Positive things about CELL...
Martin Zweig Author of Winning on Wall Street and Chairman
of Zweig
Look at the P/E Ratio (PASS) : The P/E of a company must be
greater than 5 to eliminate weak companies, but not more than 3
times the current Market P/E because the situation is much too
risky, and never greater than 43. CELL's P/E is 31.3, based on
the trailing 12 month EPS, while the current market PE is 36.0.
Therefore, it passes the first test.
Look at the Revenue Growth in relation to EPS Growth (PASS) :
Revenue Growth must not be substantially less than earnings
growth. For earnings to continue to grow over time they must be
supported by a comparable or better sales growth rate and not
just by cost cutting or other non-sales measures. CELL's
revenue growth is 57.2%, while it's earnings growth rate is
20.8%, based on the three year historical growth rate.
Therefore, CELL would pass this criteria.
Look at the long-term EPS Growth (PASS) : Long-term earnings
growth rate must be at least 15% per year. CELL's long-term
growth rate of 20.8%, based on the three year historical growth
rate would pass this test.
Peter Lynch Author of One Up on Wall Street and Vice
Chairman of Fidelity
Look at Sales and P/E Ratio (PASS) : For companies with sales
greater than 1 billion, this methodology likes to see that the
P/E ratio remain below 40. Companies this large could have a
difficult time maintaining a growth rate high enough to support
a P/E above this threshold. CELL, whose sales are 1,658.0
million, would need to have a P/E below 40 to pass this
criteria. CELL's P/E of (31.3) would be considered acceptable.
Look at Inventory To Sales (PASS) : When inventories increase
faster than sales, it is a red flag. However an increase of up
to 5% is considered bearable if all other ratios appear
attractive. Inventory to Sales for CELL was 9.2% last year,
while for this year it is 9.60%. Since the inventory has been
rising, this methodology would be careful about investing in
this stock but would not completely eliminate it from
consideration as the inventory increase (0.36%) is below 5%.
Look at the EPS Growth Rate (PASS) : This methodology favors
companies that have several years of fast earnings growth, as
these companies have a proven formula for growth that in many
cases can continue many more years. This methodology likes to
see earnings growth in the range of 20% to 50%, as earnings
growth over 50% may be unsustainable. The EPS growth rate for
CELL is 20.8%, based on the three year historical growth rate,
which would be considered very good.
William O'Neil Author of How to Make Money in Stocks and
Founder Investors Business Daily
Look at annual earnings growth (PASS) : This methodology looks
for annual earnings growth above 18%, but prefers higher than
25%. CELL's annual earnings growth rate over the past five
years of 30.60% passes this test.
Look for confirmation of at least one other leading stock in
the industry (PASS) : Make sure that a company's industry is
attractive by confirming that at least one other company in the
industry has a relative strength above 80. There is
confirmation in CELL's industry (Communications Equipment), as
there are 82 companies that have a relative strength at or
above 80.
Look for leading industries (PASS) : Buy stocks in top
performing industries. Look at the number of companies within
an industry that have a weighted relative strength above 80,
and choose only the top 30% of those industries from which to
select stocks. In another method, look for industries with the
most stocks making new 52-week highs. CELL's industry
(Communications Equipment) is currently one of the top
performing industries, as it passes both of the aforementioned
criteria.
Look to see if Long-term Debt/Equity has been decreasing (PASS)
: Companies who have consistently cut debt over the last 3
years, or who have no debt, are looked at favorably. CELL,
whose Debt/Equity for the last 3 years (from earliest to the
most recent fiscal year) was 119.7%, 119.7%, 0.0%, would pass
this test.
Look at the shares outstanding (NEUTRAL) : Shares outstanding
should be less than 30 million, as fewer shares mean bigger
price jumps when demand surges. However, large companies are as
acceptable if all the other numbers check out. CELL currently
has 53 million shares outstanding. This is less favorable, but
is still acceptable.
Look at the insider ownership (PASS) : Companies with the best
prospects have strong insider ownership, which we define as 15%
or more. When there is strong insider ownership, management is
more likely to act in the best interest of the company, as
their interests are right in line with that of the
shareholders. Insiders own 20.0% of CELL's stock. Management's
representation is large enough and would pass this test.
Look for something new and/or of major significance in the
business: When investing in a company, this methodology looks
for some new excitement taking place in the business. Look for
the release of major new products or services, which are
currently adding to revenues, the implementation of fresh
top-level managment, or significant favorable changes in
industry conditions. Unfortunately, we are unable to come to a
conclusion on this variable, but check out the REESE REPORT for
the latest developments on CELL.
Look at the institutional ownership (PASS) : Some institutional
ownership is preferred, but there is no indication that a large
number of institutions is too many. Institutions own 68.2% of
CELL's stock. Because there is some institutional ownership
present, CELL would pass this test.
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