NASDAQ:MEDW
$8.80
(3/17 4:00PM)
+1.7%
| Open | $8.67 |
Mkt Cap | $68.2 Million |
| High | $8.81 |
52Wk High | $9.28 |
| Low | $8.5 |
52Wk Low | $3.96 |
| Volume | 5,060 |
Avg Vol 10D | 7,700 |
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. Mediware Information Systems, Inc. (MEDW) 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 Mediware Info Syst 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 MEDW before making an investment decision.
Ockham's Rating/Recommendation Summary
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MEDW 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 MEDW through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.50x and 1.43x respectively.
Utilizing this range we can see that MEDW’s current Price to Sales per share ratio of 1.65x is well below its normal historic Price to Sales levels. At a price of $8.85, MEDW is 17% 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.
MEDW Cash Earnings
Looking at MEDW specifically in their Cash Earnings capabilities, Ockham views MEDW as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for MEDW, the current level of Cash Earnings compared to its historical levels helps identify where MEDW 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 12.11 and a historical low Cash Earnings per share ratio of 6.88, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for MEDW? From the Ockham perspective, we are looking specifically at MEDW to see if the market is recognizing the huge disparity between MEDW's past stock price to Cash Earnings ratio to today's levels. At a difference of 22% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at MEDW. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
MEDW 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 MEDW to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. As far as our investing methodology goes, it is not necessary to pay a dividend in order to get a favorable rating, so as for right now MEDW gets a neutral rating for the dividend portion of the model. As you can see, we are not receiving historical dividend information from our data provider on MEDW at this time.
