JRN  Journal Communications Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Newspapers/Magazines

Market Cap.

754.25M

Vuru Grade

55.64/100

Current Price

$13.00
+0 (+0%)

Growth Price

$14.10
Undervalued by 8.43%

Stability Price

$12.43
Fairly valued

Company Metrics

  • P/E 16.73
  • P/S 1.74
  • P/B 2.66
  • EPS 1
  • Cash ROIC 12.62%
  • Cash Ratio 0.15
  • Dividend 0 / 0%
  • Avg. Vol. 201,093.00
  • Shares 50.75M
  • Market Cap. 754.25M

Company Description

Journal Communications, Inc., through its subsidiaries, operates as a media and communications company in the United States. The company operates in three segments: Publishing, Broadcasting, and Printing Services. The Publishing segment primarily consists of its daily newspaper, the Milwaukee Journal Sentinel, which is distributed primarily by independent contract carriers throughout southeastern ... more


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

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Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for JRN 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 JRN'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.

$13.00 Current Price

$14.10 Growth Price (DCF)

Undervalued by 8.43%


Growth Rate Assumed by Market: -5.62%


Future Free Cash Flow Growth Rate: -2.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$12.43 Stability Price (EPV)

Fairly valued


Discount Rate: 15.0%

$7.37 Book Price

Overvalued by 43.34%


Satisfactory Cash Return on Invested Capital over the past 5 years

JRN has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely JRN could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

JRN has created $12.62 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20102011201220132014
Free Cash Flow 63.50M 34.61M 64.93M 40.98M 73.16M
divided by
Invested Capital 350.56M 348.87M 548.32M 512.58M 480.45M
Cash ROIC 18.11% 9.92% 11.84% 7.99% 15.23%

Satisfactory Return on Equity over the past 5 years

JRN has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

JRN has generated $14.04 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20102011201220132014
Net Income 34.38M 22.19M 33.33M 26.20M 45.19M
divided by
Stockholders' Equity 207.76M 205.02M 205.50M 250.09M 279.71M
Return on Equity 16.55% 10.82% 16.22% 10.48% 16.16%

Excellent Business Performance over the past 10 years

JRN has been able to maintain profitability in good times and bad. This could mean JRN has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

JRN has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Free Cash Flow 72.13M 97.78M -18.54M 49.65M 68.14M 63.50M 34.61M 64.93M 40.98M 73.16M

Weak Balance Sheet

JRN's financial position is not ideal. The key is to check whether JRN 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 December
2005200620072008200920102011201220132014
Cash 6.86M 7.92M 6.26M 4.04M 3.37M 2.56M 2.92M 2.43M 1.91M 13.23M
Current Assets 130.90M 222.77M 119.60M 109.82M 86.84M 75.03M 71.67M 80.12M 86.45M 90.44M
Total Assets 984.67M 955.26M 856.97M 542.60M 473.19M 431.77M 417.73M 625.80M 596.02M 580.48M
Current Liabilities 108.67M 126.84M 84.71M 81.51M 77.62M 78.66M 65.93M 75.05M 81.52M 86.80M
Total Liabilities 500.60M 474.37M 369.41M 374.54M 302.11M 224.01M 212.70M 420.30M 345.93M 300.77M
Stockholder' Equity 484.07M 480.89M 487.56M 168.06M 171.08M 207.76M 205.02M 205.50M 250.09M 279.71M
Current Ratio 1.20 1.76 1.41 1.35 1.12 0.95 1.09 1.07 1.06 1.04
TL-to-TA 0.51 0.50 0.43 0.69 0.64 0.52 0.51 0.67 0.58 0.52

Consistent Reinvestment of Profits over the past 10 years

JRN has consistently retained profits. This may put JRN in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, JRN can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Retained Earnings 239.09M 270.99M 301.19M 53.79M 55.24M 87.77M -83,000.00 6.30M 32.50M 77.69M
Retained Earnings Growth - 13.34% 11.14% -82.14% 2.69% 58.89% -100.09% 7,692.77% 415.76% 139.03%

Highly Competitive Industry over the past 10 years

It's likely that JRN is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely JRN invests heavily in R&D and Sales, General & Administrative expenses.

Only $3.78 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Net Income 66.24M 64.37M 110.08M -224.40M 4.31M 34.38M 22.19M 33.33M 26.20M 45.19M
divided by
Revenue 764.46M 671.85M 582.65M 544.93M 433.57M 376.76M 356.79M 400.04M 397.27M 428.44M
Net Profit Margin 8.67% 9.58% 18.89% -41.18% 0.99% 9.13% 6.22% 8.33% 6.60% 10.55%

Varying Pricing Power over the past 10 years

JRN 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.

$49.60 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Gross Profit 326.33M 310.32M 262.44M 226.89M 152.82M 169.07M 356.79M 191.75M 178.03M 203.63M
divided by
Revenue 764.46M 671.85M 582.65M 544.93M 433.57M 376.76M 356.79M 400.04M 397.27M 428.44M
Gross Margin 42.69% 46.19% 45.04% 41.64% 35.25% 44.88% 100.00% 47.93% 44.81% 47.53%

High Capital Intensity over the past 10 years

JRN 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.

55.61% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Capital Expenditure 34.30M 22.22M 35.91M 22.23M 8.63M 9.39M 10.66M 12.74M 12.44M 9.07M
divided by
Net Income 66.24M 64.37M 110.08M -224.40M 4.31M 34.38M 22.19M 33.33M 26.20M 45.19M
Capital Expenditure Ratio 51.79% 34.52% 32.62% -9.90% 200.46% 27.31% 48.05% 38.22% 47.48% 20.08%

Inconsistent Dividend History over the past 10 years

JRN has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2005200620072008200920102011201220132014
Dividend Paid 20.29M 19.43M 20.45M 18.53M 1.48M - - 2.04M - -
divided by
Shares Outstanding 75.28M 72.33M 66.71M 51.92M 50.40M 50.79M 51.09M 50.09M 50.44M 50.75M
Dividend Paid Per Share 0.27 0.27 0.31 0.36 0.03 - - 0.04 - -
Price at Year End 11.88 10.98 8.18 2.25 4.03 4.98 4.40 5.17 9.35 11.74
Dividend Yield 2.27% 2.45% 3.75% 15.86% 0.73% - - 0.79% - -

History of Stock Buybacks over the past 10 years

JRN has some 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 December
2005200620072008200920102011201220132014
Shares Outstanding 75.28M 72.33M 66.71M 51.92M 50.40M 50.79M 51.09M 50.09M 50.44M 50.75M
Stock Bought Back - 4.07% 8.42% 28.50% 3.01% -0.77% -0.59% 1.99% -0.68% -0.62%
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