NASDAQ:CBFV
$16.00
(3/18 4:00PM)
| Open | $16 |
Mkt Cap | $37.6 Million |
| High | $16 |
52Wk High | $17.00 |
| Low | $15.87 |
52Wk Low | $13.40 |
| Volume | 3,200 |
Avg Vol 10D | 1,300 |
A Word Of Caution
While we stand by our ratings methodology for long term value investors, sometimes smaller companies will be more volatile in terms of revenue, cash earnings, and other fundamental factors. CB Financial Services Incorproated (CBFV) is such a stock. Because many micro-caps are lightly traded their stock price can fluctuate because of a single large trade. Also, there is less analyst coverage of such micro-caps and therefore less information from which to base our ratings.
While this company may not get as much press because of its small size, please take a moment to look at the RazorWire feed on the right hand side of the report. Any time CB Financial Services Inc is mentioned on business television or influential blogs a clip of that will be displayed. This helps to bring you up to speed on any major issues they are facing right now, both positive or negative.
Therefore, (and as always), check additional sources and available information regarding CBFV before making an investment decision.
Ockham's Rating/Recommendation Summary
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CBFV Revenue
Cash earnings is the most important factor in our analysis, but 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 9 years. For, CBFV the high and low end of the Price to Sales per share ratios are 2.38x and 1.86x respectively.
Notice that CBFV's current Price to Sales per share ratio is 1.94x, which is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that CBFV does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
CBFV Cash Earnings
Looking at CBFV specifically in their Cash Earnings capabilities, Ockham views CBFV as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for CBFV, the current level of Cash Earnings compared to its historical levels helps identify where CBFV 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 18.60 and a historical low Cash Earnings per share ratio of 14.64, an investor can relate where value becomes optimal.
So with CBFV's current price (latest close of $16.00) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, CBFV is 23% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with CBFV.
CBFV Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
When reviewing dividend yields for CBFV, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. CBFV’s estimated annual dividend is $0.78 resulting in a current dividend yield of 4.88%. The highest dividend yield from CBFV over recent history was 5.82% while the lowest dividend yield was 0.00%. If you are looking for some “bang for your buck” then a dividend yield of 67.70% above the historical median should be enticing. CBFV receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.
