The Razor's Edge

2-Year Price History

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

TMS 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 TMS 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 0.84x and 0.47x respectively.

Utilizing this range we can see that TMS’s current Price to Sales per share ratio of 0.05x is significantly below its average levels historically. In fact, with a current price of $1.49, TMS is a full 92% 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 TMS.

TMS Cash Earnings

Looking at TMS specifically in their Cash Earnings capabilities, Ockham views TMS as 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 TMS 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 10.28 and a 5.43 low over the same period.

Now that TMS’s current price is $1.49 and its Price to Cash Earnings ratio is 0.30, we are very positive on its outlook from the cash earnings perspective. In fact, TMS is now trading a full 97% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why TMS 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.

TMS 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 TMS to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. Because TMS is not currently paying a dividend we give them a neutral rating on the dividend portion of our analysis; however, be advised that because the company has a history of paying a dividend that means that the dividend has been discontinued. We are always cautious of a company that has discontinued paying a dividend as it generally suggests a financial weakness.