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Discover and validate investing ideas with valuation models and charts.

Too Late To Buy Salem Media Group, Inc. (NASDAQ: SALM)?

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Salem Media Group, Inc. (NASDAQ: SALM) investors have enjoyed seeing the stock price increase by 39.7% over the last month. As a small-cap stock, hardly covered by analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. However, could the stock still be trading at a relatively cheap price? Let’s take a look at the company’s expected growth and valuation based on its most recent financial data to see if there is further upside moving forward.


What’s The Opportunity In Salem?

Welcoming news for investors, Salem is still trading at a fairly cheap price. According to our 9 valuation analyses, the intrinsic value for the stock is $6.45 per share and is currently trading at $5.30 in the market. This means that there is still an opportunity to buy now.

Salem Media Group, Inc. Valuation Detail
Analysis Model Fair Value Upside (Downside)
10-yr DCF Revenue Exit $5.49 3.5%
5-yr DCF Revenue Exit $4.48 -15.4%
Peer Revenue Multiples $7.40 39.5%
10-yr DCF EBITDA Exit $7.81 47.4%
5-yr DCF EBITDA Exit $7.82 47.6%
10-yr DCF Growth Exit $6.88 29.8%
5-yr DCF Growth Exit $6.48 22.3%
Peer P/E Multiples $7.27 37.1%
Dividend Discount Model $4.46 -15.8%
Average $6.45 21.8%

Click on any of the analyses above to view the latest model with real-time data.

What’s more interesting is that Salem’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.


Can We Expect Growth From Salem?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matters the most, a more compelling investment thesis would be high growth potential at a cheap price.

Salem projected ebitda chartsource: finbox.io data explorer

With Salem’s relatively muted EBITDA growth of 2.4% expected over the next five years on average, growth doesn’t seem like a key catalyst for a buying decision, at least in the short to medium-term.


What This Means For Investors

Growth investors typically look to invest in companies that are expanding sales, gaining market share and building customer bases. On the other hand, value investors often argue that the most successful investments are in companies that deliver the highest cash flows while trading at the lowest valuation.

But why not put those hands together? A company that has both growth and value characteristics would certainly make the most attractive investment. So what did we find out about Salem?

Although Salem’s future growth is relatively low, the company’s stock still appears to be trading at a discount to its intrinsic value. Therefore, it may be a great time to purchase shares or add more to your existing holdings.

It is important to note that there are a variety of other fundamental factors that I have not taken into consideration in this article. If you have not done so already, I highly recommend that you complete your research on Salem by taking a look at the following:

Valuation Metrics: what is Salem’s EBITDA less CapEx multiple and how does it compare to its peers? This is a helpful multiple to analyze when comparing capital intensive businesses. View the company’s EBITDA less CapEx multiple here.

Risk Metrics: what is Salem’s asset efficiency? This ratio measures the amount of cash flow that a company generates from its assets. View the company’s asset efficiency here.

Efficiency Metrics: is management becoming more or less efficient in creating value for the firm? Find out by analyzing the company’s return on invested capital ratio here.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

Here Are 7 Out Of Favor Stocks In Blue Harbour Group’s Portfolio

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Here are the stocks in Clifton Robbins’ portfolio which have traded lower over the last month. Investors may want to take a closer look at the names below.


Blue Harbour Group’s Recent Price Pull-Back Stocks

To find stocks in the firm’s portfolio that may be unpopular at the moment and trading at cheap valuations, I ranked the firm’s holdings by price pullbacks. The ranking table below lists the stocks in Blue Harbour Group’s portfolio by stock price performance over the last 30 days.

Blue Harbour Group Recent Price Pull-Back Stocks
Ticker Name Price 1-mo Ago Current Price % Change 1-mo
ON ON SEMICONDUCTOR CORP $25.75 $22.52 -12.6%
XLNX XILINX INC $70.37 $65.88 -6.4%
WCC WESCO INTL INC $60.55 $57.65 -4.8%
MDRX ALLSCRIPTS HEALTHCARE SOLUTN $12.75 $12.16 -4.6%
MD MEDNAX INC $45.25 $43.56 -3.7%
ISBC INVESTORS BANCORP INC NEW $13.43 $12.99 -3.3%
COMM COMMSCOPE HLDG CO INC $29.79 $29.44 -1.2%

ON Semiconductor Corporation (NASDAQ: ON) stock price has fallen by -12.6% over the last month. It may be worth taking a closer look at the stock, especially after this recent decline.

The next largest stock decline in Clifton Robbins’s portfolio is Xilinx, Inc. (NASDAQ: XLNX) which has seen its share price fall by -6.4% over the last month. Other notable holdings with a recent pull-back include WESCO International, Inc. (NYSE: WCC), Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX), Mednax, Inc (NYSE: MD), Investors Bancorp, Inc. (NASDAQ: ISBC) and CommScope Holding Company, Inc. (NASDAQ: COMM).


Why Follow Clifton Robbins’s Portfolio?

Clifton Robbins is a highly respected activist investor and the founder and CEO of Blue Harbour Group. While Blue Harbour is an activist investor, the company stresses that it only works collaboratively with management. In fact, the firm prides itself on the fact that it has never engaged in a proxy war or waged a media campaign against a company.

Before founding Blue Harbour, much of Clifton’s career was in private equity which appears to come through in his approach to investing. He likes to think like an owner, and ask the question: “if we owned the whole company what would we do differently?”

Robbins has a specific niche that he operates in. He looks for companies worth less than $10 billion where he believes the management team is strong but may not be aware of all the ways they can unlock value. He is only interested in working with leaders who are receptive to his ideas. Robbins has also stated he is not interested in fixing broken companies.

His focus therefore is on unlocking value in quality, well managed companies that he thinks are being undervalued by the market. Blue Harbour encourages companies to improve shareholder value by enhancing capital allocation strategies, executing strategic initiatives, and aligning management and shareholder interests. With a solid track record, it is worth taking a deeper look into his current equity holdings.

Managers with more than $100 million in qualifying assets under management are required to disclose their holdings to the SEC each quarter via 13F filings. Qualifying assets include long positions in U.S. equities and ADRs, call/put options, and convertible debt securities. Shorts, cash positions, foreign investments and other assets are not included. It is important to note that these filings are due 45 days after the quarter end date. Therefore, Blue Harbour Group’s holdings above represent positions held as of March 31st and not necessarily reflective of the fund’s current stock holdings.

However, most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of the largest hedge funds on Wall Street can be a powerful way to narrow down the list.

The ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Blue Harbour Group page.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

Restaurant Brands International Inc. (NYSE: QSR) and Chipotle Mexican Grill, Inc. (NYSE: CMG) Among Best Pershing Square Growth Stocks

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Here are the stocks in Bill Ackman’s portfolio that are significantly growing their revenues. Investors may want to take a closer look at the names below.


Pershing Square’s Fastest Growing Stocks

Analysts often look at companies as either thriving, surviving or dying. Analyzing a company’s revenue growth can help distinguish between these stages. Growth of over 10% typically signifies the core business is doing very well and the company’s products and services are in demand.

The table below lists 5 stocks in Pershing Square’s portfolio that have strong top-line growth.

Pershing Square Fastest Growing Stocks
Ticker Name Revenue Growth % Of Portfolio
QSR RESTAURANT BRANDS INTL INC 14.2% 28.6%
CMG CHIPOTLE MEXICAN GRILL INC 10.1% 19.3%
ADP AUTOMATIC DATA PROCESSING IN 7.0% 18.7%
PAH PLATFORM SPECIALTY PRODS COR 7.0% 8.1%
UTX UNITED TECHNOLOGIES CORP 6.2% 5.1%

Restaurant Brands International Inc. (NYSE: QSR) is the fastest growing company in Pershing Square’s portfolio. The company’s LTM total revenue of $4,829 million is up 14.2% year-over-year. Very impressive. Note that the stock price is down -1.8% over the last twelve months.

Chipotle Mexican Grill, Inc. (NYSE: CMG) appears to be the second highest growth stock in the portfolio. The company’s latest top-line improvement of 10.1% is very intriguing. With 7.0% LTM sales growth, Automatic Data Processing, Inc. (NASDAQ: ADP) is the third fastest growing company in Bill Ackman’s portfolio.


Why It’s Worth Monitoring Pershing Square Holdings

Managers with more than $100 million in qualifying assets under management are required to disclose their holdings to the SEC each quarter via 13F filings. Qualifying assets include long positions in U.S. equities and ADRs, call/put options, and convertible debt securities. Shorts, cash positions, foreign investments and other assets are not included. It is important to note that these filings are due 45 days after the quarter end date. Therefore, Pershing Square’s holdings above represent positions held as of March 31st and not necessarily reflective of the fund’s current stock holdings.

However, most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of the largest hedge funds on Wall Street can be a powerful way to narrow down the list.

The ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Pershing Square page.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

At $24.52, Is Camping World Holdings, Inc. (NYSE: CWH) A Buy?

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Shares of Camping World Holdings, Inc. (NYSE: CWH) are receiving a lot of investor interest as of late due to the stock’s 29.4% increase over the last month. Shareholders are now asking themselves whether the company’s current stock price is reflective of its true value or if shares have even further upside from here.

Let’s take a look at Camping World’s value and outlook based on its most recent financial data to see if there are any catalysts for a price change.


What Is Camping World Worth?

Welcoming news for investors, Camping World is still trading at a fairly cheap price. According to our 11 valuation analyses, the intrinsic value for the stock is $32.57 per share and is currently trading at $24.52 in the market. This means that there is still an opportunity to buy now.

Camping World Holdings, Inc. Valuation Detail
Analysis Model Fair Value Upside (Downside)
10-yr DCF Revenue Exit $40.11 63.6%
5-yr DCF Revenue Exit $41.06 67.5%
Peer Revenue Multiples $32.20 31.3%
10-yr DCF EBITDA Exit $35.35 44.1%
5-yr DCF EBITDA Exit $34.56 41.0%
Peer EBITDA Multiples $25.38 3.5%
10-yr DCF Growth Exit $36.36 48.3%
5-yr DCF Growth Exit $35.94 46.6%
Peer P/E Multiples $21.64 -11.8%
Dividend Discount Model (multi-stage) $16.24 -33.8%
Earnings Power Value $39.48 61.0%
Average $32.57 32.9%

Click on any of the analyses above to view the latest model with real-time data.

What’s more interesting is that Camping World’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.


How Much Growth Will Camping World Generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations.

Camping World projected revenue chartsource: finbox.io data explorer

With Camping World’s relatively muted top-line growth of 8.2% expected over the next five years on average, growth doesn’t seem like a key catalyst for a buying decision, at least in the short to medium-term.


Next Steps

While many investors tend to categorize stocks as either value or growth plays, the most successful investors view growth in conjunction with a company’s value. Take legendary investor Peter Lynch for example, who is widely known for popularizing the term growth at a reasonable price (GARP).

GARP is a strategy that combines aspects of both growth and value investing techniques by finding high growth companies that don’t trade at overly high valuations. In the application of this strategy, Lynch achieved 29% annualized returns as the manager of Fidelity’s Magellan Fund from 1977 to 1990. Needless to say the importance of analyzing a company’s fair value in addition to its growth prospects.

Although Camping World’s future growth is relatively low, the company’s stock still appears to be trading at a discount to its intrinsic value. Therefore, it may be a great time to purchase shares or add more to your existing holdings.

However, if you have not done so already, I highly recommend you complete your research on Camping World by taking a look at the following:

Efficiency Metrics: fixed asset turnover is calculated by dividing revenue by average fixed assets. View Camping World’s fixed asset turnover here.

Risk Metrics: how much interest coverage does Camping World have? This is a ratio used to assess a firm’s ability to pay interest expenses based on operating profits (EBIT). View the company’s interest coverage here.

Valuation Metrics: what is Camping World’s short ratio and how does it compare to its publicly traded peers? It represents the percentage of total shares outstanding that is being shorted. View the short ratio here.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

7 Stocks Chuck Akre Owns That Are Worth Considering For Your Portfolio

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Akre Capital Management released its quarterly 13F filing with the SEC on May 15th. After recent market losses, these are the stocks in the fund’s portfolio worth considering now.


Akre Capital Management’s Recent Price Pull-Back Stocks

To find stocks in the firm’s portfolio that may be unpopular at the moment and trading at cheap valuations, I ranked the firm’s holdings by price pullbacks. The ranking table below lists the stocks in Akre Capital Management’s portfolio by stock price performance over the last 30 days.

Akre Capital Management Recent Price Pull-Back Stocks
Ticker Name Price 1-mo Ago Current Price % Change 1-mo
AMTD TD AMERITRADE HLDG CORP $60.13 $55.04 -8.5%
ALRM ALARM COM HLDGS INC $45.16 $41.41 -8.3%
BRK.B BERKSHIRE HATHAWAY INC DEL $192.23 $187.64 -2.4%
DHIL DIAMOND HILL INVESTMENT GROU $198.00 $194.49 -1.8%
BRK.A BERKSHIRE HATHAWAY INC DEL $289,200.00 $284,205.00 -1.7%
ROP ROPER INDS INC NEW $279.43 $275.79 -1.3%
DHR DANAHER CORP DEL $100.43 $99.28 -1.1%

TD Ameritrade Holding Corporation (NASDAQ: AMTD) stock price has fallen by -8.5% over the last month. It may be worth taking a closer look at the stock, especially after this recent decline.

The next largest stock decline in Chuck Akre’s portfolio is Alarm.com Holdings, Inc. (NASDAQ: ALRM) which has seen its share price fall by -8.3% over the last month. Other notable holdings with a recent pull-back include Berkshire Hathaway Inc. (NYSE: BRK.B), Diamond Hill Investment Group, Inc. (NASDAQ: DHIL), Berkshire Hathaway Inc. (NYSE: BRK.A), Roper Technologies, Inc. (NYSE: ROP) and Danaher Corporation (NYSE: DHR).


Final Thoughts

Akre Capital prides itself on being extremely discerning when selecting stocks. The investment team obsesses over the quality of the people running a business and the rate of return. In a 2014 interview, Akre said he looks for companies that he thinks are ‘compounding machines.’ At the time the firm owned Mastercard Inc (NYSE: MA) and Visa Inc (NYSE: V) which he pointed out have margins of over 30%, which is around three times that of the average US company.

Akre and his colleagues also refer to what they call the ‘three-legged stool’ approach to finding compounding machines. The three requirements are exceptional people running the business, reinvestment acumen and opportunities for reinvestment. The last point is important because even if the management team is good at allocating capital, they can’t generate returns if there are no opportunities.

In 2015, Akre wrote an article in which he asserts that rate of return is the most important metric to use when evaluating an investment. He said that in most cases this can be measured by the growth in the book value of a share.

Akre capital often holds positions for over ten years. As long as a company is able to keep increasing its economic value, the firm will hold a stock. Although the firm is a long-term investor, Akre doesn’t attribute its success to ‘buy and hold’ investing, but to the quality of the companies they buy.

The ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Akre Capital Management page.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

Should You Buy Cotiviti Holdings, Inc. (NYSE: COTV) When Prices Drop?

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Cotiviti Holdings, Inc. (NYSE: COTV), a healthcare firm with a market capitalization of $4.1 billion, saw its share price increase by 29.8% over the last month. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could shares still be trading at a relatively cheap price? Let’s take a look at Cotiviti’s outlook and value based on its most recent financial data to see if there are any catalysts for a price change.


Is Cotiviti Still Cheap?

Good news, value investors! Cotiviti is still a bargain right now. According to the valuation below, the intrinsic value for the stock is $51.72, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low.

Cotiviti Holdings, Inc. Valuation Detail
Analysis Model Fair Value Upside (Downside)
10-yr DCF Revenue Exit $44.90 1.8%
5-yr DCF Revenue Exit $43.63 -1.1%
Peer Revenue Multiples $36.66 -16.9%
10-yr DCF EBITDA Exit $59.94 35.9%
5-yr DCF EBITDA Exit $63.81 44.6%
Peer EBITDA Multiples $46.37 5.1%
10-yr DCF Growth Exit $56.46 28.0%
5-yr DCF Growth Exit $59.15 34.1%
Peer P/E Multiples $54.51 23.5%
Average $51.72 17.2%

Click on any of the analyses above to view the latest model with real-time data.

Cotiviti’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta of 0.79. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.


What Does The Future Of Cotiviti Look Like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations.

Cotiviti projected net income chartsource: finbox.io data explorer

With net income expected to grow at an average rate of 16.3% over the next couple years, the future certainly appears bright for Cotiviti. It looks like higher cash flows are in the cards for shareholders, which should feed into a higher stock valuation.


How This Impacts You

Many investors separate stocks into value and growth categories based on quantitative metrics. However, one of the most famous investors in the world views this as foolish. In Warren Buffett’s 1992 letter to Berkshire Hathaway shareholders, Buffett touches upon a subject at odds with much of the investment industry:

“Most analysts feel they must choose between two approaches customarily thought to be in opposition: ‘value’ and ‘growth.’ Indeed, many investment professionals see any mixing of the two terms as a form of intellectual cross-dressing. We view that as fuzzy thinking… In our opinion, the two approaches are joined at the hip: Growth is always a component in the calculation of value.”

While investors tend to categorize stocks into value and growth, some of the most successful investors view growth as simply one component of a company’s value.

Cotiviti’s optimistic future growth does not appear to have been fully factored into the current share price with the stock still trading below its intrinsic value. Therefore, it may be a good time to purchase shares or increase your position in the company.

But before making an investment decision, I recommend you continue to research Cotiviti to get a more comprehensive view of the company by looking at:

Risk Metrics: what is Cotiviti’s CapEx coverage? This is the amount a company outlays for capital assets for each dollar it generates from those investments. View the company’s CapEx coverage here.

Valuation Metrics: what is Cotiviti’s price to book ratio and how does it compare to its peers? Analyze Price / Book here.

Efficiency Metrics: inventory turnover is a ratio that measures the number of times a company’s inventory is sold and replaced over the year. View Cotiviti’s inventory turnover here.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

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