Symbol
|
Company Name
|
MGA
|
Magna International Inc. (USA)
|
INTC
|
Intel Corporation
|
BBY
|
Best Buy Co., Inc.
|
ART
|
Artio Global Investors Inc.
|
WPO
|
The Washington Post Company
|
TLAB
|
Tellabs, Inc.
|
UFS
|
Domtar Corp. (USA)
|
LMT
|
Lockheed Martin Corporation
|
AZN
|
AstraZeneca plc (ADR)
|
Screener.co's fundamental data and screening tools helped us narrow the universe of companies from over 30,000 to 9. However, we are not done yet. One thing to note is how many of these companies are in highly cyclical markets. Magna International Inc. (MGA) is a Canadian design, engineering, and testing company that sells into automotive OEMs. Intel (INTC) is a semiconductor company. Best Buy (BBY) is a retailer. Among the remaining companies, Domtar Corp. (UFS) is a paper products manufacturer that has managed to grow margins despite seeing its revenue drop from $6.4B in 2008 to $5.9B in 2010. As the world increasingly goes digital, the paper market is likely to be further challenged.
Continuing to whittle down the list, we recognize that The Washington Post Company (WPO) owns Kaplan and derives a large chunk of revenue and earnings from its for-profit education division. Between the challenged newspaper industry, and the fallout of last year's damning DOE report on the for-profit education sector, it is not difficult to see why the company is trading at a valuation discount relative to its recent performance.
Lockheed Martin Corporation (LMT) is heavily reliant on military spending for its revenue and the country's need to address its unsustainable budget deficits may put pressure on the pentagon's budget in the future.
And then there were four. TellLabs, Inc. (TLAB) is a telecommunications networking equipment company that is trading near its 52-week low. That is likely driven by the lousy quarterly results they posted for the quarter ending December 31, 2010. Gross margins were down and net income was negative. However, they have a very strong balance sheet and a TTM EV/EBITDA ratio of 3.1x. A good discussion of the TellLabs opportunity can be found in a recent Seeking Alpha article.
Artio Global Investors, Inc. (ART) is an asset manager that was the subject of a more thorough, and generally positive, Seeking Alpha article on 3/8.
AstraZeneca plc (ADR) (AZN) is a pharmaceutical company that is yielding a whopping 7.6%. The company is trading at an EV/EBITDA ratio of 4.5x. Note that Screener.co has updated fundamentals data for AZN and thousands of other foreign companies while that information is difficult to find elsewhere on the web (Yahoo Finance shows the 2009 report as the most recent AZN income statement while Screener.co has the annual data for the year ended 12/31/2010). While there is a lot of uncertainty in the healthcare industry around reform and how payors will deal with increasing medical costs, AstraZeneca seems like an interesting income play.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.