Wednesday, June 5, 2019

Factor Based Analysis, Mid Cap Adv/Mkt - Part 1

investment analysis looking for a gem
Ya, we're excited too.

Overview

This is a factor-based analysis looking at six mid-sized companies in the marketing and advertising space.  It will look at the relative strengths and weaknesses of the group members with the goal of finding a gem.

Peer Group:

Stock Name (Symbol)Last Price (May 31, 2019)Market Cap
Trade Desk, Inc. Class A(TTD:XNAS)$198.818.8429B
LiveRamp Holdings, Inc.(RAMP:XNYS)$51.383.4986B
Nielsen Holdings PLC(NLSN:XNYS)$22.738.0804B
Jcdecaux SA(JCDXF:OOTC)$27.805.9161B
Interpublic Group of Companies, Inc.(IPG:XNYS)$21.228.1952B
Groupon, Inc. Class A(GRPN:XNAS)$3.532.0050B

  Analysis Factors

This analysis will look at six factors:
  • Price Momentum
  • Quality
  • Growth
  • Income
  • Value
  • Profitability.

Price Momentum

This factor includes a long, medium and short-term measure.  Long term is the percentage price change over two years, medium is 12 month less one month price change and short-term is the price less three month moving average.  I'm going to look the market, the sector and then each stock in the group.


LongMediumShort
Market14%9%-4%
Sector (proxy S&P industrials)5%6%-6%
The conclusion I draw from this is to proceed with caution, as momentum appears to slowing and possibly reversing.
Let's look at all the individual stocks next.  I'm looking at the same long and medium term momentum measures, the short term measure is the price change less the 10 week moving average.  The chart below shows the value each stock calculated for the measure and below that its relative ranking compared to the group.  The higher the number, the better its rank.



LongMediumShortSumFinal Rank
TTD261%
6
159%
6
-2%
5
176
RAMP96%
5
99%
5
-8%
3
135
NLSN-41%
1
-15%
2
-9%
2
51
JCDXF-17%
2
3%
4
-10%
1
72
IPG-15%
3
2%
3
-4%
4
103
GRPN17%
4
-27%
1
0%
6
114
TTD had the best relative momentum score and definitely impressive results from an absolute perspective.  RAMP 's are good too.  Both are showing short term momentum weakness.

Tomorrow I'll review the quality and growth factors.

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