The Razor's Edge

2-Year Price History

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

GW Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at GW through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.30x and 1.24x respectively.

Utilizing this range we can see that GW’s current Price to Sales per share ratio of 0.98x is significantly below its average levels historically. In fact, with a current price of $5.48, GW is a full 45% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for GW.

GW Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently GW is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for GW to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 14.24 and a 7.82 low over the same period.

Now that GW’s current price is $5.48 and its Price to Cash Earnings ratio is 3.70, we are very positive on its outlook from the cash earnings perspective. In fact, GW is now trading a full 67% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why GW has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

GW Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. While we do like to see companies with healthy and growing dividends, it is not appropriate for all companies, especially those focused on growth. We regard GW as neutral in terms of dividends because they have no history of paying a dividend and continue to reinvest that money for growth purposes.