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MagicDiligence
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MagicDiligence researches and recommends the most attractive value stock investing opportunities from Joel Greenblatt's Magic Formula Investing and similar screens. We use fundamental (and some technical) analysis to find equities of great companies with growth potential, outstanding management,... More
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  • dgroves0
    , contributor
    Comments (22) | Send Message
     
    My opinion, Vonage is undervalued... yes I know Revenues have been ever so slightly declining over the last three years, but I believe they are working to reverse the Revenue trend with new product, services offerings and INTERNATIONAL expansion/partnerships.

     

    http://www.acronet.net~dgroves0/davevgrevs.PNG

     

    Fat trimming to revenue producing activities were needed to achieve Free Cash Flow and Profitability. Huge revenues are no good if you are losing money.

     

    Here is a look at Revenues per Employee for the last SIX years- you can see why they became profitable!
    http://www.acronet.net~dgroves0/REVSPEREMPLO...

     

    They certainly reversed the Free Cash Flow and Profitability Trend. The effects of that, debt paid off, lowered interest rates, cash generation, and asset recognition accounting benefits, PROFITS are shown dramatically during the last 7 quarters on my Shareholder equity chart.

     

    This is a real easy to see indicator of Vonage's TURNAROUND!

     

    http://www.acronet.net~dgroves0/SHAREHOLDERE...

     

    Let's look at is where they are RIGHT NOW.

     

    To do that, we will look at charts of the 6 common Comparison ratios, comparing Vonage to 19 other telcos.
    1.) EV/EBIDTA
    2.) PRICE/FCF
    3.) PE
    4.) FWD PE
    5.) PEG
    6.) PRICE/SALES

     

    http://www.acronet.net~dgroves0/VonageCompar...

     

    Vonage is the most Undervalued in ALL SIX?

     

    ONE position, as the most undervalued, could be a fluke, THREE a coincidence. BUT SIX? That's not all, Vonage is rated at or near the bottom in these comparisons when compared to the whole USA Tech Sector! Here's p/fcf, just click the pe, peg, tabs etc...
    http://bit.ly/PW3hZ9

     

    LOOK AT THE SHAREHOLDER EQUITY CHART AGAIN - are they missing something? Clueless?

     

    I see some here complaining there is never news - are they missing something? Clueless?

     

    *** Aug. 30, 2012 - 2 new international plans
    New International Calling Plan Takes Expense Out of Calling Friends and Family in MEXICO
    http://bit.ly/ORpJGB

     

    Vonage Expands Unlimited Calling to Landline and Mobile Phones in VIETNAM
    http://bit.ly/PW3ifn

     

    *** Aug 30, 2012 Vonage applies for European patent: (coming to US soon?)
    SYSTEMS AND METHODS FOR CONDUCTING AND REPLAYING VIRTUAL MEETINGS
    http://bit.ly/ORpHhN

     

    *** Aug. 23, 2012 Vonage applies for patent:
    METHOD AND APPARATUS FOR BUSY OVERRIDE IN AN INTERNET PROTOCOL-BASED TELEPHONE SYSTEM
    http://1.usa.gov/PW3iMs

     

    *** Aug 2, 2012 Vonage applies for patent:
    METHOD AND SYSTEM FOR UNIFIED MANAGEMENT OF COMMUNICATION EVENTS
    http://1.usa.gov/ORpJGH

     

    *** Aug.1, 2012
    Vonage Holdings Corp. Reports Second Quarter 2012 Results
    http://bit.ly/PW3ifx
    -- Adjusted EBITDA(1) of $35 Million --
    -- Net Income of $21 Million or $0.09 per Share Excluding Adjustments(2) --
    -- Revenue of $212 Million --
    -- Churn Reduced to 2.5% from 2.8% Sequentially --
    -- Company Announces $50 Million SHARE REPURCHASE Program --

     

    *** July 31, 2012
    Vonage Launches New Unlimited Calling Plan to the PHILIPINES in PARTNERSHIP with GLOBE Telecom
    http://bit.ly/ORpHhV

     

    Vonage was GRANTED three PATENTS in the last couple months!
    *** July 17, 2012
    Vonage Granted Mobile VoIP Handoff Patent
    http://bit.ly/PW3j2W

     

    *** July 9, 2012
    Vonage Granted Two New Patents
    http://bit.ly/ORpJX3

     

    *** June 28, 2012
    Vonage Appoints Barbara Goodstein as Chief Marketing Officer
    http://bit.ly/PW3lb5

     

    The Vonage/Globe partnership is now active, Vonage expected to see some top line results of this in the second half.

     

    We are 2/3s the way through the 3rd quarter, so Vonage has generated about $18 million in FCF since the last report (Aug 1st), which means they have $17 million more in cash than long term debt on the books, right Now!!

     

    That will add to that shareholders equity chart above! Look at it again!
    3 Sep 2012, 01:17 PM Reply Like
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