NYSE:TDG
$48.39
(2/9 1:06PM)
+1.9%
| Open | $47.98 |
Mkt Cap | $2.3 Billion |
| High | $48.63 |
52Wk High | $51.89 |
| Low | $47.47 |
52Wk Low | $29.70 |
| Volume | 160,424 |
Avg Vol 10D | 248,900 |
Ockham's Rating/Recommendation Summary
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TDG 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 TDG through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 5 years are 3.64x and 1.94x respectively.
Utilizing this range we can see that TDG’s current Price to Sales per share ratio of 3.06x is slightly above its historical average. This level of Price to Sales gives us a fairly neutral position on the shares. We would like to see a drop in the Price to Sales ratio of 9% given current sales figures before we would become more positive on a Price to Sales basis. Such a drop would put Price to Sales per share in line with TDG's weighted historical average.
TDG Cash Earnings
Looking at TDG specifically in their Cash Earnings capabilities, Ockham views TDG as below its historical average multiple of Cash Earnings. Looking at the last 5 years we can get a good understanding of what investors have grown to expect from TDG. For example, TDG's Cash Earnings ratio per share has fluctuated between 9.09 and 16.67 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where TDG is with respect to prior business periods.
So what does a Cash Earnings ratio below the historical norm mean for TDG? Generally, TDG's investors have paid slightly higher stock prices for this level of Cash Earnings, which bodes well as a return to historical norms is statistically likely. However, it is never a guarantee that history gives us proper direction, particularly in fluctuating market cycles. So by utilizing a long term view and incorporating other areas of analysis (like Sales, Dividends, and management analysis), each investor can gain a more complete view of TDG. Remember, that the average Cash Earnings level for TDG has been 12.88, so the current Cash Earnings level of 12.05 is a positive in our view, but by no means is it overwhelming.
TDG 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. TDG may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As TDG more consistent dividend history is made available, we will begin to factor this into the Ockham approach.
