,940 for an average price of $2.49 over the past 2 months. Beneficial owner purchased 5,000 shares for $10,175 at an average price of $2.03.
Market Cap: 9.95M , Price $1.92, Enterprise Value: 7.23M
Enterprise Value/Revenue (ttm): 0.38 , Enterprise Value/EBITDA (ttm): 5.74
Gross Profit (ttm): 4.21M , EBITDA (ttm): 1.26M
52-Week Change: -6.34% , Insider ownership:; 15%
IBAL trades at a deep valuation discount to its sector.
Additional deep value ideas between 1M and 15M :
Click Stock Quotes on all stock mentioned in this post
BAB, Inc. (BABB)
Mechanical Technology, Incorporated (MKTY)
Microwave Filter Co. Inc. (MFCO)
Qualstar Corp. (QBAK)
AeroCentury Corp. (ACY)
|Symbol||Price 06/01/15||EV Per Share||Cash Per Share||Debt Per Share||Book Value Per Share||Revenue Per Share||GP Per Share||EBITDA Per Share||OI Per Share||52 Week High||52 Week Low||Shares in Float * EV Per Share||Shares in Float * Price Per Share|
Tuesday, May 19
The Managed Analytics Platform (introduced April 2015) is an enhanced derivative of legacy software Monarch. Both products address a new important requirement of big data analysis. This overlooked prerequisite of big data or data discovery called data prep is now the new must have for enhanced data analysis. Datawatch Monarch is the original data prep software. Datawatch has been selling, developing and improving Monarch software for 20 years. Just over the last 6 months to 9 months Gartner recognized that over 80% of the time spent with big data, data analysis was in data preparation.Datawatch’s Monarch software ignored for years by information research and advisory services such as Gartner. That’s changed. It was long overdue. Gartner’s officially recognizes data prep critical functionality. This will drive more business to Datawatch. At the end of Fiscal year 2014, Gartner published a report “Data Preparation Is Not an Afterthought”.
Major data analytic vendors such as Informatica, Alteryx, and smaller venture capital backed start up firms recently introduced data prep solution to feed visualization or analytic software such as Tableau. This new category was introduced over the past 6 to 9 months. Datawatch has a head start with access to multi structured documents that’s not being offered by the other data prep vendors. IBM uses Datawatch’s data prep Monarch technology to access semi structured content from their award winning content management solution (CMOD).