As part of a new series here at The Acquirer’s Multiple, we’re providing a new feature called ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is Charles & Colvard, Ltd. (NASDAQ: CTHR).
Charles & Colvard Ltd manufactures, markets and distributes finished jewellery which also includes moissanite gemstone in the jewellery market. The company sells jewels through two operating segments namely Online Channels segment and Traditional segment.
A quick look at Charles & Colvard’s share price history (below) over the past twelve months shows that the price is down 42%. Here’s why the company is undervalued.
Summary
Market Cap: $18 Million
Enterprise Value: $6 Million
Operating Earnings*
Operating Earnings: $2 Million
Acquirer’s Multiple
Acquirer’s Multiple: 3.31
Free Cash Flow (TTM)
Free Cash Flow: $0.29 Million
FCF/EV Yield:
FCF/EV Yield: 5%
Other Indicators
Piotroski F-Score: 6
Altman Z-Score: 1.89
Beneish M-Score: -2.39
*We make adjustments to operating earnings by constructing an operating earnings figure from the top of the income statement down, where EBIT and EBITDA are constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–income that a company does not expect to recur in future years–ensures that these earnings are related only to operations.
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