Capital Cube

Daniel A. Ninivaggi, Chief Executive Officer of Icahn Enterprises said in the latest earnings call last Friday May 3rd that: “At the holding company level, we completed a public equity offering of IEP units in the first quarter. We also adopted a $4 annual dividend policy, resulting in a very attractive yield to our unitholders. Providing additional liquidity in IEP units and our new dividend policy are part of our strategy to broaden and strengthen our shareholder base. We also believe creating more liquidity in IEP units will provide us more financial flexibility to pursue our activist strategy and make it even more effective.”  Carl C. Icahn, Chairman of the Board for Icahn Enterprises is well known for his activist stance. Icahn Enterprises LP (NASDAQ:IEP) shares yesterday were up by over 4% and are again up today. IEP Share Price Performance Relative to Peers It should be noted that our Corporate Actions Report on Icahn Enterprises suggested that the fundamentals did not support an increase in dividends. Our preliminary analysis indicates that the new dividend policy is supported primarily by financing activities i.e. issuance of new equity. An updated Dividend Quality Report in which we assess whether dividends are being paid from operating,
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We wrap up our week’s analysis on Chesapeake Energy Corporation (NYSE:CHK) with an assessment of its Earnings Quality. Our previous posts on the company covered Fundamental Analysis, Corporate Actions, and Dividend Quality. CapitalCube’s analysis are peer-based. The peer-set used for Chesapeake is: Anadarko Petroleum Corporation (NYSE:APC), EOG Resources, Inc. (NYSE:EOG), Apache Corporation (NYSE:APA), Devon Energy Corporation (NYSE:DVN), Williams Companies, Inc. (NYSE:WMB), Noble Energy, Inc. (NYSE:NBL), Hess Corp. (NYSE:HES) and EQT Corporation (NYSE:EQT). Overview Chesapeake Energy Corporation (NYSE:CHK)’s relatively weak net income margins for the last twelve months combined with a level of accruals that is around peer median suggest that its reported net income is supported by a reasonable level of accruals. The company’s accrual levels over the last twelve months are positive but around the peer median suggesting the company is recording a proper level of reserves relative to its peers. Excluding the effects of change in revenue, the accounting categories causing the most impact on the movement of net income from the prior period to the current period are PP&E, Accounts Payable and Accounts Receivable. Company numbers are TTM (trailing twelve months) or latest available. Share price data is previous day’s close unless otherwise stated. Earnings: From Accounting or Cash Flow? Net Income = Net Operating Cash Flow – “Accruals” Accruals are estimates by company
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This week we’re taking a close look at Chesapeake Energy Corporation (NYSE:CHK)’s stock. Earlier this week we published our Fundamental Analysis and Corporate Actions assessment of the company. Today we assess its Dividend Quality. Chesapeake gets two stars from us for its Medium Dividend Quality and one star for its Dividend Quality trend; our overall score for its Dividend Quality is 25. For more on how we compute our Dividend Quality score read here. Overview Over the last twelve months (prior to 2012-09-30), Chesapeake Energy Corporation (NYSE:CHK) paid a medium quality dividend, which represents a yield of 2.1% at the current price. Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were medium quality and 2 were low quality. The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future. Company numbers are TTM (trailing twelve months) or latest available. Share price data is previous day’s close unless otherwise stated. Dividend Yield and Payout Cash flow coverage of the dividend paid is more relevant than dividend payout. While traditional dividend analysis focuses on
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Today we assess if Chesapeake Energy Corporation (NYSE:CHK) could be a likely merger target or an acquirer within its peer group. The peer set we use for our analysis comprises: Anadarko Petroleum Corporation (NYSE:APC), EOG Resources, Inc. (NYSE:EOG), Apache Corporation (NYSE:APA), Devon Energy Corporation (NYSE:DVN), Williams Companies, Inc. (NYSE:WMB), Noble Energy, Inc. (NYSE:NBL), Hess Corp. (NYSE:HES) and EQT Corporation (NYSE:EQT). If you missed our Fundamental Analysis on the company published earlier this week click here. Overview Chesapeake Energy Corporation (NYSE:CHK)’s relative size and current valuation make it a possible merger target within this peer group. Chesapeake Energy Corporation (NYSE:CHK) could achieve growth through acquisitions as it is big enough (by book value) and has only a modest level of goodwill on its balance sheet, but its valuation is not high enough to make acquisitions within this peer group easy. Downward pressure on CHK-US’s dividends due to relatively weak operating results, low interest coverage and a weak cash cushion (for the dividend) is offset by the medium dividend quality, which does not indicate the need to change dividend policy in the short-term. While the company’s share price is sufficiently below its 52-week high (currently about 35% below) it does not have a positive free cash flow, which suggests that a share buyback at this time may not be
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This week we take a look at Chesapeake Energy Corporation (NYSE:CHK) starting today with an analysis of the company’s fundamentals. Our analysis later this week will cover our assessment of its likely Corporate Actions, Dividend Quality, and Earnings Quality. For details on how CapitalCube computes the Fundamental Analysis Score of a company read here. Our analysis is peer-based; we used the following peer set for analyzing Chesapeake: Anadarko Petroleum Corporation (NYSE:APC), EOG Resources, Inc. (NYSE:EOG), Apache Corporation (NYSE:APA), Devon Energy Corporation (NYSE:DVN), Williams Companies, Inc. (NYSE:WMB), Noble Energy, Inc. (NYSE:NBL), Hess Corp. (NYSE:HES) and EQT Corporation (NYSE:EQT). If you are logged-in then you can change the default peer set (shown on the right) by either adding a new peer in the circled box or deleting any peers you don’t want by simply removing the checked peers. When you re-run the analysis Chesapeake will be scored and analyzed with your new custom peer set. Fundamental Analysis    Chesapeake Energy Corporation (NYSE:CHK trades at a lower Price/Book multiple (0.9) than its peer median (1.8). Chesapeake Energy Corporation (NYSE:CHK looks challenged given its below median EBITDA-based returns and the market’s low expectations of its growth. CHK-US has relatively low profit margins and median asset efficiency. Compared with its chosen peers, the company’s annual revenues and earnings change at
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Synopsys, Inc. (NASDAQ:SNPS) recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visitwww.capitalcube.com. Synopsys, Inc. (NASDAQ:SNPS)’s analysis versus peers uses the following peer-set: ARM Holdings plc (NASDAQ:ARMH), Autodesk, Inc. (NASDAQ:ADSK), Ansys Inc. (NASDAQ:ANSS), Cadence Design Systems Inc. (NASDAQ:CDNS), National Instruments Corp (NASDAQ:NATI) and Mentor Graphics Corp (NASDAQ:MENT). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. Annual (USD million) 2012-10-31 2011-10-31 2010-10-31 2009-10-31 2008-10-31 Revenues 1,756.0 1,535.6 1,380.7 1,354.7 1,337.0 Revenue Growth % 14.4 11.2 1.9 1.3 10.3 Net Income 182.4 221.4 237.1 167.7 190.0 Net Income Growth % (17.6) (6.6) 41.4 (11.7) 45.6 Net Margin % 10.4 14.4 17.2 12.4 14.2 ROE % 7.9 10.5 12.0 9.9 12.8 ROA % 4.9 6.7 7.6 5.9 7.1 Valuation Drivers Synopsys Inc.’s current Price/Book of 1.9 is about median in its peer group. The market expects SNPS-US to grow earnings about as fast as the median of its chosen peers (PE of 26.5 compared to
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Dollar General Corp. (NYSE:DG) reports preliminary financial results for the quarter ended 2012-10-31. Dollar General Corp. (NYSE:DG) recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit www.capitalcube.com. Dollar General Corp.’s analysis versus peers uses the following peer-set: Wal-Mart Stores, Inc. (NYSE:WMT), Costco Wholesale Corporation (NASDAQ:COST), Target Corporation (NYSE:TGT), Dollar Tree, Inc. (NASDAQ:DLTR), Family Dollar Stores, Inc. (NYSE:FDO) and Big Lots, Inc. (NYSE:BIG). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. *CapitalCube recently analyzed earnings for other companies in the Discount Stores sector; here are links:  Earnings Analysis: Big Lots, Inc. (NYSE:BIG), Earnings Analysis: Wal-Mart Stores, Inc. (NYSE:WMT), Earnings Analysis: Family Dollar Stores Inc. (NYSE:FDO). Quarterly (USD million) 2012-10-31 2012-07-31 2012-04-30 2012-01-31 2011-10-31 Revenues 3,964.6 3,948.7 3,901.2 4,185.1 3,595.2 Revenue Growth % 0.4 1.2 (6.8) 16.4 0.6 Net Income 207.7 214.1 213.4 292.5 171.2 Net Income Growth % (3.0) 0.3 (27.0) 70.9 17.2 Net Margin % 5.2 5.4 5.5 7.0
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Gildan Activewear Inc. (NYSE:GIL) reports preliminary financial results for the year ended 2012-09-30. Gildan Activewear Inc (NYSE:GIL) recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit www.capitalcube.com. Gildan Activewear Inc.’s analysis versus peers uses the following peer-set: V.F. Corporation (NYSE:VFC), Michael Kors Holdings Ltd (NYSE:KORS), Under Armour Inc (NYSE:UA), Abercrombie & Fitch Co. (NYSE:ANF), Hanesbrands Inc. (NYSE:HBI) and Warnaco Group Inc (NYSE:WRC). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. Annual (USD million) 2012-09-30 2011-09-30 2010-09-30 2009-09-30 2008-09-30 Revenues 1,948.3 1,726.0 1,311.5 1,038.3 1,249.7 Revenue Growth % 12.9 31.6 26.3 (16.9) 29.6 Net Income 148.5 239.9 198.2 95.3 144.6 Net Income Growth % (38.1) 21.0 108.0 (34.1) 11.2 Net Margin % 7.6 13.9 15.1 9.2 11.6 ROE % 10.8 19.7 19.6 11.1 19.6 ROA % 7.8 14.9 16.5 8.7 14.6 Valuation Drivers Gildan Activewear Inc.’s current Price/Book of 3.0 is about median in its peer group. The market expects
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Avago Technologies Ltd. (NASDAQ:AVGO) reports preliminary financial results for the year ended 2012-10-31. Avago Technologies Ltd (NASDAQ:AVGO) recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit www.capitalcube.com. Avago Technologies Ltd.’s analysis versus peers uses the following peer-set: Texas Instruments Incorporated (NASDAQ:TXN), Analog Devices, Inc. (NASDAQ:ADI), Infineon Technologies AG (PINK:IFNNY), STMicroelectronics N.V. (NYSE:STM), Skyworks Solutions Inc (NASDAQ:SWKS), LSI Corporation (NYSE:LSI), Hittite Microwave Corp (NASDAQ:HITT), Vishay Intertechnology (NYSE:VSH), RF Micro Devices, Inc. (NASDAQ:RFMD) and TriQuint Semiconductor (NASDAQ:TQNT). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. Annual (USD million) 2012-10-31 2011-10-31 2010-10-31 2009-10-31 2008-10-31 Revenues 2,364.0 2,336.0 2,093.0 1,484.0 1,699.0 Revenue Growth % 1.2 11.6 41.0 (12.7) 11.3 Net Income 563.0 552.0 415.0 (44.0) 57.0 Net Income Growth % 2.0 33.0 N/A (177.2) N/A Net Margin % 23.8 23.6 19.8 (3.0) 3.4 ROE % 25.4 31.4 32.6 (4.8) 7.7 ROA % 21.2 24.0 20.1 (2.3) 3.0 Valuation Drivers Avago Technologies Ltd.’s current
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Big Lots Inc. recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit www.capitalcube.com. Big Lots, Inc. (NYSE: BIG)’s analysis versus peers uses the following peer-set: Costco Wholesale Corporation (NASDAQ:COST), Target Corporation (NYSE:TGT), Dollar General Corp. (NYSE:DG), Dollar Tree, Inc.(NYSE:DLTR), Family Dollar Stores, Inc. (NYSE:FDO) and Fred’s, Inc. (NASDAQ:FRED). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. Quarterly (USD million) 2012-10-31 2012-07-31 2012-04-30 2012-01-31 2011-10-31 Revenues 1,134.2 1,218.0 1,294.5 1,669.6 1,138.3 Revenue Growth % (6.9) (5.9) (22.5) 46.7 (2.5) Net Income (6.0) 22.1 40.8 114.7 4.2 Net Income Growth % (127.1) (45.8) (64.5) 2,605.7 (88.1) Net Margin % (0.5) 1.8 3.2 6.9 0.4 ROE % (Annualized) (3.6) 11.8 20.0 58.3 2.2 ROA % (Annualized) (1.3) 5.2 9.5 24.7 1.0 Valuation Drivers Big Lots, Inc. (NYSE: BIG) currently trades at a higher Price/Book ratio (2.8) than its peer median (2.0). We classify BIG-US as Harvesting because of the market’s low expectations of growth (PE of 11.8 compared
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Guess? Inc. (NYSE:GES) reports preliminary financial results for the quarter ended 2012-10-31. Guess?, Inc. (NYSE:GES) recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company’s performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit www.capitalcube.com. Guess? Inc.’s analysis versus peers uses the following peer-set: The Gap Inc. (NYSE:GPS), Urban Outfitters, Inc. (NASDAQ:URBN), American Eagle Outfitters (NYSE:AEO), Abercrombie & Fitch Co. (NYSE:ANF), Carter’s, Inc. (NYSE:CRI), Fifth & Pacific Companies Inc (NYSE:FNP), Stein Mart, Inc. (NASDAQ:SMRT) and bebe stores, inc. (NASDAQ:BEBE). The table below shows the preliminary results along with the recent trend for revenues, net income and returns. Quarterly (USD million) 2012-10-31 2012-07-31 2012-04-30 2012-01-31 2011-10-31 Revenues 628.8 635.4 579.3 775.8 642.8 Revenue Growth % (1.0) 9.7 (25.3) 20.7 (5.1) Net Income 36.6 42.6 26.5 95.2 65.7 Net Income Growth % (14.0) 60.9 (72.2) 44.7 9.3 Net Margin % 5.8 6.7 4.6 12.3 10.2 ROE % (Annualized) 13.6 15.2 9.0 31.8 22.0 ROA % (Annualized) 8.6 9.7 5.7 20.5 14.3 Valuation Drivers Guess? Inc.’s current Price/Book of 2.1 is about
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