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Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.

Lockheed Martin spinoff Neustar Inc. provides real-time cloud-based information services and data analytics, enabling marketing and IT security professionals to promote and protect their businesses. It operates complex data registries and uses its expertise to deliver actionable, data-driven insights that help clients make high-value business decisions in real time. It has a market cap of $1.4-billion (U.S.).

Neustar lost a big contract to rival Telcordia Technologies recently, hitting shares hard. But Validea's models think it was hit too hard.

The Warren Buffett-based strategy likes that it has upped EPS in all but one year of the past decade. It trades for just 8.8 times trailing 12-month EPS, which the John Neff-based model likes.

The company has a return on capital (EBIT/tangible capital employed) of 50 per cent, which impresses the Joel Greenblatt-based model. It has a 14.8-per-cent earnings yield (EBIT/enterprise value), part of why the Greenblatt-based model has strong interest.

Neustar has a 2.6 current ratio, a sign of good liquidity, according to the Benjamin Graham-based approach.

Debt/equity ratio (128 per cent) may seem high, but it's well below the communications services industry average (208 per cent), which the Martin Zweig-based model likes.

Neustar has a stellar 18-per-cent three-year after-tax average profit margin. It has a 10-year average return on equity of 24.1 per cent, which the Buffett model likes.

It has grown EPS at a 15-per-cent clip over the long term (using avg of 3, 4, 5 yr EPS growth rates), and revenues at a 16 per cent pace (using avg of 3, 4, 5 yr sales growth rates).

The Peter Lynch model likes its 0.59 P/E-to-growth ratio.

Neustar also has a strong free cash flow yield of 18%

John Reese is long NSR.

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