The Razor’s Edge

2-Year Price History

Ockham’s Rating

Rating specific information requires Premium Access.
Buy Now or Take the Tour.

STD Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, 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, STD the high and low end of the Price to Sales per share ratios are 1.88x and 1.04x respectively.

Notice that STD’s current Price to Sales per share ratio is 0.98x, 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 $8.78, STD is 33% below where we would expect to see it. This will beneficially factor into our final analysis of STD as it is not often that this stock sinks to these levels.

STD 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. STD is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for STD, the current level of Cash Earnings compared to its historical levels helps identify where STD 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 14.63 and a historical low Cash Earnings per share ratio of 8.83, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for STD? From the Ockham perspective, we are looking specifically at STD to see if the market is recognizing the huge disparity between STD’s past stock price to Cash Earnings ratio to today’s levels. At a difference of 70% 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 STD. 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.

STD 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 STD 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 STD is $1.31 producing a current dividend yield of 14.92%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from STD 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 STD over previous years was 26.90% while the lowest dividend yield was 1.95%. Management at STD has encouraged us with a current dividend yield of 3.43% above the historical median.