TPP Stock Report

2-Year Price History

Ockham's Rating

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TPP Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, TPP the high and low end of the Price to Sales per share ratios are 0.40x and 0.28x respectively.

Notice that TPP's current Price to Sales per share ratio is 0.23x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $28.69, TPP is 32% below where we would expect to see it. This will beneficially factor into our final analysis of TPP as it is not often that this stock sinks to these levels.

TPP Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of TPP, Ockham views their current Cash Earnings as above 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 TPP 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 10.82 and a 7.39 low over the same period.

Given this range of ratios per share, TPP at its current price of $28.69 and a Price to Cash Earnings ratio of 9.28 is 1% above its average historical Price to Cash Earnings ratio. Obviously this makes us more hesitant about TPP because cash earnings would need to rise to improve the valuation. Likewise, a decline in Price to Cash Earnings to below the average of 9.11 would significantly improve our outlook for TPP given the current profit levels.

TPP Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for TPP to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for TPP is $2.90 producing a current dividend yield of 10.11%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from TPP against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from TPP over previous years was 17.16% while the lowest dividend yield was 5.89%. Management at TPP needs to get the current dividend yield above the historical median before we are comfortable from this point of view.