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Stock Analysis of Vtel Corp.
Thank you for requesting an analysis of Vtel Corp. from VectorVest ProGraphics. The ticker symbol for Vtel Corp. is VTEL.
VTEL is traded on the NASDAQ and options are available on this stock.
PRICE: VTEL closed on 01-Oct-1997 at $7.90 per share.
VALUE: VTEL has a Value of $13.00 per share. Value is the foundation of the VectorVest system. It is a measure of what
a stock is currently worth. Value is based upon earnings, earnings growth rate, dividend payments, dividend growth rate, and
financial performance. Current interest and inflation rates also play an important role in the computation of Value. When
interest and/or inflation rates decrease, Value goes up. When interest rates and inflation increase, Value goes down. Sooner or
later a stock's Price and Value always converge.
RV (Relative Value): VTEL has an RV of 1.56. On a scale of 0.00 to 2.00, an RV of 1.56 is excellent. RV reflects the
long-term price appreciation potential of the stock compared to an alternative investment in AAA Corporate Bonds. Stocks
with RV ratings above 1.00 have attractive upside potential. A stock will have an RV greater than 1.00 when its Value is
greater than Price, and its Relative Safety (see below) and forecasted earnings growth rate are above average. In some cases,
however, a stock's RV will be above 1.00 even though its Value is well below Price. This happens when a stock has an
exemplary record of financial performance and an above average earnings growth rate. In this case, the stock is currently
selling at a premium, and the investor is banking on future earnings growth to drive the stock's price higher. This information is
very useful not only in knowing whether or not a stock has favorable price appreciation potential, but it also solves the riddle
of whether to buy high growth, high P/E, or low growth, low P/E stocks.
We believe that RV ratings above 1.00 are required to consistently achieve above average capital gains in the stock market.
RS (Relative Safety): VTEL has an RS rating of 0.84. On a scale of 0.00 to 2.00, an RS of 0.84 is poor. VectorVest
looks at safety from the viewpoint of an equity investor (one who is buying stock of a company) rather than that of a
purchaser of debt (one who is lending money to the company). From this perspective, consistency of financial and operating
performance, stock price appreciation history, and price volatility are the key factors used in the evaluation of Relative Safety
(RS). Debt to equity ratio, capitalization, sales volume, business longevity and other factors are also considered, but to a
lesser degree.
VectorVest favors steady, predictable performers. All stocks are rated on a scale of 0.00 to 2.00. A stock with an RS
greater than 1.00 is safer and more predictable than the average of all stocks. A stock with an RS less than 1.00 is less
predictable and riskier than the average stock.
RT (Relative Timing): VTEL has an RT rating of 1.56. On a scale of 0.00 to 2.00, an RT of 1.56 is excellent. RT is a
fast, responsive, short-term price trend indicator. It analyzes the direction, magnitude, and dynamics of a stock's price
behavior over the last 13 weeks; then reflects and projects the short-term price performance of the stock. Once a stock's
Price has established a strong trend, it is expected to continue that trend for the short-term. If the trend dissipates, RT will
gravitate towards 1.00. Should the price change dramatically, RT will notice the crucial turning point. When warranted, it will
explode from a Price low and dive from a Price high.
All stocks are rated on a scale of 0.00 to 2.00. If RT is above 1.00, the stock's Price is in an uptrend. Below 1.00, the
stock's Price is in a downtrend.
VST-Vector (VST): VTEL has a VST-Vector rating of 1.36. On a scale of 0.00 to 2.00, an VST of 1.36 is excellent.
VST-Vector solves the dilemma of balancing Value, Safety and Timing. Stocks with high RV values often have low RS
values, or stocks with low RV and RS values have high RT's. How can we find the stocks with the best combinations of
Value, Safety, and Timing?
The classic vector formula (square root of the sum of the squares) handles this problem. It combines a set of forces into a
single indicator for ranking every stock in the VectorVest database. Stocks with the highest VST-Vector have the best
combinations of Value, Safety and Timing. These are the ones to own for above average capital application.
GRT (Growth Rate): VTEL has a GRT of 34 % per year. This is excellent. GRT stands for forecasted Earnings Growth
Rate in percent per year. GRT is updated each week for every stock. Watch GRT trends very carefully. If the GRT trend is
up, the stock's Price will likely rise. If the GRT trend is down, the stock's Price will increase more slowly, cease to increase,
or subsequently fall.
Recommendation (REC): VTEL has a Buy recommendation. REC reflects the cumulative effect of all the VectorVest
parameters working together. These parameters are designed to help investors buy safe, undervalued stocks which are rising
in price, and to avoid or sell risky, overvalued stocks which are falling in price.
VectorVest is tuned to give an "H" or "B" signal when a stock's price is approximately 10% above a recent low, and an "S"
signal when the stock's price is approximately 10% below a recent high. High RV, RS stocks are favored toward receiving
"B" REC's, and sheltered from receiving "S" RECs.
STOP-PRICE: VTEL has a Stop-Price of $6.50 per share. This is $1.40 or 17.7% below its current closing Price.
VectorVest analyzes over 6,000 stocks each day for Value, Safety and Timing, and calculates a Stop-Price for each stock.
These Stop-Prices are based upon 13 week moving averages of closing prices, and are fine-tuned according to each stock's
fundamentals.
In the VectorVest system, a stock gets a "B" or an "H" recommendation if its price is above its Stop-Price, and an "S"
recommendation if its price is below its Stop-Price.
DIV (Dividend): VTEL does not pay a dividend. VectorVest focuses on annual,regular, cash dividends indicated by the
most recent disbursement. Special distributions, one-time payments, stock dividends, etc., generally are not included in
Dividend (DIV).
DY (Dividend Yield): VTEL has a DY of 0.0 percent. This is below the current market average of 1.2 percent. DY
equals 100 x (DIV/PRICE), and is expressed as a percentage.
EY (Earnings Yield): VTEL has an EY of 9.60%. This is above the current market average of 4.74%. EY equals 100 x
(EARNINGS PER SHARE/PRICE), and is expressed as a percentage.
EPS (Earnings Per Share): VTEL has an EPS of $0.76 per share. EPS stands for leading 12 months Earnings Per Share.
VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar
year earnings forecasts.
P/E (Price to Earnings Ratio): VTEL has a P/E ratio of 10.41. This ratio is computed daily based upon Price and EPS.
P/E = Price/EPS.
GPE (Growth to P/E Ratio): VTEL has a GPE of 3.26. This ratio suggests that This ratio suggests that VTEL is
undervalued. Growth to P/E ratio is a popular measure of stock valuation which compares Earnings Growth Rate (GRT) to
Price Earnings ratio (P/E). A stock is considered to be undervalued when GPE is greater than 1.00, and vice-versa.
VectorVest believes that RV is a much better indicator of long-term value. The RV of 1.56 for VTEL is excellent.
DS (Dividend Safety): VTEL has a DS of 0. On a scale of 0 to 99, a DS of 0 is poor. DS is defined as the assurance that
regular cash dividends will be declared and paid at current or at higher rates for the foreseeable future. Stocks with DS values
above 50 on a scale of 0 to 99 are above average in safety.
RISK (Dividend Risk): VTEL does not pay a dividend. All stocks in the VectorVest system that pay dividends are
classified as having Low, Medium or High Dividend Risk (RISK). Stocks with DS values above 50 are above average in
safety. These stocks are classified as having LOW or MEDIUM RISK. Stocks with DS values below 50 are below average
in safety and are classified as having HIGH Risk.
DG (Dividend Growth): VTEL has a DG of 0 percent per year. Dividend Growth is a subtle yet important indicator of a
company's historical financial performance and the board's current outlook on the future use of funds.
YSG-VECTOR (Yield-Safety-Growth Vector): VTEL has a YSG-Vector of 0.00. On a scale of 0.00 to 2.00, an
YSG-Vector rating of 0.00 is very poor. VectorVest combines Dividend YIELD, SAFETY and GROWTH into a single
parameter. YSG-Vector allows direct comparison of all dividend paying stocks. Stocks with the highest YSG-Vector values
have the best combinations of Dividend Yield, Safety and Growth. These are the stocks to buy for above average current
income and long-term growth.
VOL(100)s: VTEL traded 624400 shares on 01-Oct-1997.
AVG VOL(100)s: VTEL has an Average Volume of 194511. Average Volume is 50 day moving average of daily volume
as computed by VectorVest.
% VOL: VTEL had a Volume change of 221.0% from its 50 day moving average volume.
OPEN: VTEL opened trading at $7.80 per share on 01-Oct-1997.
HIGH: VTEL traded at a high of $7.90 per share on 01-Oct-1997.
LOW: VTEL traded at a low of $7.60 per share on 01-Oct-1997.
CLOSE: VTEL Closed trading at $7.90 per share on 01-Oct-1997.
% PRC: VTEL showed a Price change of 2.6% from the prior day's closing price.
INDUSTRY: VTEL has been assigned to the Telecomm (Equipment) Group. VectorVest classifies stocks into over 190
Industry Groups and 50 Business Sectors.
VTEL has below average safety with well above average upside potential. It reflects a stock which is likely to give well above
average, inconsistent returns over the long term.
The basic strategy of VectorVest is to buy low risk, high reward stocks. We suggest that Prudent investors buy enough high
Relative Value, high Relative Safety stocks to keep the overall RV and RS ratings of their portfolios above 1.00. As you do
this, you'll find that your risk will go down and your investment performance will improve. Not a bad combination. |
