TSCM Stock Report

2-Year Price History

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. TheStreet.com, Incorporated (TSCM) 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 left had side of the report. Any time TheStreet.com, Inc. is mentioned on business television 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 TSCM before making an investment decision.

Ockham’s Rating

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TSCM 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 TSCM 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 6.71x and 2.32x respectively.

Utilizing this range we can see that TSCM’s current Price to Sales per share ratio of 0.61x is significantly below its average levels historically. In fact, with a current price of $1.85, TSCM is a full 87% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for TSCM.

TSCM 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 TSCM is 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 5 years of cash earnings levels for TSCM 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 42.04 and a 10.61 low over the same period.

Now that TSCM’s current price is $1.85 and its Price to Cash Earnings ratio is 8.41, we are very positive on its outlook from the cash earnings perspective. In fact, TSCM is now trading a full 69% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why TSCM 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.

TSCM Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company’s inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from TSCM against the historic high and low levels over an available data range. Because TSCM has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In TSCM’s case, the estimated annual dividend is $0.10 producing a current dividend yield of 5.41%. The highest dividend yield from TSCM in recent history was 5.92% while the lowest dividend yield was 0.00%. It’s hard not to notice that TSCM pays a current dividend yield that is 82.77% above the historical median. This peaks our interest since our analysis is looks favorably upon dividend yields that are greater than the historical median.