TRK Stock Report

2-Year Price History

Ockham's Rating

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TRK Revenue

As a value investing shop, we are interested in seeing how TRK'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 3.04x and the low end of the range at 2.08x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for TRK of 0.95x is well below its normal historic Price to Sales levels. At a price of $13.77, TRK is 64% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

TRK Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of TRK, Ockham views their current Cash Earnings 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 TRK 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 14.22 and a 9.65 low over the same period.

Now that TRK’s current price is $13.77 and its Price to Cash Earnings ratio is 5.01, we are very positive on its outlook from the cash earnings perspective. In fact, TRK is now trading a full 59% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why TRK 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.

TRK Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.

In TRK’s case, the estimated annual dividend is $0.09 resulting in a current dividend yield of 0.65%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from TRK against the historic high and low levels over the past 10 years. The highest dividend yield from TRK over this period was 3.19% while the lowest dividend yield was 0.00% It is never a good sign for a company to pay significantly lower dividends, in this case 59.25% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.