Factor-Based Analysis on Mid Cap Advertising/Marketing Firms, Part 2

Quality

The quality factor uses five measures:

Standard deviation of earnings - the lower the better,
Gross margin - the higher the better,
Net margin - the higher the better,
Sales/assets - the higher the better,
Financial leverage - the lower the better.

	SD	GM	NM	S/A	FL	Sum	Rank
TTD	.98 1	76% 6	18% 6	43% 1	0% 6	20	4
RAMP	.12 5	49% 5	3% 3	76% 5	23% 5	23	6
NLSN	.47 2	47% 3	-11% 1	43% 2	73% 1	9	1
JCDXF	.27 4	26% 2	7% 5	57% 3	36% 4	18	3
IPG	.32 3	12% 1	7% 4	62% 4	59% 2	14	2
GRPN	.11 6	48% 4	0% 2	161% 6	38% 3	21	5

Based on an equal ranking of the factors, RAMP comes out on top. This is a factor that you personally might want to weight differently. Perhaps you don't care about volatility in the stock price or you think a certain amount of debt is desirable. You then might make other choices for the highest quality stock.

Growth

This factor looks at the year over year growth rate in revenue, EBITDA, free cash flow and gross income margin.

	Revenue	EBITDA	FCF	GM	Sum	Final Rank
TTD	55% 6	55% 6	215% 6	-3% 2	20	6
RAMP	30% 5	1% 3	0% 4	23% 6	18	5
NLSN	-1% 2	-10% 1	-20% 3	-3% 1	7	1
JCDXF	9% 3	6% 4	-32% 2	-2% 3	12	2
IPG	23% 4	7% 5	-47% 1	0% 4	14	4
GRPN	-7% 1	1% 2	76% 5	8% 5	13	3

TTD and RAMP are in the top positions. I like TTD's results more - it's obviously higher than RAMP's but the individual components are also showing well, for the most part.

Tomorrow we'll cover income, value and profitability.

Comments

11 Reasons Why INVRS is Better Than Excel Alone

If you work with your own investment models you likely use excel to build them, but excel isn’t ideal for many reasons and it costs you in other ways. First, you need good data and it isn’t just lying around in an easy to import format. You’re either keying it in yourself or paying money for excel downloads. When you need data from numerous sources – price information, data from different statements and across multiple years - you must merge it from multiple sheets. It's a n inefficient process which can lead to data corruption. After all this data is collected and merged, models built and tested, the net result is one statistic for one company. A stand-alone number without context has limited use. To be meaningful, you need to compare it to similar companies. This is just a sample of the challenges. You need software that overcomes these problems and is designed for investment model creation. Surprise! This software exists,

NextEra - Good Dividend in the Renewable Energy Sector

NextEra had good results relative to a group of peers in a factor-based analysis. NextEra has an appealing profitability and income profile. Its price momentum looks decent, with a caveat. Its relatively small size (a small mid-cap) coupled with its industry (renewable energy) further weight the odds that this company could be a strong performer in the future. If you want in on renewable energy, we recommend NextEra. The Analysis Overview I created a portfolio of stocks in the alternative energy sector, looking specifically for companies with a market cap over $1B but less than $4B. This is a sweet spot that offers strong potential for growth but is also substantial enough not to be too speculative. It's my believe that alternative energy is on the ascendance, where as fossil fuels will inevitably decline (NextEra isn't a pure play in this regard however, natural gas assets are part of its portfolio). If you share this belief and you want exposure to this ma

Back-up for Gold Bulls Seeking Alpha Article

This blog is back up for my Gold Bulls: Eldorado Gold Scores High on Value article on Seeking Alpha. Leverage graph: Valuation Calculation Proven & Probable Resources Production Guidance Contained Gold 000 oz 2019 2020 2,019 2018 2020 - pandemic adjusted 2020-pre-pandemic 2020 guidance production costs/oz total cash costs/oz all-in sustaining/oz production costs/oz total cash costs/oz all-in sustaining/oz AEM 21,585 22039 1,680,000 1,875,000 1,680,000 735 673 938 765 1050 AGI 9,726 445,000 1010 790 1040 AUY 7,859 990,000

The INVRS Blog

Search This Blog