Thursday, June 6, 2019

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

fundamental analysis

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.


SDGMNMS/AFLSumRank
TTD.98
1
76%
6
18%
6
43%
1
0%
6
204
RAMP.12
5
49%
5
3%
3
76%
5
23%
5
236
NLSN.47
2
47%
3
-11%
1
43%
2
73%
1
91
JCDXF.27
4
26%
2
7%
5
57%
3
36%
4
183
IPG.32
3
12%
1
7%
4
62%
4
59%
2
142
GRPN.11
6
48%
4
0%
2
161%
6
38%
3
215

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.


RevenueEBITDAFCFGMSumFinal Rank
TTD55%
6
55%
6
215%
6
-3%
2
206
RAMP30%
5
1%
3
0%
4
23%
6
185
NLSN-1%
2
-10%
1
-20%
3
-3%
1
71
JCDXF9%
3
6%
4
-32%
2
-2%
3
122
IPG23%
4
7%
5
-47%
1
0%
4
144
GRPN-7%
1
1%
2
76%
5
8%
5
133

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.

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