CCME vs CHRM
In terms of key metrics comparing CHRM with CCME is interesting as CHRM like CCME only has two analysts covering it (2 Buys, Paul Keung of Oppenheimer & Co., & James Marsh of Piper Jaffray), and has only traded since May 2010. Keep in mind the growth of CCME has accelerated in recent quarters and so is toned down in its TTM numbers due to the earlier quarters being before the accelerated growth. Also CCME has considerable value added through higher margin airport buses, tour buses and the Switow catalog & website which will impact future earnings considerably.
CCME
Valuation (MRQ)
Price/Earnings (TTM) 5.55x
Price/Sales (TTM) 2.59x
Price/Book 2.79x
Price/Cash Flow 3.75x
Profitability (TTM)
Gross Margin 71.93%
Operating Margin 65.94%
EBITDA Margin 67.52%
Profit Margin 49.26%
CCME's Gross Margin is more than 92% of other companies in the Advertising industry, which means it has more cash to spend on business operations as compared to its peers. As indicated by the Operating Margin, CCME controls its costs and expenses better than 98% of its peers.
Growth Rate (TTM)
Earnings Per Share 42.9%
Sales 131.5%
PEG Ratio .22
CCME's EPS Growth Rate is greater than 61% of its peers in the Advertising industry.
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CHRM
Valuation (MRQ)
Price/Earnings (TTM) 24.09x
Price/Sales (TTM) 2.54x
Price/Book 2.05x
Price/Cash Flow 20.38x
CHRM's P/E Ratio is greater than 68% of other companies in the Advertising industry. This typically means that investors are willing to pay more for its level of earnings relative to future growth.
Profitability (TTM)
Gross Margin 35.73%
Operating Margin 21.20%
EBITDA Margin 21.20%
Profit Margin 20.43%
CHRM's Gross Margin is comparable to other companies in the Advertising industry, which means it has relatively the same amount of cash to spend on business operations as its peers. As indicated by the Operating Margin, CHRM controls its costs and expenses better than 86% of its peers.
Growth Rate (TTM)
Earnings Per Share 513.9%
Sales 59.3%
PEG Ratio .30
CHRM's EPS Growth Rate is greater than 98% of its peers in the Advertising industry.
Result: CHARM COMMUNICATIONS INC while a good story. By comparison, due to the stellar margins and considerable moat of CCME it will become evident in the coming quarters (or even sooner) how remarkable CCME really is as an investment in the China growth story.
Respecfully, John B.
Source: ETrade 03/05/11
