Safe:
CTG has a consistent diversified international revenue stream. The break down by region is 81.80% North America and 18.20% Europe. Multiple sectors are served; healthcare, financial services, energy and general markets. Revenue by vertical markets as a percentage of total revenue for the quarters ended April 3, 2015 are Technology services providers 28.50%, Healthcare 24.10%, Financial services 7.00%, Energy 5.60%, and General markets 34.80%.Further, a strong balance sheet with zero long term debt and 2.23 per share in cash. Z score (5.90), M score(-2.56), and a sloan ratio(-.45) all indicate a safe financial operation.
Ownership: According to Yahoo, insider ownership is 32.95%. But, reviewing the latest proxy there are 12 officers, directors that own 11.40%.Value investing institution Royce owns 12.50% along with other value shops, Heartland, Robeco, Minerva Advisors, Teton and others. Insider activity for 2015, directors acquired 26,555 shares for $231,815 at an average price of $8.72.CEO received 67,000 shares. Note that share count has remained stable from 2008 and prior years had positive insider buying at higher prices.
Price = $7.71 on 06/07/15
Annual Growth Rates:
Revenue 10yrs = 5.30%, 5yrs = 6.40%, 12 months = .60%
Free cash flow 5 yr growth rate = 31.80%
Book value growth rates 10yrs = 9.30%, 5yrs 9.80%, 12 months 13.70%
Market Cap: 144.31M,Enterprise Value:82.67M
Revenue(ttm):392.83M,Revenue Per Share:25.87
Qtrly Revenue Growth (yoy):-0.40% ,
Gross Profit(ttm):79.34M(compares favorably to current MC of 144.31M)
EBITDA (ttm):16.92M
Total Cash(mrq):34.42M or 30% of Market Cap
Total Cash Per Share (mrq):2.23
Total Debt (mrq): 0.00 ,
CFFO(ttm):11.57M or ,FCF (ttm):10.44M
52-Week Change:-51.30%
52-Week High:17.47 , 52-Week Low:7.27
Shares Outstanding: 18.72M , Float: 11.35M
% Held by Insiders: 32.95%,
% Held by Institutions:58.10%
Short % of Float: 6.10%
Annual Dividend Yield: 3.30%
Conclusion: CTG is a simple story that's safe and cheap. Their strong international presence in health care IT coupled with trend to use non permanent project based workers offers significant growth opportunities. Valuations are near the market's best with a 3.20% dividend yield supported by ample free cash flow. Lastly the trend toward using temporary based employees continues to grow.
No Position