NYSE:CBY
$52.98
(2/9 2:47PM)
+1.0%
| Open | $52.54 |
Mkt Cap | $17.8 Billion |
| High | $53.26 |
52Wk High | $56.34 |
| Low | $52.45 |
52Wk Low | $27.58 |
| Volume | 184,863 |
Avg Vol 10D | 1.2 Million |
Ockham's Rating/Recommendation Summary
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CBY Revenue
As a value investing shop, we are interested in seeing how CBY's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 2.07x and the low end of the range at 1.35x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for CBY of 2.27x is high enough compared with historical norms of CBY to cause some concern. The current Price to Sales per share is near the upper end of the historical range. In our eyes, this is a negative factor because it is more likely that it will return to the normal range than continue rising outside of the range. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 32% merely to return CBY to its historical average.
CBY Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. CBY is significantly above their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for CBY, the current level of Cash Earnings compared to its historical levels helps identify where CBY is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 20.17 and a historical low Cash Earnings per share ratio of 12.86, an investor can relate where value becomes optimal.
Therefore, at the current price of $52.34 and a Price to Cash Earnings ratio of 20.13, CBY is significantly overvalued. This diminishes the attractiveness of CBY until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 21% is needed just to return to the historical cash earnings multiple.
CBY Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from CBY against the historic high and low levels over an available data range. Because CBY has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In CBY’s case, the estimated annual dividend is $0.75 producing a current dividend yield of 1.43%. The highest dividend yield from CBY in recent history was 4.23% while the lowest dividend yield was 0.75%. It is never a good sign for a company to pay significantly lower dividends, in this case 42.57% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.
Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs Talked About Near M&A Discussion on WSJ Marketbeat
RazorWire captured a discussion on WSJ Marketbeat that contained talk of M&A activity and CBY was mentioned as well.
Due to deterioration in our valuation, we downgraded CBY as of Saturday, January 23, 2010. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. We noticed recently that in comparison to all other stocks we analyze in the news; CBY has received less coverage from the financial media in business television and blogs.
“… BBB (Standard & Poor’s) Kraft, which didn’t get an official nod from shareholder Berkshire Hathaway and Warren Buffett for its CADBURY buyout, took a different path to financing ... …”
Discussion Turns to CBY and Merger Talk on WSJ Marketbeat
While we do not know the details relating to CBY and any possible deal, our RazorWire news analytics has noticed a mention of the stock near a conversation about M&A activity.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs will perform just about the same as the index. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CBY has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs at the current price level because according to our methodology it is not supported by the fundamentals. Our valuation of CBY has become less favorable recently, and we have seen it necessary to downgrade the stock.
“… 5 billion to finance its CADBURY acquisition. Berkshire sold $8 billion for its acquisition of Burlington Northern Santa Fe. …”
Merger Talk with CBY on Zero Hedge
News broke today regarding mergers and acquisitions and Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs was discussed as well on Zero Hedge. Other sources will be required to know exactly what the context was in the discussion.
The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Due to deterioration in our valuation, we downgraded CBY as of Saturday, January 23, 2010. At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Ranking all stocks in terms of news coverage offers some interesting data. In the case of CBY, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… 5 billion from Kraft to finance its CADBURY purchase. We have yet to see if the massive corporate supply will be easily absorbed. …”
Seeking Alpha Wall St Breakfast Discussed CBY in Relation to M&A Activity
RazorWire captured a discussion on Seeking Alpha Wall St Breakfast that contained talk of M&A activity and CBY was mentioned as well.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs will perform just about the same as the index. Our valuation of CBY has become less favorable recently, and we have seen it necessary to downgrade the stock. At Ockham, we are not advising buying Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs at the current price level because according to our methodology it is not supported by the fundamentals. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CBY has been less covered in the news compared to the rest of our universe of stocks.
“… Kraft (KFT) is reportedly planning to sell at least $4B in bonds in four parts today to help it finance its CADBURY (CBY) acquisition. The sale will likely include 3. …”
Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs Talked About Near M&A Discussion on Seeking Alpha Wall St Breakfast
RazorWire captured a discussion on Seeking Alpha Wall St Breakfast that contained talk of M&A activity and CBY was mentioned as well.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards CBY and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs has actually sunk a bit in comparison to the others. As of this week's report, we have an Overvalued valuation on CBY because the price has gotten too high to be justified by the fundamentals. We have recently (Saturday, January 23, 2010) downgraded this stock due to deteriorating fundamentals.
“… Kraft gets CADBURY at last. Kraft (KFT) finally won control of CADBURY (CBY) yesterday, as 72% of CADBURY shareholders accepted the £11. 7B ($18. 6B) takeover offer. …”
Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs Talked About Near M&A Discussion on Fast Money
While we do not know the details relating to CBY and any possible deal, our RazorWire news analytics has noticed a mention of the stock near a conversation about M&A activity.
The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; CBY has received less coverage from the financial media in business television and blogs. At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Due to deterioration in our valuation, we downgraded CBY as of Saturday, January 23, 2010.
“… We think it's, we like the merger, they're paying a fair price for CADBURY. We think there's a lot of synergies and the combined businesses will be a higher quality company. …”
There is Significant News on CBY:Among the Twenty Most Active Stocks in the News
CBY has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs has actually sunk a bit in comparison to the others. We have recently (Saturday, January 23, 2010) downgraded this stock due to deteriorating fundamentals. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards CBY and think that it will generally perform in-line with the S&P 500. As of this week's report, we have an Overvalued valuation on CBY because the price has gotten too high to be justified by the fundamentals.
“… Numbers but when you see sales of sales of homes on the rise rather than what we saw last month, we saw CADBURY shareholders -- we saw a ford sales and gm's sales on the rise with ... …”
Debt a Topic of Conversation for Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs on Closing Bell
Leverage is not necessarily a bad thing for CBY or any other company, but staying informed on their debt is important. A recent story from Closing Bell discusses CBY's debt.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CBY has been less covered in the news compared to the rest of our universe of stocks. Our valuation of CBY has become less favorable recently, and we have seen it necessary to downgrade the stock. At Ockham, we are not advising buying Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs at the current price level because according to our methodology it is not supported by the fundamentals. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs will perform just about the same as the index.
“… affected for the dow jones industrials. The acquisition of CADBURY. The note reflects the risk that kraft won't reduce leverage …”
CBY Having an Active Day in News, Now on Fox Business
Something important is going on with CBY today, as it is getting a lot of attention on business television and influential blogs.
At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. Due to deterioration in our valuation, we downgraded CBY as of Saturday, January 23, 2010. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; CBY has received less coverage from the financial media in business television and blogs.
“… With a broad base rally on our hands. Take a look here everything making news from CADBURY taking the stage taking over …”
Regulators Interested in CBY? Possibly as Both Were Discussed on Fox Business
Fox Business talked recently regarding regulatory issues and Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs, while these two issues may not be related we though it worth noting.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CBY has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs at the current price level because according to our methodology it is not supported by the fundamentals. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Cadbury PLC - Shs American Deposit Receipt Repr 4 Shs will perform just about the same as the index. Our valuation of CBY has become less favorable recently, and we have seen it necessary to downgrade the stock.
“… I'm still grossed out by the CADBURY eggs with cheese in the middle. You have ruined my lunch. Brian: you will be the first one to get one. Thank you very much. …”