Coinstar, Inc. (CSTR)
- 43.29 (USD)
(+1.3 %)
9/8/2010 4:00:00 PM
CSTR Stock Report
NASDAQ:
CSTR
43.29
(USD)
(1.3 %
)
09/08 4:00 PM
Open
42.73
Day's Range
42.73
-
43.8
52Wk Range
23.49 - 59.43
Mkt Cap
1.5 Billion
Vol/Avg
772072/885,179
Div/Yield
0.00%
Key Fundamentals
| Price (9/8/2010) | 43.29 |
|---|---|
| Volume (9/8/2010) | 772072 |
| Last Close Price | 43.29 |
| 10 Day Average Volume | 885,179 |
| 13 Week Price Range | 42.86 - 57.61 |
| 52 Week Price Range | 23.49 - 59.43 |
| LTM Revenue | 1.3 Billion |
| Shares Outstanding (12/31/2009) | 32.7 Million |
| Market Capitalization | 1.5 Billion |
| Shares Held By Institutions | 11.3 Million |
| Institutional Holders | 238 |
| % Shares Held By Institutions | N/A |
| Earnings Per Share (EPS) | 1.78 |
| P/E Ratio | 42.735 |
| Book Value Per Share | 14.4934 |
| Gross Margin | 29.91% |
| Annual Dividend | 0 |
| Dividend Yield | 0.00% |
| Beta | 0.800984 |
| Fiscal Year Ends | December |
About Coinstar, Inc.
Coinstar, Inc.is considered to operate in the Consumer Goods sector. They specifically operate in the Business Equipment business segment contained within the Furniture Manufacturing industry.
Coinstar, Inc. is a multi-national company offering a range of 4th Wall solutions for retailers' storefronts. The company's services consist of self-service coin counting, entertainment services such as skill-crane machines, bulk vending machines, kiddie rides, self-service DVD kiosks where consumers could rent or purchase movies, money transfer services, and electronic payment services such as stored value cards, payroll cards, prepaid debit cards and prepaid wireless products via point-of-sale terminals and stored value kiosks. Its services are offered in supermarkets, mass merchandisers, warehouse clubs, drugstores, universities, shopping malls and convenience stores in the United States, Canada, Mexico, Puerto Rico, Ireland, the United Kingdom and other countries. The company is currently organized into four reportable business segments: Coin and Entertainment services, DVD services, Money Transfer services and E-payment services. The company is engaged in the self-service coin-counting services market and is an owner and operator of skill-crane and bulk vending machines in the United States. Through its majority ownership interest in Redbox and acquisition of DVDXpress, the company offers self-service DVD rentals through kiosks where consumers could rent or purchase movies. Its DVD kiosks are installed mainly at grocery stores, mass retailers, drug stores, restaurants and convenience stores. Through the company's acquisitions of Coinstar Money Transfer and GroupEx, it offers money transfer services. Its money transfer services provide an easy to use, reliable and cost effective way to send money around the world. Its services are specially suited for individuals away from home who need to send money to their family and friends or to manage their personal finances. The company offers E-payment services, including activating and reloading value on prepaid wireless accounts, selling stored value cards, loading and reloading prepaid debit cards and prepaid phone cards, selling prepaid phones and providing payroll card services.
Ockham's Rating/Recommendation Summary
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CSTR Revenue
As a value investing shop, we are interested in seeing how CSTR'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 1.80x and the low end of the range at 1.01x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for CSTR of 1.17x is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of 47.21, CSTR is 17% below where we would expect to see it. This will beneficially factor into our final analysis of CSTR as it is not often that this stock sinks to these levels.
CSTR Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently CSTR 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 10 years of cash earnings levels for CSTR 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 24.92 and a 13.77 low over the same period.
Now that CSTR’s current price is 47.21 and its Price to Cash Earnings ratio is 10.88, we are very positive on its outlook from the cash earnings perspective. In fact, CSTR is now trading a full 44% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why CSTR 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.
CSTR 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. While we do like to see companies with healthy and growing dividends, it is not appropriate for all companies, especially those focused on growth. In this regard, we regard CSTR as neutral because we do not have historical data for this company's dividends. We will being incorporating this into our analysis as soon as that data is available.