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Monday, March 27, 2017

CNO Financial Group Inc. (NYSE:CNO) – Mid-Cap Value Opportunity

  • A look at the company’s current financial ratios and metrics indicate the shares are in value territory.
  • CNO Financial Group is a profitable company trading below book value in a historically highly valued market.
  • Investors can acquire shares at a significant discount using options.

See the full Seeking Alpha Article here:  CNO Financial Group

Monday, March 20, 2017

Essendant (NASDAQ:ESND) - Profit from the Volatility


  • Essendant is a wholesaler of a wide range of office, facility, industrial, and automotive supplies.
  • The stock has fallen substantially recently and currently provides an interesting opportunity for value investors.
  • The recent stock price decline means the company is trading under book value and has resulted in an attractive dividend yield of 3.63%.
See full analysis here:


Tuesday, March 14, 2017

Consumer Portfolio Services, Inc.(NASDAQ:CPSS)

New Seeking Alpha article on Consumer Portfolio Services, Inc.(NASDAQ:CPSS)


See Full Analysis here:  Full Analysis and Recommendations

Summary

Consumer Portfolio Services (NASDAQ:CPSS) purchases and services automobile contracts originated at automobile dealers.
Consumer Portfolio Services is trading at a discount to peers and the general market on most metrics despite strong gains in the stock in the last 12 months.
This company is generating impressive cash flow while selling for less than its intrinsic value even if you consider a future with little to no growth.

Saturday, March 4, 2017

Calculating the Present Value of a Company


We need to get several inputs to calculate the PV of a company.
  • Future Earnings Per Share - In this case we are going to calculate the expected earning per share 10 years from now:

The current EPS can be found on many different financial websites such as Reuters or Yahoo Finance.  The estimated long term growth rate can be your own estimate or based on their historical growth rate.  You could also find estimates from analysts on sites like NASDAQ.com or Reuters.  The number 10 is the number of years under evaluation.

  • Future Stock Price - using the calculated earnings per share we can calculate the future stock price.



The price earnings multiple used above could be the stock's current PE, an average of the last 5 years, or an estimated future PE.

Finally, we get to the Present Value Formula:

Key Considerations:

The desired annual interest rate is the percentage you want to make annually from the investment.  You want to see a of margin of safety when comparing the PV to the stock's current price.  For example, if the calculated PV is half of the current stock price, it may indicate that the stock is cheap while if the PV is close to or less than the stock's current price there may not be much upside and greater risk to the downside.  Note that the formulas as stated rely on a single EPS number.  What if the EPS for the last 12 months was unusually high for the company?  Clearly, other factors need to be considered like the company's financial health and earnings history.  Perhaps you may want to use an average EPS for the last five or ten years rather than the current EPS.


Monday, February 27, 2017