NYSE:LDR
$56.56
(2/9 11:07AM)
+1.0%
| Open | $56.75 |
Mkt Cap | $523.6 Million |
| High | $56.86 |
52Wk High | $68.96 |
| Low | $56.11 |
52Wk Low | $46.08 |
| Volume | 3,525 |
Avg Vol 10D | 32,800 |
Ockham's Rating/Recommendation Summary
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LDR Revenue
As a value investing shop, we are interested in seeing how LDR'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 7.23x and the low end of the range at 5.13x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for LDR of 5.74x is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that LDR 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.
LDR Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently LDR is below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from LDR. For example, LDR's Cash Earnings ratio per share has fluctuated between 15.78 and 22.23 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where LDR is with respect to prior business periods.
So what does a Cash Earnings ratio below the historical norm mean for LDR? Generally, LDR'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 LDR. Remember, that the average Cash Earnings level for LDR has been 19.00, so the current Cash Earnings level of 18.46 is a positive in our view, but by no means is it overwhelming.
LDR 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 LDR 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 LDR is $2.15 producing a current dividend yield of 3.73%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from LDR 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 LDR over previous years was 7.98% while the lowest dividend yield was 2.69%. With that range in mind, LDR’s current dividend yield is a full 30.08% below its median dividend yield historically. This is a negative from our perspective.
