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TheStreet Open House

ModusLink Global Solutions Inc
MLNK : NASDAQ : Services
$3.85 -0.05 | -1.28%
Today's Range: 3.78 - 3.93
Avg. Daily Volume: 138,100
09/15/14 - 4:00 PM ET

Financial Analysis


MODUSLINK GLOBAL SOLUTIONS's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. MODUSLINK GLOBAL SOLUTIONS has strong liquidity. Currently, the Quick Ratio is 1.85 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 6.98% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY14 Q3 FY13
Net Sales ($mil)173.27173.02
EBITDA ($mil)2.331.05
EBIT ($mil)-1.57-2.59
Net Income ($mil)-9.48-8.31


Balance Sheet Q3 FY14 Q3 FY13
Cash & Equiv. ($mil)170.5571.23
Total Assets ($mil)428.99360.96
Total Debt ($mil)72.320.11
Equity ($mil)178.8167.13


Profitability Q3 FY14 Q3 FY13
Gross Profit Margin11.1510.83
EBITDA Margin1.340.6
Operating Margin-0.9-1.5
Sales Turnover1.722.07
Return on Assets-3.87-14.33
Return on Equity-9.34-27.15
Debt Q3 FY14 Q3 FY13
Current Ratio2.291.65
Debt/Capital0.290.0
Interest Expense2.050.33
Interest Coverage-0.76-7.98


Share Data Q3 FY14 Q3 FY13
Shares outstanding (mil)51.8951.53
Div / share0.00.0
EPS-0.18-0.17
Book value / share3.453.24
Institutional Own % n/a n/a
Avg Daily Volume137252.0328316.0

Valuation


SELL. This stock?s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 1.12 indicates a significant discount versus the S&P 500 average of 2.74 and a significant discount versus the industry average of 8.44. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, MODUSLINK GLOBAL SOLUTIONS proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MLNK NM Peers 26.69   MLNK 22.17 Peers 16.37

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

MLNK's P/E is negative making this valuation measure meaningless.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MLNK is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MLNK NA Peers 18.72   MLNK NA Peers 1.20

Neutral. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth potential.

Ratio not available.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MLNK 1.12 Peers 8.44   MLNK 68.63 Peers 18.34

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MLNK is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

MLNK is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MLNK 0.27 Peers 4.46   MLNK -0.93 Peers 7.41

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MLNK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MLNK significantly trails its peers on the basis of sales growth

 

 

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