| Price (9/3/2010) | 29.92 |
|---|---|
| Volume (9/3/2010) | 1037900 |
| Last Close Price | 29.92 |
| 10 Day Average Volume | 1.0 Million |
| 13 Week Price Range | 26.58 - 32.09 |
| 52 Week Price Range | 25.98 - 40.45 |
| LTM Revenue | 7.3 Trillion |
| Shares Outstanding (3/31/2010) | 1.0 Billion |
| Market Capitalization | 29.0 Billion |
| Shares Held By Institutions | 9.2 Million |
| Institutional Holders | 209 |
| % Shares Held By Institutions | 8.74% |
| Earnings Per Share (EPS) | -40.66 |
| P/E Ratio | 111.111 |
| Book Value Per Share | 33.8713 |
| Gross Margin | 32.09% |
| Annual Dividend | 0 |
| Dividend Yield | 0.00% |
| Beta | 1.525119 |
| Fiscal Year Ends | March |
Sony Corporationis considered to operate in the Consumer Goods sector. They specifically operate in the Electronic Equipment business segment contained within the Electronic Equipment industry.
Sony Corporation was established in May 1946 under Japanese law. The Company and its subsidiaries are engaged in the development, design, manufacture, and sale of various kinds of electronic equipment, instruments, and devices for consumer and industrial markets. The Company also develops, produces, manufactures, and markets home-use game consoles and software. It is engaged in the development, production, manufacture, marketing, distribution and broadcasting of image-based software, including film, video and television products. In the Electronics segment, it is engaged in the development, design, manufacture, and sale of various kinds of electronic equipment, instruments and devices for consumer and professional markets. The Company is also engaged in various financial service businesses, including insurance operations through a Japanese life insurance subsidiary and a non-life insurance subsidiary, banking operations through a Japanese internet-based banking subsidiary and leasing and credit financing operations in Japan. In addition to the above, the Company is engaged in the development, production, manufacture, and distribution of recorded music, a network service business, an animation production and marketing business, and an advertising agency business in Japan. The Company's main manufacturing facilities are located in Japan, Malaysia, China, the U.S., Singapore, Spain and Mexico, and its products are marketed by sales subsidiaries and unaffiliated local distributors and sold through direct sales via the Internet throughout the world. In addition to internationalizing its production operations, the Company is conducting research and development activities outside Japan to bring these operations into closer proximity to local communities and markets. The Company's Electronics segment produces consumer products that compete against products sold by competitors, including new entrants, on the basis of several factors such as price and function. The Company is subject to a range of environmental and occupational health and safety laws and regulations, including laws and regulations relating to air pollution, water pollution, the management, elimination or reduction of the use of hazardous substances, decreases in the level of standby power of certain products, waste management, recycling of products, batteries and packaging materials, site remediation and worker and consumer health and safety.
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 SNE 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 0.01x and 0.00x respectively.
Utilizing this range we can see that SNE’s current Price to Sales per share ratio of 0.00x is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of 28.94, SNE is 25% below where we would expect to see it. This will beneficially factor into our final analysis of SNE as it is not often that this stock sinks to these levels.
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 SNE is significantly above 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 SNE 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 1.18 and a 0.54 low over the same period.
Therefore, at the current price of 28.94 and a Price to Cash Earnings ratio of 1.32, SNE is significantly overvalued. This diminishes the attractiveness of SNE until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 53% is needed just to return to the historical cash earnings multiple.
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.

