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.
Florida-based HSN Inc. is an interactive multi-channel retailer with a $3.2-billion (U.S.) market cap and two business segments, HSN and Cornerstone. HSN is the only retailer offering live streaming video on TV, online and mobile applications. It broadcasts live to 95 million households in the US 24/7. Cornerstone is comprised of interactive, aspirational home and apparel lifestyle brands including Frontgate, Ballard Designs, Garnet Hil, Grandin Road, Chasing Fireflies, Improvements and Travelsmith. Cornerstone operates numerous e-commerce sites, distributes more than 300 million catalogs annually, and has 11 retail and outlet stores.
The company has a return on capital using the Joel Greenblatt-based model's EBIT/tangible capital employed metric of 47.3 per cent, which ranks 166th of the thousands of stocks in Validea's database.
It has more net current assets ($374-million) than long-term debt ($220-million), which the Benjamin Graham-based approach likes.
It has grown EPS at a 25-per-cent clip over the long term (using avg of 3 and 4yr EPS growth rates), part of why it gets strong interest from Peter Lynch model. The Lynch model also likes its 0.77 P/E-to-growth ratio.
HSN has a 1.6-per-cent dividend, and debt/equity ratio of 45 per cent, far below industry average of 137 per cent, which the Martin Zweig-based model likes.
The James O'Shaughnessy-based growth model likes that it has upped EPS in each year of past half decade. The O'Shaughnessy approach also likes its combo of a strong 12 month relative strength of 74 and a reasonable price/sales ratio of 0.93.
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