Looks like the GMCR news that moved the stock up 42% helped JVA who supplies to Green Mountain Coffee Roasters Inc. (GMCR)
Monday, September 20, 2010
JVA; Coffee Holding Company Inc:Nano Cap Magic Formula Stocks (Pt2):
JVA; Coffee Holding Company Inc;
Industry = Processed & Package Goods
EV Per Share = 5.40
Price = 3.99
Div Yield = 2.99%
TTM ROIC = 23.68%; 2009 = 28.26% ; 2008 = -21.23% ; 2007 6.95%
EBIT/EV = 16.578%
EV/EBITDA = 25.71%
FCF/EV = 6.26%
Enterprise value = 26,566,100; Market Cap = 21,910,000
Reduced capital expenditure = average annual CapX 2007 to 2009 was 400,000 and has been reduced to 240,000 for the TTM
Share count reduction; TTM = 5.44 million down from 5.60 million in 2006
Liabilities significantly reduced by 33% from a 2007 balance of 8.194 million to the current balance of 5.497 million
Reduced over head expenses as measured by SGA to revenue
SGA/Revenue was 14.29% (SGA/Revenue) for 2005; reduced to the current TTM ratio (SGA/Revenue) = 8.43%
Strong diversified Insider ownership = 53.60%
Generous current dividend yield at 2.99%
Average annual price for JVA based on month end closing prices: 2006 = 4.70, 2007 = 4.31, 2008 = 2.33, 2010 = 4.68
Revenue used as key valuation metric
JVA and UACL are far from perfect but the market maybe ignoring the current disconnect from fair price based on intrinsic and comparative valuations.
Some of the additional attributes used to help find new ideas are mentioned below. The search started by looking at the EV/Revenue averages from 2005 to 2009. I then ranked the % ratio improvement based on the current EV/Revenue versus the average (2005 to 2009). The next step was only to further investigate those names with a current EV/Revenue less than 2009’s measure.
Balance sheet strength was also captured by selecting only companies with an EV/Market capitalization < 1.40. The names also needed to show an improving capital structure. Shares outstanding and /or debt reduction from 2005 to the TTM.
Quarterly year over year revenue growth
EV/Revenue < .50
52 week negative price change.
JVA: Coffee Holding Co
Originally mentioned on the link
Total liabilities were 13,154 for 2008 reduced to a 2010 balance of $10,711. The total liabilities did increase from the $7,640 balance in 2006.
Diluted shares outstanding were 5,599,830 at 2006 reduced to 5,468,439 for the current balance.
Insiders hold 53%.ROIC was impressive for the TTM @ 17.24%.
TTM EBITDA = 4,490,000 but operating from continuing operations was 2,839,000.
OI from continuing operations – Average Capital expenditures over the past 4 years/EV = 2,839,000/308,487,000 = .0823 or 8.23%
EV = 30,487,800
Capital expenditures averaged 393,000 from 2007 to 2010
Current dividend yield is 3.00%
Long JVA as part of a highly diversified value based portfolio in the tradition of Ben Graham