I have used the analysis tools on the website stockcalc.com to generate some of the content of this blog post. These tools and reports are available for free at www.stockcalc.com/TopPicks.aspx.

Trading at Less than Cash Value

Today we are looking at companies trading at less than cash value meaning companies whose current share price is less than the cash per share on the balance sheet. We also show the value of cash net debt per share to show how much cash per share would be left if the debt was paid off.

What this Means…

Companies can have more cash per share than the actual share price for a number of reasons including they just raised capital, are in industries that experience high burn rates and will eat through the cash quickly or if there is a lot of uncertainty about the future of the company. Companies earning a positive net income will have a P/E greater than 0 and are worth exploring in more detail.

Today’s Data on TSE

Today’s data is for companies listed on the Toronto Stock Exchange.

Symbol	Name	Close Price	Shares Outstanding	P/E	P/B	Cash per Share	Net Cash per Share
GMP	GMP Capital Inc	4.390000	89868671	None	1.7763	4.71	3.99
TRZ	Transat A.T. Inc	5.100000	36859165	None	0.4048	9.87	13.98
LTS	Lightstream Resources Ltd	0.115000	198992000	None	None	0.20	-1.60
ZAR	Zargon Oil & Gas Ltd	0.700000	30607000	None	0.4132	0.90	-1.92
RMX	Rubicon Minerals Corp	0.045000	394928246	None	None	0.06	-0.15
CZQ	Continental Precious Minerals Inc	0.275000	11706896	None	0.5699	0.48	None
GII.UN	Global Diversified Investment Grade Income Trust II	0.210000	9778651	10.5000	0.7582	0.26	None
LRT.UN	Lanesborough Real Estate Investment Trust	0.055000	20557320	None	0.1848	0.06	-11.73
PNC.B	Postmedia Network Canada Corp	0.600000	1874639	None	None	9.14	-339.27
PNC.A	Postmedia Network Canada Corp	0.530000	1874639	None	None	9.14	-339.27
MNT	Royal Canadian Mint	16.050000	4000	0.0017	0.0002	23651.75	11260.75
MNS	Royal Canadian Mint	12.850000	4000	0.0013	0.0002	23651.75	11260.75
CSF	Cash Store Financial Services Inc	0.135000	17571813	None	None	0.60	-7.59
STP	Southern Pacific Resources Corp	0.005000	397959000	None	None	0.07	-1.38

Let’s look at a few companies…

Lets look at a couple of the companies on this list to get a better understanding of them.

GMP:TSE GMP Capital

http://www.gmpcapitaltrust.com
GMP Capital has 313 employees and is headquartered in Canada.
GMP Capital Inc is a Canadian independent investment dealer serving corporate, institutional and individual clients. The Company’s integrated business segments include: Capital Markets and Wealth Management.

TRZ:TSE Transat A.T.

http://www.transat.com
Transat A.T. has 5000 employees and is headquartered in Canada.
Transat A.T. Inc is an integrated international tour operator in the Americas. It conducts its activities in the holiday travel industry and markets its products in the Americas and Europe.

Free Valuation

Run a valuation on any of the companies listed above at www.stockcalc.com/valureport.aspx.

The content presented here is in part from the website stockcalc.com and is provided on an as is or as available basis with all faults and may not be current in all cases. You should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment decision.

Stocks Trading at Less than Cash Value

Stocks Trading at Less Than Cash Value on the AMEX for 2016-12-21

December 21, 2016 Brian Donovan

I have used the analysis tools on the website stockcalc.com to generate some of the content of this blog post. These tools and reports are available for free at www.stockcalc.com/TopPicks.aspx.

Trading at Less than Cash Value

What this Means…

Today’s Data on AMEX

Today’s data is for companies listed on the American Stock Exchange.

Symbol	Name	Close Price	Shares Outstanding	P/E	P/B	Cash per Share	Net Cash per Share
LEU	Centrus Energy Corp	6.010000	9000000	None	None	18.98	-7.03
NSPR	InspireMD Inc	2.790000	1432542	None	0.6417	7.31	4.76
IMUC	ImmunoCellular Therapeutics Ltd	2.220000	3444895	None	0.6575	4.44	None
BRN	Barnwell Industries Inc	1.700400	8277160	28.3400	0.8467	2.11	2.11
SSY	SunLink Health Systems Inc	1.050100	9443408	None	0.4395	1.36	0.42
MSN	Emerson Radio Corp	0.949400	27129832	None	0.4767	1.44	0.97
ALN	American Lorain Corp	0.590000	38274490	59.0000	0.1147	0.98	-0.62
PLX	Protalix BioTherapeutics Inc	0.301600	123777137	None	None	0.41	-0.17
MPO	Midstates Petroleum Co Inc	0.140100	24699900	None	None	11.32	-74.90

Let’s look at a few companies…

Lets look at a couple of the companies on this list to get a better understanding of them.

LEU:ASE Centrus Energy

http://www.centrusenergy.com
Centrus Energy has 446 employees and is headquartered in United States.
Centrus Energy Corp is engaged in supplying low enriched uranium (LEU) for commercial nuclear power plants. The LEU is used for the production of nuclear fuel for reactors to produce electricity.

IMUC:ASE ImmunoCellular

http://www.imuc.com
ImmunoCellular has 10 employees and is headquartered in United States.
ImmunoCellular Therapeutics Ltd is a clinical-stage biotechnology company that develops immune-based therapies for the treatment of cancers, such as brain, ovarian and other solid tumors.

Free Valuation

Run a valuation on any of the companies listed above at www.stockcalc.com/valureport.aspx.

Stocks Trading at Less than Cash Value

Stocks Trading at Less Than Cash Value on the NASDAQ for 2016-12-20

December 20, 2016 Brian Donovan

I have used the analysis tools on the website stockcalc.com to generate some of the content of this blog post. These tools and reports are available for free at www.stockcalc.com/TopPicks.aspx.

Trading at Less than Cash Value

What this Means…

Today’s Data on NASDAQ

Today’s data is for companies listed on the NASDAQ.

Symbol	Name	Close Price	Shares Outstanding	P/E	P/B	Cash per Share	Net Cash per Share
MPEL	Melco Crown Entertainment Ltd	16.110000	400	68.8462	2.3714	4078617.50	-6134680.00
TEDU	Tarena International Inc	15.190000	55944298	26.0015	4.0542	18.31	None
FXCM	FXCM Inc	8.750000	5602559	17.1569	None	168.78	106.43
CZR	Caesars Entertainment Corp	7.500000	146962562	None	None	11.36	-34.95
SPU	SkyPeople Fruit Juice Inc	7.390000	4061090	8.3977	0.1685	12.31	-0.05
SGNL	Signal Genetics Inc	6.760000	741562	None	1.0698	7.22	5.73
BEBE	bebe stores Inc	5.660000	8007991	None	0.3739	5.90	11.41
NVTR	Nuvectra Corp	5.330000	10309065	None	0.5442	7.34	6.02
ROKA	Roka Bioscience Inc	4.640000	1841121	None	0.2279	4.87	1.09
TTPH	Tetraphase Pharmaceuticals Inc	4.320000	36904415	None	0.9992	4.39	5.58
GECXU	Great Elm Capital Group Inc	4.100000	11627964	None	1.4194	5.37	2.95
CYCC	Cyclacel Pharmaceuticals Inc	4.050000	4251229	None	1.0163	4.24	2.70
ABAC	Aoxin Tianli Group Inc	3.690000	7988245	16.7727	0.3393	6.85	6.51
GLBL	TerraForm Global Inc	3.550000	178053405	None	0.7243	6.23	-0.74
SBSA	Spanish Broadcasting System Inc	3.550000	6507344	None	None	4.21	-38.28
ADVM	Adverum Biotechnologies Inc	3.100000	41718515	None	0.5475	5.54	1.21
GIGM	GigaMedia Ltd	2.939900	11052235	None	0.5161	6.13	5.90
PTX	Pernix Therapeutics Holdings Inc	2.820000	9499812	None	None	3.00	-28.74
APWC	Asia Pacific Wire & Cable Corp Ltd	2.600000	13819669	11.8182	0.2491	3.09	0.44
ONTX	Onconova Therapeutics Inc	2.410000	6759895	None	1.7737	3.81	None
CADC	China Advanced Construction Materials Group Inc	2.200000	2387658	None	0.3281	3.45	-12.69
EVK	Ever-Glory International Group Inc	2.150300	14787940	3.9096	0.3982	2.59	-0.78
CXRX	Concordia International Corp	2.150000	51017004	None	0.3643	3.19	-60.38
VRTB	Vestin Realty Mortgage II Inc	2.110000	2384179	None	0.5178	2.17	2.13
GURE	Gulf Resources Inc	2.100000	46789137	2.6250	0.2746	3.02	2.96

Let’s look at a few companies…

Lets look at a couple of the companies on this list to get a better understanding of them.

MPEL:NAS Melco Crown Entertainment

http://www.melco-crown.com
Melco Crown Entertainment has 21414 employees and is headquartered in Hong Kong.
Melco Crown Entertainment Ltd is developer, owner and operator of casino gaming and entertainment resort facilities in Asia. Its segments are City of Dreams, Altira Macau, Studio City, Mocha Clubs, Corporate and Others, and City of Dreams Manila.

FXCM:NAS FXCM

http://www.fxcm.com
FXCM has 804 employees and is headquartered in United States.
FXCM Inc is an online provider of foreign exchange trading and related services to retail and institutional customers. It offers its customers the ability to trade contract for differences, spread betting, equities and equity options.

Free Valuation

Run a valuation on any of the companies listed above at www.stockcalc.com/valureport.aspx.

Stocks Trading at Less than Cash Value

Stocks Trading at Less Than Cash Value on the NYSE for 2016-12-19

December 19, 2016 Brian Donovan

I have used the analysis tools on the website stockcalc.com to generate some of the content of this blog post. These tools and reports are available for free at www.stockcalc.com/TopPicks.aspx.

Trading at Less than Cash Value

What this Means…

Today’s Data on NYSE

Today’s data is for companies listed on the New York Stock Exchange.

Symbol	Name	Close Price	Shares Outstanding	P/E	P/B	Cash per Share	Net Cash per Share
SD	SandRidge Energy Inc	23.450000	20575551	None	None	31.72	30.82
NOAH	Noah Holdings Ltd	21.740000	56143076	14.1635	2.7072	31.29	21.79
CGG	CGG	15.060000	22133149	0.2352	0.2421	27.27	-104.10
INFY	Infosys Ltd	14.900000	2285651730	16.1890	3.5642	138.83	1.98
DYN	Dynegy Inc	8.710000	117293478	None	0.5641	12.43	-68.76
JP	Jupai Holdings Ltd	8.670000	29931126	17.3150	1.2348	31.81	None
MN	Manning & Napier Inc	8.050000	15003880	12.0149	0.7232	8.25	5.41
CX	Cemex SAB de CV	7.990000	448922222	23.4814	0.5166	49.00	-574.87
SGY	Stone Energy Corp	7.750000	5690253	None	None	32.05	-216.75
ATV	Acorn International Inc	6.320000	3826556	None	0.2150	7.94	6.84
MTL	Mechel PAO	6.090000	208135372	None	None	11.29	-2229.19
WMLP	Westmoreland Resource Partners LP	5.610000	1221060	None	None	7.26	-251.46
XIN	Xinyuan Real Estate Co Ltd	5.350000	66708803	4.6930	0.3800	13.91	-20.29
PACD	Pacific Drilling SA	4.930000	21183000	1.8012	0.0388	17.52	-125.08
ENIC	Enel Chile SA	4.610000	981855455	20.1530	1.0832	146.93	125.88
SDLP	Seadrill Partners LLC	4.370000	91821600	1.4581	0.3654	8.11	-31.51
JMEI	Jumei International Holding Ltd	4.260000	146634596	36.0245	1.1932	17.49	17.45
TDW	Tidewater Inc	4.110000	47068079	None	0.0950	14.34	-29.03
OSG	Overseas Shipholding Group Inc	3.860000	70195146	3.0541	0.1915	4.46	-9.52
UTI	Universal Technical Institute Inc	3.340000	24624434	None	0.6020	4.83	3.05
I	Intelsat SA	3.030000	117800000	None	None	8.13	-120.43
MFCB	MFC Bancorp Ltd	2.150000	63142272	1.3987	0.5347	3.78	-3.09
BCEI	Bonanza Creek Energy Inc	1.680000	49672252	None	0.9846	2.69	-17.90
NM	Navios Maritime Holdings Inc	1.270000	117127796	None	0.1601	1.35	-12.50
CGA	China Green Agriculture Inc	1.250000	37648605	1.8657	0.1249	2.87	2.57

Let’s look at a few companies…

Lets look at a couple of the companies on this list to get a better understanding of them.

SD:NYS SandRidge Energy

http://www.sandridgeenergy.com
SandRidge Energy has 1165 employees and is headquartered in United States.
SandRidge Energy Inc is an oil and natural gas company engaged in exploration, development and production activities in the Mid Continent, Gulf of Mexico and Gulf Coast.

CGG:NYS CGG

http://www.cgg.com
CGG has 7277 employees and is headquartered in France.
CGG is a manufacturer of geophysical equipment. It provides geoscience services, including data imaging, seismic data characterization, geoscience and petroleum engineering consulting services, and collecting, developing and licensing geological data.

Free Valuation

Run a valuation on any of the companies listed above at www.stockcalc.com/valureport.aspx.

Valuation

Value a Stock in 4 Easy Steps

December 31, 2015 Brian Donovan Leave a comment

Determining what a stock is worth does not have to be a complicated process if you have the right tools to help you. There are 4 steps to generating a valuation using the Stockcalc website. www.stockcalc.com

In the last blog we outlined the process involved
https://www.stockcalc.com/blog/BrianD/2015/12/21/how-to-calculate-what-a-stock-is-worth/

In this we will dig a little more into the 4 steps: I am using the Stockcalc website to do these calculations and for full disclose am company President.

The 4 Steps (once you have selected a company)
1) Determine what the cost is for the funds needed to run and grow the business. We call this the Weighted Average Cost of Capital or WACC. Large, stable companies have a lower WACC than more speculative companies.
2) Forecast the company’s financials into the future based on assumptions you have or are able to get from Analysts that cover the company. We have a number of forecasting tools on the site starting with Analyst forecasts and Growth projections all the way to using a blank page and creating the forecast yourself.
3) Value the company using Valuation models such as a Discounted Cash Flow (DCF) where you include the financial forecasts, WACC and other calculations and assumptions such as Capital Expenditures needed and Debt levels. The site has a full DCF framework for you to calculate with and auto-populates each cell to get you started.
4) Test your assumptions, see how sensitive the company is to the inputs. Testing your assumptions is a critical part of valuation work. When you get a different valuation than you see a company is trading for on the stock exchange you need to ask why, and test. You may have uncovered an opportunity.

Here is a valuation I recently did for Lowes Companies Inc. using this 4 step process.
https://www.stockcalc.com/blog/BrianD/2015/12/21/lowes-companies-inc-low-fundamental-valuation-using-analyst-forecast-data /

And here is the process explained on Video for Alphabet (GOOG)
https://www.youtube.com/watch?v=V5194KeW_d0

Valuation is part art, part science. The assumptions you make impact the company’s value. For example, if you think the WACC is 8% instead of 9% the company will calculate to be more valuable because its cost to service its capital will be lower.

Here is a tool you can use for free to quickly test your assumptions :
www.stockcalc.com/dcf.aspx
Simply load a symbol or name into the Symbol text box and select the company from the dropdown. Test the valuation by changing the growth rates, WACC, Free Cash Flows etc.

Next Steps:
If you are not sure where to begin you can select a company you are familiar with (GOOG, AAPL) and work though the steps above on the Stockcalc site. Each of these steps are found on the Research Page which you can access either by clicking the Research Button or selecting Research from the dropdown menu next to the Stockcalc logo (both are on the Dashboard)

About Stockcalc:
If you would like to explore the Stockcalc website and quickly run valuations like simply create an account at www.stockcalc.com (Start with a 14 day free trial) Use the walk-throughs (click the walking man icon), videos (video icon on each page) or the help menu to help navigate the site. The site has a number of tools for data query, backtesting, forecasting and valuation. We have a no restrictions Stockcalc 14 Day Free Trial available as well.
If you would like the above valuation to test simply send us a note from Stockcalc’s “Contact Us” on the dashboard.

Uncategorised, Valuation

Lowes Companies Inc. (LOW) Fundamental Valuation using Analyst Forecast Data

December 21, 2015 Brian Donovan 1 Comment

I used the Stockcalc website (www.stockcalc.com) to run a fundamental analysis for Lowes Companies (LOW:NYS)

Process:
I ran a Weighted Average Cost of Capital with the WACC Tool
I loaded the Analyst Estimate Data and used it to generate an Income Statement Forecast for 2016 to 2018
I then ran a Discounted Cash Flow with that Data.

The following screens show the steps:

Calculation of WACC for LOW:NYS

Lowes Companies WACC — The weighted average cost of capital for Lowes Companies (LOW:NYS)

This resulted in a WACC value of 8.78 for Lowes Companies Inc.

Next I loaded the Analyst Estimate Data and used it to generate an Income Statement Forecast for 2016 to 2018

LOW Analyst Estimates — Average Analyst Estimates for Lowes Companies Inc. (LOW:NYS)

LOW:NYS Income Statement — Income Statement Forecast for Lowes Companies Inc. (LOW:NYS)

I then loaded a Discounted Cash Flow using the above inputs

LOW:NYS DCF — Discounted Cash Flow Analysis for Lowes Companies (LOW:NYS)

Note – Stockcalc provides default or historic values to generate the initial valuation calculation- the user can then adjust based on their expectations:

Adjustments:
The cash flow values were taken directly from the Analyst estimates. I reviewed the historic Capex figures and adjusted the ongoing Capital Expenditures to 0.9 billion from an average of 1.2 billion last 5 years based predominately on the last 2 years figures of 0.9 and 0.8 billion. I also adjusted the terminal growth rate from the default of 3.0 to 3.4 given the Analyst projection for the next 3 years are 11% growth in EBITDA. These 2 adjustments resulted in a value of $74 per share. I am not aware if there are redundant assets that would add to company value.

The Analyst Mean Target Price for 2017 is $80.86. This can be seen on the Average Analyst Estimates above. To achieve that value I would need to increase the terminal value to 4.0 % per year in the discounted cash flow model.

Company Information:
Lowe’s Companies Inc. was incorporated in North Carolina in 1952 and has been publicly held since 1961. It is a Fortune(r) 100 company and a home improvement retailer. As of January 31, 2014, Lowe’s operated 1,832 home improvement and hardware stores in the United States, Canada and Mexico representing approximately 200 million square feet of retail selling space. The Company serves homeowners, renters and commercial business customers (Pro customer).

About Stockcalc:
If you would like to explore the Stockcalc website and quickly run valuations like simply create an account at www.stockcalc.com . Use the walk-throughs (click the walking man icon), videos (video icon on each page) or the help menu to help navigate the site. The site has a number of tools for data query, backtesting, forecasting and valuation. We have a no restrictions 14 day free trial available. If you would like the above valuation to test simply send us a note from Stockcalc’s “Contact Us” on the dashboard.

Uncategorised, Valuation

How sensitive are companies to rising interest rates?

December 19, 2015 Brian Donovan Leave a comment

The talk of will they or won’t they raise rates has been ongoing for more than 2 years now. We have to expect either rates get raised at some point, we stumble along on the current path or we end up in deflationary times. I want to explore the more optimistic of these scenarios and its impact on stock valuations: the economy improves and rates start to rise.

To look at this in detail I am using www.stockcalc.com (Disclaimer: I am the President of Patchell Brook Equity Analytics and we created Stockcalc.com precisely for this type of analysis and valuation)

I will examine Caterpillar as it has with a 59/41 Equity to Debt in the Capital Structure

Using Stockcalc I first create and save a WACC for CAT: (Research Menu, Valuation, WACC). Stockcalc does a first pass on WACC using default values which results in a WACC of 8.93.

Cost of Equity (Ke) 13.63 (Using CAPM), After Tax cost of Debt : 2.17, 59% Equity, 41% Debt

Next I load the Quick DCF tool so I can run the analysis (Research, Forecast, Analyst) (Note – the quick DCF is a testing and teaching tool, the other tools are more detailed in their analysis)

It is available for free at www.stockcalc.com/dcf.aspx or inside the Stockcalc.Com website

Value Per Share ($) Calculations for Caterpillar (CAT:NYS) using the Quick DCF tool on Stockcalc.com

Each change in WACC (8.93 – 9.34 – 9.75) implies a 1 % change in Cost of Debt. Growth rates are next 3 years and thereafter (5% and 3% in the first row for ex)

WACC	8.93	9.34	9.75
Growth rates 5,3%	70.02	61.28	53.60
Growth rates 6,4%	97.40	84.92	74.21
Growth rates 4,2%	50.55	44.08	38.30

(Current Price at the time of valuation (October 2015) was $69.34)

A 1% change in the Cost of Debt results in a 12.5% change in value per share. A 1% change in Growth rates results in a 28% change in Value per Share. A 1% change in WACC results in a similar 28% change in Value per Share.

Message: if interest rates are rising, growth prospects need to be rising at half the rate to keep this share price holding steady.

If you want to explore the Stockcalc software simply create an account at www.stockcalc.com and have a look around. Use the walk-throughs (click the walking man icon), videos (video icon on each page) and help menu to understand and navigate the site. The site contains a number of tools including screens, queries, backtests, forecasts and a variety of valuation methods.

Uncategorised, Valuation

It used to be a 6$ stock…

November 11, 2015 Brian Donovan Leave a comment

Checking Price versus Market Cap

I often see on chat rooms and bullboards investors discussing small caps with phrases like “but it used to be a 6 $ stock – I’ll buy it and wait for it to get back there”

Should they be looking at Price or Market Cap?

Side note: Here is an overview of Price vs Market cap from Khan Academy:

https://www.khanacademy.org/video/price-and-market-capitalization

In some sectors, notably junior mining companies, you need to look at Market Cap (Stock Price * Number of Shares outstanding) instead of share price as a potential upside if conditions return. Every time one of these junior companies does a reverse split it affects the market cap but may not be reflected in the price over time given their nature to fall off dramatically in tough times.

As a note, any company that goes through a reverse split falls for this math so if you think of buying a company because it “used to be a 6$ stock” please look to see if any reverse splits have occurred.

Here is a example of a small Canadian junior gold company that I ran using the www.stockcalc.com website – It hit a high of 12 Million market cap in 2008 and the adjusted stock price at that time was in the 1.20$ range (I say adjusted because as each reverse split occurs in order to have apples and apples the charts need to be adjusted to reflect the splits)

The company is currently trading at 13 cents with a market cap of less than 3.5 million.

Market Cap

Let look at 3 points in time here with the share consolidations accounted for:

Jan 1 2010: Market Cap 5.5 Million, Price 57 cents
Jan 1 2014: Market Cap 1.0 Million, Price 10 cents
Jan 1 2015: Market Cap 3.4 Million, Price 13 cents

From these we can calculate the (adjusted) # of shares as 10 Million each of 2010, 2014 and 26 Million in 2015. The company did a reverse split mid 2014 followed by a number of private placements.

Price – This chart shows the adjusted close prices for the company from 2008 to mid 2015.

Here is a zoomed in version of the price chart

So if we wanted to speculate thinking conditions were going to turn around for this junior mining company, how high could the share price go based on historical values?

If we look at the price chart we see the company would have been in the 50 to 60 cent range during 2010-2011 and may speculate it could return there if gold prices reverse higher. This would be a 4-5 times return compared to the 13 cents currently.

Conversely if we look at Market Cap: after the split Market Cap was 3.4 million. To return to the 5.5 million range we see a 60% return.

i.e if the company returned to full value as expressed by 2010-11 market cap it would only rise to 21 cents, not the 50 to 60 cent range it had seen previously.

Yes it is intuitive, just something to keep on your radar when looking at these smaller stocks.

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Value a Stock in 4 Easy Steps

Lowes Companies Inc. (LOW) Fundamental Valuation using Analyst Forecast Data

How sensitive are companies to rising interest rates?

It used to be a 6$ stock…

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