NASDAQ:STRM
$1.97
(3/16 8:10PM)
-1.3%
| Open | $2 |
Mkt Cap | $18.9 Million |
| High | $2 |
52Wk High | $3.58 |
| Low | $1.96 |
52Wk Low | $1.25 |
| Volume | 13,539 |
Avg Vol 10D | 6,300 |
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. Streamline Health Solutions, Incorporated (STRM) 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 Streamline Hlth Soltns, 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 STRM before making an investment decision.
Ockham's Rating/Recommendation Summary
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STRM 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 10 years. For, STRM the high and low end of the Price to Sales per share ratios are 3.18x and 1.23x respectively.
Notice that STRM's current Price to Sales per share ratio is 1.21x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $1.97, STRM is 46% below where we would expect to see it. This will beneficially factor into our final analysis of STRM as it is not often that this stock sinks to these levels.
STRM Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. STRM is significantly 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 STRM. For example, STRM's Cash Earnings ratio per share has fluctuated between 10.76 and 29.35 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where STRM is with respect to prior business periods.
So with STRM's current price (latest close of $1.97) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, STRM is 51% 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 STRM.
STRM 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. Although they may currently pay a dividend, our data source has no historical record of it for STRM. Since we cannot apply our historical trend analysis to dividends for STRM we have a neutral score for the dividend portion of our analysis.
