March 2011
March 28, 2011 –
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RELATED TICKERS: EBIX
The Company’s consolidated effective tax rate is reduced because of the blend of reduced tax rates in foreign
jurisdictions where a significant portion of our income resides. Furthermore, the Company’s world-wide product
development operations and intellectual property ownership has been centralized into our India and Singapore
subsidiaries, respectively. Our operations in India benefit from a tax holiday which will continue thru 2015; as such
local India taxable income, other than passive interest and rental income, is not taxed. After the tax holiday expires
taxable income generated by our India operations will be taxed at 50% of the normal 33.99% corporate tax rate for a
period of five years. This tax holiday had the effect of reducing tax expense by $11.5 million. [more]
March 25, 2011 –
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RELATED TICKERS: KO
, PEP
The Following Report is brought to you by Houdini Equity Research:
Coca-Cola Company is long known to be a wordwide brand with without equal and to have premium pricing power. However the brand is rapidly deteriating and the switch to healthier drinks and juices is lessening demand for their brands.a of lowered growth leads credibility to the possibility of the shares having a intrisic value much lower.
Reasons Why This Company is worth no more than 40 dollars a share is as follows:
Consumer Preference Shift
Consumers are shifting to juices and smoothies more and more leading
studies are showing that this consumer shift is leading to a slowdown in growth.
Substantial Debt Load
Total Debt is more than 14 billion giving the company a net debt position.
Managment Lacks Vision
Managment has made no substantial efforts to enhance or sustain growth in recent years.
Houdini Equity Research is a subsidary of Copperfield Research we are both are very fictitious and my Brother who runs Copperfield well no one likes him. [more]
March 24, 2011 –
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RELATED TICKERS: RMCF
What if I told you, you could have a piece of a company with solid double digit growth and a 4 percent dividend yet it was so small hardly anyone followed it? You would tell me such a company must be a mere fantasy however it is very real indeed. The Company is Rocky Mountain Chocolate Factory RMCF and it is indeed tiny with a market cap around 60 million. You can learn more about them here. The company although underfollowed offers a compelling opportunity for opportunistic longs. Solid growth at a reasonable price with the added bonus of an above average dividend yield leaves no doubt in my mind this is one of the best opportunities in the market today. Among the reasons this company is a solid buy are: [more]
March 24, 2011 –
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RELATED TICKERS: EBIX
The cheapest stock in the market [more]
March 24, 2011 –
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RELATED TICKERS: EBIX
Ebix Response to Stock Price Drop
ATLANTA, Mar 24, 2011 (BUSINESS WIRE) -- Ebix, Inc. (EBIX) a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today stated that it had received calls from shareholders regarding the sudden drop in the price of its common stock as quoted on NASDAQ. The Company stated that it is not aware of any negative developments within the Company or in its operations that would warrant in such a sudden drop in the price of its stock. [more]
March 10, 2011 –
I thought this was interesting yes my blog is a free enertainment hub today..lol
March 02, 2011 –
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RELATED TICKERS: LINC
, OLN
Not Investing Rrlated but some awesome pearls of wisdom regardless. [more]
March 01, 2011 –
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RELATED TICKERS: GMCR
, KO
, PEP
Green Mountain Coffee Roasters GMCR is a company that is demanding a premium from the market. It has been argued the trailing valuation looks expensive so this is an obvious short. Unfortunately this view leaves out the wild card of the hyper growth model. Even better their business model is based on the razor and razor blade methodology. Having a recurring revenue stream greatly reduces their overall risk as Keurig seems to be growing ever more popular every day. Operating income has grown from $18.1m in 2006 to $138.8m in fiscal 2010, and net income per share has grown from 8 cents per diluted share to 58 cents per diluted shares. This level of consistent year over year performance is worth paying a premium for. In my opinion their stock is still cheap and represents a compelling play in the specialty coffee market. I know I am arguing that a stock trading at 80 times trailing earnings is cheap and you will want to see a pretty compelling argument as to why I believe this. I implore you if you are short read this article and close out your position. You can learn more about the company here. My reasons for why the stock is cheap are stated below.
Brand Recognition
A brand name really cannot be given an arbitrary number. Green Mountain and its collection of brands are well known, loved and its consumer base is not price sensitive giving them premium pricing power. I personally have had fellow college students tell me they love the coffee. Popular specialty brands include Green Mountain Coffee Roasters, Newman's Own and the newly acquired Canadian presence Van Houte.The company even raised prices recently and yet sales continue to be strong. Brand loyalty is priceless.
Management
Insiders hold a good number shares and their founder still has a substantial stake. This large amount of share ownership aligns management to act in a way that creates value for shareholders. Return on equity and return on investments is positive with return on equity above 12 percent. Book value has consistently grown over the years as well.
Valuation Compared To Growth
Trailing metrics look expensive but when you look at forward metrics the valuation improves dramatically. Green Mountain trades at 33 times forward earnings while still growing at more than 50 percent. In the most recent quarter and even for this past year revenues grew at 67 percent while earnings grew at nearly a 70 percent rate. A price to earnings growth ratio below 1 usually gives you a stock that is noticeably cheap.
Discounted Cash Flow Analysis
A ten year cash flow analysis assuming a moderate slowing of growth places fair value at 53 dollars a share. This is assuming current growth slows as of right now growth is accelerating. Book value is 6.77 a share and the assumptions used were half of the current growth rate. Fair Value may even be higher than my calculation.
Conclusion
Trailing metrics might look expensive but in all honesty Green Mountain's valuation is quite reasonable. Apply some forward thinking and when combined with a strong and growing brand this makes Green Mountain Coffee Roasters a compelling buy today. [more]
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