HGG  Hhgregg Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Consumer Electronics/Video Chains

Market Cap.

6.40M

Vuru Grade

26.50/100

Current Price

$0.23
+0.00 (+0.00%)

Growth Price

$5.60
Undervalued by 2,333.30%

Stability Price

$85.90
Undervalued by 37,247.98%

Company Metrics

  • P/E 888.75
  • P/S 0
  • P/B 0.17
  • EPS -3.35
  • Cash ROIC 1.33%
  • Cash Ratio 0.02
  • Dividend 0 / 0%
  • Avg. Vol. 378,119.00
  • Shares 27.83M
  • Market Cap. 6.40M

Company Description

hhgregg, Inc. operates as a specialty retailer of consumer electronics, home appliances, and related services. The company offers video products, such as flat panel televisions, blu-rays, and DVD players; appliances, including washers and dryers, refrigerators, cooking ranges, dishwashers, freezers, and air conditioners; and digital camcorders, digital cameras, gaming bundles, home theater receive... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

hhgregg: The End Is Near
Seeking Alpha - Feb 24, 2017
I had been so bullish on hhgregg (NYSE:HGG) and had been recommending to investors along the way in this recent article and this older article, I now perform the post-mortem analysis on my faulty recommendation.
HHGregg Said to Prepare for Bankruptcy as Soon as Next Month - Bloomberg
HHGregg reportedly preparing to file for bankruptcy - The Real Deal Magazine
HHGregg files for Chapter 11 bankruptcy, finds buyer
USA TODAY - Mar 7, 2017
INDIANAPOLIS - Executives with electronics and appliance retailer HHGregg announced Tuesday that the struggling business has filed for Chapter 11 bankruptcy.
hhgregg: Turnaround Play Or Melting Ice Cube?
Seeking Alpha - Dec 14, 2016
hhgregg, Inc. (NYSE:HGG), is a mid-sized retailer of electronics and appliances. The Indianapolis-based company operates 227 stores in 20 states.
0.0051
MarketWatch - Mar 17, 2017
HHGregg Inc. hhgregg, Inc. engages in the retail of appliances, consumer electronics, and furniture. It sells refrigerators; cooking and kitchen appliances; washers and dryers; small kitchen appliances; cookware; heating, cooling and air quality ...
HHGregg Said to Hire Advisers to Help Cope With Retail Woes
Bloomberg - Feb 15, 2017
Representatives at HHGregg and Morgan Lewis didn't immediately respond to requests seeking comment. The chain has struggled against online competition, as well as traditional retail outlets such as J.C.
hhgregg to Explore Strategic Alternatives - Business Wire (press release)
hhgregg Exploring 'Strategic Alternatives' - Inside INdiana Business
Hhgregg: Results Are Terrible, But This Is No Surprise
Seeking Alpha - Jan 27, 2017
Results are in at hhgregg (NYSE:HGG) and they are terrible, same store sales -22.2%. But this should come as no surprise to the market as the market has known for quite sometime that after its profit warning in early January that the all-important ...
HHGregg gives workers, shoppers Thanksgiving off
Indianapolis Star - Oct 11, 2016
NEW YORK - Consumer electronics chain HHGregg Inc. has become the latest retailer to take a stand against Thanksgiving shopping and plans to close its doors for the turkey feast.
HHGregg closing 88 stores, including its Whitehall location
Allentown Morning Call - Mar 2, 2017
HHGregg Inc. opened its only Lehigh Valley store in Whitehall Township in May 2010, filling a roughly 30,000-square-foot void near Lehigh Valley Mall created when home essentials chain Linen n' Things filed for bankruptcy two years earlier.
Hhgregg closing its Newport News store - Daily Press
Electronics retailer hhgregg going out of business
WIFR - Apr 7, 2017
Just days before announcing its bankruptcy protection filing last month, hhgregg said it planned to trim down by closing three distribution centers and 88 stores.
HH Gregg preparing to file for bankruptcy: Reports
AL.com - Feb 26, 2017
Appliance and electronics store HH Gregg is preparing to file for bankruptcy, Bloomberg News reports. The 61-year-old Indianapolis-based company could seek Chapter 11 protection as soon as next month.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for HGG to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate HGG's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$0.23 Current Price

$5.60 Growth Price (DCF)

Undervalued by 2,333.30%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$85.90 Stability Price (EPV)

Undervalued by 37,247.98%


Discount Rate: 15.0%

$1.07 NCA Price

Undervalued by 365.16%

$3.63 Book Price

Undervalued by 1,478.73%


Poor Cash Return on Invested Capital over the past 5 years

HGG has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

HGG has only created $1.33 of cash for every $100 invested.
Figures in USD. Fiscal year ends in March
20122013201420152016
Free Cash Flow 33.98M 12.03M 60.39M -9.76M -34.61M
divided by
Invested Capital 383.86M 387.89M 344.46M 223.13M 187.57M
Cash ROIC 8.85% 3.10% 17.53% -4.37% -18.45%

Very Poor Return on Equity over the past 5 years

HGG has shown an inability to deliver results for shareholders. This could be due to poor management, HGG operating in a highly competitive industry, or having a weak business in general.

HGG has generated a $18.33 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in March
20122013201420152016
Net Income 81.37M 25.37M 228,000.00 -132.75M -54.88M
divided by
Stockholders' Equity 359.52M 346.66M 307.13M 173.59M 121.35M
Return on Equity 22.63% 7.32% 0.07% -76.47% -45.22%

Mediocre Business Performance over the past 5 years

HGG isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

HGG has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in March
20122013201420152016
Free Cash Flow 33.98M 12.03M 60.39M -9.76M -34.61M

Weak Balance Sheet

HGG's financial position is not ideal. The key is to check whether HGG is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in March
20122013201420152016
Cash 59.24M 48.59M 48.16M 30.40M 3.70M
Current Assets 394.95M 419.91M 392.59M 328.39M 293.77M
Total Assets 642.78M 676.42M 625.96M 467.63M 385.35M
Current Liabilities 199.68M 239.94M 233.34M 214.10M 194.08M
Total Liabilities 283.26M 329.76M 318.83M 294.04M 264.00M
Stockholder' Equity 359.52M 346.66M 307.13M 173.59M 121.35M
Current Ratio 1.98 1.75 1.68 1.53 1.51
TL-to-TA 0.44 0.49 0.51 0.63 0.69

Low or No Reinvestment of Profits over the past 5 years

HGG has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to HGG operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in March
20122013201420152016
Retained Earnings 129.28M 154.65M 154.88M 22.13M -32.75M
Retained Earnings Growth - 19.62% 0.15% -85.71% -247.96%

Loss Making Entity over the past 5 years

HGG has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$0.95 of every $100 of Revenue have been a loss, on average over the past 5 years.
Figures in USD. Fiscal year ends in March
20122013201420152016
Net Income 81.37M 25.37M 228,000.00 -132.75M -54.88M
divided by
Revenue 2.49B 2.47B 2.34B 2.13B 1.96B
Net Profit Margin 3.26% 1.03% 0.01% -6.23% -2.80%

Varying Pricing Power over the past 5 years

HGG has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$42.82 of every $100 worth of sales have been Gross Profit, on average over the past 5 years.
Figures in USD. Fiscal year ends in March
20122013201420152016
Gross Profit 2.49B 717.59M 664.54M 605.84M 553.78M
divided by
Revenue 2.49B 2.47B 2.34B 2.13B 1.96B
Gross Margin 100.00% 29.00% 28.42% 28.45% 28.25%

High Capital Intensity over the past 5 years

HGG spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

3,358.95% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in March
20122013201420152016
Capital Expenditure 83.05M 54.02M 22.26M 22.52M 12.83M
divided by
Net Income 81.37M 25.37M 228,000.00 -132.75M -54.88M
Capital Expenditure Ratio 102.07% 212.94% 9,761.84% -16.97% -23.38%

No Dividend History over the past 5 years

HGG has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in March
20122013201420152016
Dividend Paid - - - - -
divided by
Shares Outstanding 38.08M 34.50M 30.68M 28.13M 27.70M
Dividend Paid Per Share - - - - -
Price at Year End 6.98 14.25 7.62 3.84 1.43
Dividend Yield - - - - -

Strong History of Stock Buybacks over the past 5 years

HGG has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in March
20122013201420152016
Shares Outstanding 38.08M 34.50M 30.68M 28.13M 27.70M
Stock Bought Back - 10.39% 12.43% 9.08% 1.55%
Share your thoughts about HGG

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!