KUB Investment Analysis Report & Stock Research, Kubota LTD

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Kubota LTD (KUB)

KUB Stock Report

2-Year Price History

View Larger KUB Chart
NYSE:KUB
$44.71
(7/27 4:03PM)
Open43.92 Mkt Cap$11.1 Billion
High44.83 52Wk High$44.58
Low43.92 52Wk Low$17.72
Volume28853 Avg Vol 10D36,500

Ockham's Rating

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KUB Revenue

As a value investing shop, we are interested in seeing how KUB'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 1.11x and the low end of the range at 0.59x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for KUB of 1.02x is high enough compared with historical norms of KUB to cause some concern. The current Price to Sales per share is near the upper end of the historical range. In our eyes, this is a negative factor because it is more likely that it will return to the normal range than continue rising outside of the range. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 19% merely to return KUB to its historical average.

KUB Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently KUB is significantly above their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for KUB, the current level of Cash Earnings compared to its historical levels helps identify where KUB 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 14.45 and a historical low Cash Earnings per share ratio of 7.60, an investor can relate where value becomes optimal.

Just recall that when a stock's price, as in the cases of KUB, is significantly elevated to the level of Cash Earnings being generated, the market has already priced in much of that value. For example, the historical average for KUB's Price to Cash Earnings ratio is 25% below the current ratio of 13.82. That is not an insignificant amount, and diminishes our overall outlook on KUB. However, you need to review several areas of a company's potential, and as management would point out, one metric is not the end-all-be-all of any analysis.

KUB 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.

Peer Comparison

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Kubota LTD Industry Grouping

(7/24/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding KUB) 9.45 4.64 » 43.93 0.75 0.39 » 1.95 14.95% 11.75%
*10 year range does not include current year values
Nidec Corp. NJ $11.5 Billion $18.05 18.05 7.99 » 36.61 1.29 0.82 » 3.21 18.79% 13.44%
Kubota LTD KUB $11.1 Billion $43.68 13.82 3.69 » 22.21 1.02 0.34 » 1.64 5.02% 13.66%
PRECISION CASTPARTS CORP. PCP $11.0 Billion $78.37 9.26 4.12 » 74.88 1.26 0.37 » 3.26 25.71% 16.92%
Hitachi Limited HIT $10.5 Billion $31.27 3.82 1.92 » 75.68 0.09 0.07 » 0.72 10.12% 0.87%
Ricoh Company Ltd Spons ADR RICOY $9.0 Billion $61.80 8.17 4.96 » 13.68 0.42 0.28 » 1.11 4.35% 8.14%
ITT Corp. ITT $8.6 Billion $47.17 7.94 4.22 » 18.80 0.70 0.41 » 1.48 15.76% 19.40%
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Key Fundamentals

KUB - Kubota LTD Fundamentals
Price (7/27 4:03PM) $44.71
Volume (7/27 4:03PM) 28,853
Last Close Price $44.71
10 Day Average Volume 36,500
13 Week Price Range $29.31 - $44.58
52 Week Price Range $17.72 - $44.58
LTM Revenue $11.2 Billion
 
Shares Outstanding (03/2009) 254.4 Million
Market Capitalization $11.1 Billion
Shares Held By Institutions 3.2 Million
Institutional Holders 78
% Shares Held By Institutions 1.30%
Earnings Per Share (EPS) $1.91
P/E Ratio 22.90
Book Value Per Share $23.01
 
Gross Margin 29.70%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 1.30
Fiscal Year Ends March

About Kubota LTD

Kubota LTD is considered to operate in the Industrial Goods sector. They specifically operate in the Diversified Machinery business segment contained within the Industrial industry.

The Company is a manufacturer of farm equipment, and producer of pipes, mainly ductile iron pipes, and related equipment for water supply and other utilities.

NASDAQ 1967.89

1.93  0.10%
S&P; 500 982.18

2.92  0.30%
^DIA 91.14

0.17  0.19%