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Research Report

Consulting firm would get high marks from investing greats Add to ...

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.

Independent specialty consulting firm Navigant Consulting Inc., whose services include dispute, investigative, economic, operational, risk management technology, financial and regulatory advisory solutions has a market cap of $825-million (U.S.) and serves companies, legal counsel and governmental agencies facing the challenges of uncertainty, risk, distress and significant change. 

Navigant has grown earnings at a 20.4-per-cent pace over the long term (using an average of the 3-, 4-, and 5-year EPS growth rates), which the Peter Lynch based model likes. The Lynch model also likes Navigant`s 0.80 PE-to-growth ratio.

The company has reasonable 20-per-cent debt/equity ratio and gets strong interest from the James O'Shaughnessy-based growth model, thanks to its combination of good momentum (71 relative strength over past 12 months) and reasonable 1.0 price/sales ratio.

It gets some interest from the Joel Greenblatt-based model, which likes its earnings yield (EBIT/enterprise value) of 10.5 per cent. It has a strong 49.5-per-cent return on capital, using the EBIT/total capital employed metric the Greenblatt-based model uses.

Navigant has a 2.7 current ratio, a sign of good liquidity, according to the Benjamin Graham-based model, and it has free cash flow yield of 9.9 per cent.

 

John Reese is long NCI.

 

Click here for a complete breakdown of Validea's investing guru report.

 

Read other research reports here.

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