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"People of mediocre ability sometimes achieve outstanding success because they don't know when to quit. Most men succeed because they are determined to."

George Allen

Companhia Siderurgica Nacional (NYSE:SID) is an integrated steel producer in Brazil and Latin America. There are many reasons to like Companhia Siderurgica Nacional two of which are:

Its transnordestina railway project is expected to be fully operational by the end of 2012. This will enable it to transport over 30 million tonnes of cargo annually in the northeastern part of Brazil. The project is being funded through debt (60%) and capital injections. SID owns 56% of the project. Management expects to realize over 50% in operating margins and roughly a 15% return on this investment. It expects to break even with the four contracts that were signed before the completion of the project. Once this project is completed it will help improve efficiency because it will now own its own infrastructure for transporting various products such as iron ore, limestone, fertilizers, fuels, sugar cane, soybeans, etc.

In 2009 it ventured into a new business and began producing and selling cement. Production rose from 338,000 tones in 2009 to 992,000 tons in 2010. It now plans to invest $1 billion to build a Greenfield grinding mill with a capacity of 2.4 million tons and develop Arco's plant with a capacity of 600,000 tons a year and build three additional integrated plants with a capacity of 1 million tons per annum by 2013. Total annual production capacity is expected to hit 6.4 million tons of cement once all these facilities are fully operational.

Reasons to be bullish on Companhia Siderurgica Nacional:

  • It has a strong dividend of 6.7%.
  • A decent five year dividend average of 6.10.
  • A five-year dividend growth rate of 8.81.
  • Net income and cash flow from operating activities have generally been trending upward for the past few years.
  • A strong three year and five-year total return of 81% and 124%, respectively.
  • A very low payout ratio of 35%.
  • A strong quarterly earnings growth rate of 51.6%.
  • A good ROE of 31%.
  • A decent interest coverage ratio of 3.6.
  • A good free cash flow yield of 5.8%.
  • It sports good quick and current ratios of 3.6 and 4.5 respectively.
  • $100K invested for 10 years would have grown to a colossal 2.3 million.

Companhia Siderurgica Nacional

Industry: Non-Precious Metals

Levered Free Cash Flow: -1.36B

Growth

  1. Net income for the past three years
  2. Net Income 2009 = $1320 million
  3. Net Income 2010 = $1437 million
  4. Net Income 2011 = $N/A million
  1. EBITDA 12/2011 = $N/A million
  2. EBITDA 12/2010 = $1991 million
  3. EBITDA 12/2009 = $2096 million
  4. Net income Reported Quarterly = $-25 million
  1. Total cash flow from operating activities
  2. 2008 = $2.07 billion
  3. 2009 = $-443.45 million
  4. 2010 = $1.5 billion
  1. Cash Flow 12/2011 = N/A $/share
  2. Cash Flow 12/2010 = 1.35 $/share
  3. Cash Flow 12/2009 = 1.22 $/share
  1. Annual EPS before NRI 12/2010 = 1.02
  2. Annual EPS before NRI 12/2009 = 1.88
  3. Annual EPS before NRI 12/2008 = 1.56
  4. Annual EPS before NRI 12/2007 = 1.11

Performance

  1. ROE = 39.1%
  2. Return on Assets = 7.77%
  3. Quarterly Earnings Growth = 51.6%
  4. Quarterly Revenue Growth = 7.4%
  1. Price to Sales = 1.71
  2. Price to Book = 2.69
  3. Price to Tangible Book = 3.48
  4. Price to Cash Flow = 7.38
  5. Price to Free Cash Flow = -8.5
  1. Current Ratio =4.5
  2. Current Ratio 5 Year Average = 2.55
  3. Quick Ratio = 3.6
  4. Cash Ratio = 2.48
  5. Interest Coverage 03/2012 = 3.6
  1. Total return last 3 years = 53.06%
  2. Total return last 5 years = 91.26%

Dividend sustainability and history

  1. Payout Ratio 06/2011 = 0.49
  2. Payout Ratio 5 Year Average 09/2011 = 0.32
  3. Payout Ratio 5 Year Average 06/2011 = 0.32
  4. Change in Payout Ratio = 0.18
  1. Dividend yield 5 year average = 5.8%
  2. Dividend growth rate 3 year Average = -1.94%
  3. Dividend growth rate 5 year average = 8.81%
  4. Consecutive dividend increases = 2 years
  5. Paying dividends since = 1994

Notes

It falls under the category of "excellent."

CTC Media Inc (CTCM)

Industry: Radio and Television

Levered Free Cash Flow: 435.88M

Growth

  1. Net income for the past three years
  2. Net Income 2009 = $100 million
  3. Net Income 2010 = $146 million
  4. Net Income 2011 = $53 million
  1. EBITDA 12/2011 = $448 million
  2. EBITDA 12/2010 = $471 million
  3. EBITDA 12/2009 = $352 million
  4. Net income Reported Quarterly = $-25 million
  1. Total cash flow from operating activities
  2. 2009 = $132.95 million
  3. 2010 = $185.56 million
  4. 2011 = $115.8 million
  1. Cash Flow 12/2011 = 2.94 $/share
  2. Cash Flow 12/2010 = 2.55 $/share
  3. Cash Flow 12/2009 = 2.05 $/share
  1. Annual EPS before NRI 12/2011 = 0.97
  2. Annual EPS before NRI 12/2010 = 0.93
  3. Annual EPS before NRI 12/2009 = 0.73
  4. Annual EPS before NRI 12/2008 = 1.11
  5. Annual EPS before NRI 12/2007 = 0.86

Performance

  1. ROE = 19.04%
  2. Return on Assets = 15.33%
  3. Quarterly Revenue Growth = 6.5%
  1. Price to Sales = 2.46
  2. Price to Book = 2.7
  3. Price to Tangible Book = 7.87
  4. Price to Cash Flow = 4.07
  5. Price to Free Cash Flow = -29.4
  1. Current Ratio 09/2011 = 2.23
  2. Current Ratio 5 Year Average = 2.9
  3. Quick Ratio = 2.23
  4. Cash Ratio = 1.61
  5. Interest Coverage 09/2011 = 23.63
  6. Total return last 3 years = 220.85%
  7. Total return last 5 years = -48.93%

Dividend sustainability and history

  1. Payout Ratio 09/2011 = 0.92
  2. Payout Ratio 06/2011 = 0.84
  3. Payout Ratio 5 Year average 09/2011 = 0.2
  4. Payout Ratio 5 Year average 06/2011 = 0.16
  5. Change in Payout Ratio = 0.72

Notes

It falls under the category of "average." Net income, cash flow from operating activities and EBITDA have dropped from 2010 levels.

Gafisa S.A. (NYSE:GFA)

Industry: Builders

Levered Free Cash Flow: -878.81M

Growth

  1. Net income for the past three years
  2. Net Income 2009 = $108 million
  3. Net Income 2010 = $237 million
  4. Net Income 2011 = $N/A million
  1. EBITDA 12/2011 = $N/A million
  2. EBITDA 12/2010 = $293 million
  3. EBITDA 12/2009 = $215 million
  4. Net income Reported Quarterly = $-25 million
  1. Cash Flow 12/2011 = N/A $/share
  2. Cash Flow 12/2010 = 1.25 $/share
  3. Cash Flow 12/2009 = 1.4 $/share
  1. Annual EPS before NRI 12/2010 = 1.16
  2. Annual EPS before NRI 12/2009 = 1
  3. Annual EPS before NRI 12/2008 = 0.29
  4. Annual EPS before NRI 12/2007 = 0.29

Performance

  1. ROE = 5.83%
  2. Return on Assets = 2.24%
  3. Quarterly Earnings Growth = -60.4%
  4. Quarterly Revenue Growth = 5%
  1. Key Ratios
  2. Price to Sales = 0.49
  3. Price to Book = 0.47
  4. Price to Tangible Book = 0.58
  5. Price to Cash Flow = 4.21
  6. Price to Free Cash Flow = -1.1
  1. Current Ratio 5 Year Average = 3.1
  2. Quick Ratio = 2.26
  3. Cash Ratio = 0.61
  4. Interest Coverage =2.00
  5. Total return last 3 years = 26.13%
  6. Total return last 5 years = -57.89%

Dividend sustainability and history

  1. Payout Ratio 06/2011 = 0.36
  2. Payout Ratio 5 Year Average 09/2011 = 0.13
  3. Payout Ratio 5 Year Average 06/2011 = 0.13
  4. Change in Payout Ratio = 0.23
  1. Dividend yield 5 year average = 0%
  2. Dividend growth rate 3 year Average = 31.86%
  3. Dividend growth rate 5 year average = 0%
  4. Consecutive dividend increases = 0 years
  5. Paying dividends since = 2008

Notes

It would under the "average-good category" but with the caveat that only individuals willing to take on risk should consider getting into this play. If it can test the $4 ranges without closing below this level on a monthly basis the outlook will turn neutral. A weekly close above 6 will turn the outlook bullish.

Gannett Co Inc (NYSE:GCI)

Industry: Publishing

Levered Free Cash Flow: 637.24M

Growth

  1. Net income for the past three years
  2. Net Income 2009 = $355 million
  3. Net Income 2010 = $588 million
  4. Net Income 2011 = $459 million
  1. EBITDA 12/2011 = $1023 million
  2. EBITDA 12/2010 = $1234 million
  3. EBITDA 12/2009 = $988 million
  4. Net income Reported Quarterly = $-25 million
  1. Total cash flow from operating activities
  2. 2009 = $866.58 million
  3. 2010 = $772.89 million
  4. 2011 = $814.14 million
  1. Cash Flow 12/2011 = 3 $/share
  2. Cash Flow 12/2010 = 3.36 $/share
  3. Cash Flow 12/2009 = 2.9 $/share
  1. Annual EPS before NRI 12/2011 = 2.13
  2. Annual EPS before NRI 12/2010 = 2.44
  3. Annual EPS before NRI 12/2009 = 1.87
  4. Annual EPS before NRI 12/2008 = -7.61
  5. Annual EPS before NRI 12/2007 = 4.39

Performance

  1. ROE = 20.17%
  2. Return on Assets = 7.84%
  3. Quarterly Earnings Growth = -32.8%
  4. Quarterly Revenue Growth = -5.1%
  1. Price to Sales = 0.7
  2. Price to Book = 1.47
  3. Price to Tangible Book = -3.54
  4. Price to Cash Flow = 5.17
  5. Price to Free Cash Flow = 5.5
  1. Current Ratio 09/2011 = 1.19
  2. Current Ratio 5 Year Average = 1.3
  3. Quick Ratio = 1.14
  4. Cash Ratio = 0.35
  5. Interest Coverage 09/2011 = 4.69
  6. Total return last 3 years = 651.87%
  7. Total return last 5 years = -66.34%

Dividend sustainability and history

  1. Payout Ratio 09/2011 = 0.15
  2. Payout Ratio 06/2011 = 0.14
  3. Payout Ratio 5 Year Average 09/2011 = 0.19
  4. Payout Ratio 5 Year Average 06/2011 = 0.2
  5. Change in Payout Ratio = -0.05
  1. Dividend yield 5 year average = 13.5%
  2. Dividend growth rate 3 year Average = 20.97%
  3. Dividend growth rate 5 year average = 13.76%
  4. Consecutive dividend increases = 40 years
  5. Paying dividends since = 1929

Notes

It falls under the category of "average." Net income, cash flow per share, EBITDA and Annual EPS before NRI have all dropped from 2010 levels.

Glimcher Realty Trust (NYSE:GRT)

Industry: REITs

Levered Free Cash Flow: 77.62M

Growth

  1. Net income for the past three years
  2. Net Income 2009 = $5 million
  3. Net Income 2010 = $6 million
  4. Net Income 2011 = $20 million
  1. EBITDA 12/2011 = $136 million
  2. EBITDA 12/2010 = $152 million
  3. EBITDA 12/2009 = $165 million
  4. Net income Reported Quarterly = $-25 million
  1. Total cash flow from operating activities
  2. 2009 = $96.05 million
  3. 2010 = $70.76 million
  4. 2011 = $79 million
  1. Cash Flow 12/2011 = 0.62 $/share
  2. Cash Flow 12/2010 = 0.97 $/share
  3. Cash Flow 12/2009 = 1.29 $/share
  1. Annual EPS before NRI 12/2011 = 0.64
  2. Annual EPS before NRI 12/2010 = 0.74
  3. Annual EPS before NRI 12/2009 = 1.4
  4. Annual EPS before NRI 12/2008 = 2.04
  5. Annual EPS before NRI 12/2007 = 1.37

Performance

  1. ROE = -4.73%
  2. Return on Assets = -0.51%
  3. Quarterly Earnings Growth = 595.1%
  4. Quarterly Revenue Growth = 6.4%
  1. Price to Sales = 4.31
  2. Price to Book = 4.13
  3. Price to Tangible Book = 4.68
  4. Price to Cash Flow = 16.28
  5. Price to Free Cash Flow = -8.4
  1. Current Ratio 09/2011 = 0.04
  2. Current Ratio 5 Year Average = 0.11
  3. Quick Ratio = 0.04
  4. Cash Ratio = 0.02
  5. Interest Coverage 09/2011 = 1.44
  6. Total return last 3 years = 878.07%
  7. Total return last 5 years = -50.08%

Dividend sustainability and history

  1. Payout Ratio 09/2011 = 0.64
  2. Payout Ratio 06/2011 = 0.65
  3. Payout Ratio 5 Year Average 09/2011 = 1.01
  4. Payout Ratio 5 Year Average 06/2011 = 1.03
  5. Change in Payout Ratio = -0.38
  1. Dividend yield 5 year average = 29.1%
  2. Dividend growth rate 3 year Average = -22.92%
  3. Dividend growth rate 5 year average = -20.44%
  4. Consecutive dividend increases = 0 years
  5. Paying dividends since = 1994

Notes

It falls under the category of "average/mediocre."

Conclusion

As the markets are extremely overbought it would make sense for long term investors to wait for a pullback before committing large sums of money to this market.

EPS, Price, EPS surprise charts obtained from zacks.com. Free cash flow yield, income from continuing operations and revenue growth charts sourced from Ycharts.com. A major portion of the historical data used in this article as obtained from zacks.com. Consensus estimate analysis table sourced from reuters.com.

Source: 5 Growth Candidates: Companhia Siderurgica Nacional Our Top Pick

Additional disclosure: This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware.