FAST Graphs At-A-Glance

Articles which show the principles for reading and analyzing FAST Graphs At-A-Glance.

CARBO Ceramics Inc: Continuing to Grow With a Lot of Gas

FAST Graphs - Friday, April 20, 2012

The growing interest in natural gas as a cheaper and cleaner fuel source has created a large increase in fracturing, although there is a lot of controversy surrounding fracturing and its environmental safety.  On the other hand, CARBO Ceramics Inc (CRR) does provide a profitable containment business that we feel enhances their appeal.  After being significantly overvalued throughout most of 2011, we believe the current correction in the stock price may represent an attractive time to invest in this high-quality and timely business.

This article looks at CARBO Ceramics Inc, a Dividend Contender, through the lens of the F.A.S.T. Graphs™ Fundamentals Analyzer Software Tool.  Since a picture is worth a thousand words, the reader will be provided the “essential fundamentals at a glance” expressed vividly in pictures.   In order to provide you the opportunity to research this company deeper and faster we are providing a link to a live, fully functioning earnings and price correlated set of graphs found here.  (Tip:  Run your mouse over the various lines and watch the graphs come to life).

A Dividend Contender is defined as a company that has increased its dividend for a minimum of 10 – 24 straight years. CARBO Ceramics Inc is a Dividend Contender that has raised its dividend every year for 11 consecutive years.  The complete Dividend Contenders list is compiled courtesy of David Fish(Open as an excel spreadsheet and look at the tabs on the bottom to find the Dividend Contender list).

About CARBO Ceramics Inc: from their website

“CARBO is the world's largest supplier of ceramic proppant for fracturing oil and gas wells; provider of the world's most popular fracture simulation software; and a provider of fracture design and consulting services. The company also provides a broad range of technologies for spill prevention, containment and countermeasures, along with geotechnical monitoring.”

CARBO Ceramics Inc: A Dividend Contender with 11 Consecutive Years of Dividend Increases

Learning from the Past – Looking at Earnings Only

Since dividends are paid out of earnings, a clear perspective of a company’s historical earnings growth record is a vital component of a dividend investor’s prudent due diligence process. The following graph plots CARBO Ceramics Inc’s earnings per share since 1998.  A quick glance to the right of the graph shows that CARBO Ceramics Inc has increased earnings at a compounded rate of 13.1% (see purple circle on graph) per annum.

Earnings Determine Market Price and Dividend Income: The following earnings and price correlated F.A.S.T. Graphs™ clearly illustrates the importance of earnings to both price movement and dividend income. The earnings growth rate line or True Worth ™ line (orange line with white triangles) is correlated with the historical stock price line.  On graph after graph the lines will move in tandem.  If the stock price strays away from the earnings line (over or under), inevitably it will come back to earnings.

Since dividends are paid out of earnings, and therefore represent additional return on top of what the market capitalizes earnings at, they are depicted by the light blue shaded area and stacked on top of the earnings line.  Therefore, a quick visual of these two important components is simultaneously revealed:

1.    The additional return that dividend paying stocks provide.

2.    The percentage of earnings paid to shareholders as dividends (payout ratio).

The value in this article is through carefully analyzing the earnings and price correlated fundamentally based graphs.  Notice that one glance tells you how well the company has performed on an operating basis historically and how the market valued that historical performance.  Therefore, the reader is free to discover whether or not current valuations make sense based on historical norms coupled with fundamental values.  Instead of opinion, this article is designed to produce facts that can be analyzed to the readers investing benefit.

Performance Table: Capital Appreciation and Dividend Income CARBO Ceramics Inc

The associated performance results with the earnings and price correlated graph, validates the above discussion regarding the two components of total return:  Capital appreciation and dividend income. Dividends are included in the total return calculation and are assumed paid, but not reinvested.

When presented separately like this, the additional rate of return a dividend paying stock produces for shareholders becomes undeniably evident. In addition to the 10.4% capital appreciation (Closing Annualized ROR), long-term shareholders of CARBO Ceramics Inc would have received an additional $27,643.26 in dividends that increased their total return from 10.4% to 10.9% per annum.

(Note:  Since this is a Dividend Contender it  has raised its dividend every year for at least 10-24  years, therefore,  negative dividend growth rates shown, if any, will be attributed to special additional dividends paid in excess of the company’s regularly reported dividend rate)

The following graph plots the historically normal PE ratio (the dark blue line) correlated with 10-year Treasury note interest. Notice that the current price earnings ratio on this quality company is as low as it has been since 1998.

A further indication of valuation can be seen by examining a company's current price to sales ratio relative to its historical price to sales ratio. The current price to sales ratio for CARBO Ceramics Inc is 3.26, which is historically low.

 

Looking to the Future

Extensive research has provided a preponderance of conclusive evidence that future long-term returns, and the dividend and its growth rate are a function of two critical determinants:

1. The rate of change (growth rate) of the company's earnings

2. The price or valuation you pay to buy those earnings

Therefore, forecasting future earnings growth, bought at sound valuations, is the key to safe, sound, and profitable performance.

Therefore, it logically follows that measuring performance without simultaneously measuring valuation is a job half done. At its current price, which is attractively aligned with its True Worth™ valuation, CARBO Ceramics Inc represents a potential opportunity to invest in a Dividend Contender at a reasonable price. The important factor is that CARBO Ceramics Inc has real assets and cash flow underpinning its stock price. This solid economic foundation offers shareholders the potential for both a strong margin of safety and an opportunity for an increasing dividend income stream and potentially attractive future returns.

The Estimated Earnings and Return Calculator Tool is a simple yet powerful resource that empowers the user to calculate and run various investing scenarios that generate precise rate of return potentialities. Thinking the investment through to its logical conclusion is an important component towards making sound and prudent commonsense investing decisions.

The consensus of 8 leading analysts reporting to Capital IQ forecast CARBO Ceramics Inc long-term earnings growth at 35.2%.  CARBO Ceramics Inc has 0% debt. CARBO Ceramics Inc is currently trading at a P/E of 15, which is outside the value corridor (defined by the five orange lines) of a maximum P/E of 42.2. If the earnings materialize as forecast, CARBO Ceramics Inc’s True Worth valuation would be $992.05 at the end of 2017, which would be a 53.2% annual rate of return from the current price, including assumed dividends.

Earnings Yield Estimates

Discounted Future Cash Flows: All companies derive their value from the future cash flows (earnings) they are capable of generating for their stakeholders over time. Therefore, because Earnings Determine Market Price and dividend income in the long run, we expect the future earnings of a company to justify the price we pay.

Since all investments potentially compete with all other investments, it is useful to compare investing in any prospective company to that of a comparable investment in low risk Treasury bonds. Comparing an investment in CARBO Ceramics Inc to an equal investment in 10-year Treasury bonds illustrates that CARBO Ceramics Inc’s expected earnings would be 20 times that of the 10-Year T-Bond Interest. (See EYE chart below). This is the essence of the importance of proper valuation as a critical investing component.

This report presents essential "fundamentals at a glance" on Dividend Contenders CARBO Ceramics Inc, illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, it's imperative that the reader conduct his or her own due diligence in order to validate whether the consensus estimates seem reasonable or not.  Follow the link we provided at the beginning of this article to a fully functioning F.A.S.T. Graphs™ on CARBO Ceramics Inc.

Summary & Conclusions

CARBO Ceramics Inc is expected to grow at a very strong rate over the next three to five years.  After its price being so far ahead of itself, recent controversy surrounding fracturing has brought their valuations back to sane levels.  Consequently, we believe that the stock looks very attractively valued at today’s prices.  Therefore, investors seeking significant above-average growth with a moderate yield that could grow at above-average rates might want to consider looking more closely at this exciting fast-growing mid-cap company.  However, a comprehensive due diligence effort is highly recommended.

Disclosure:  Long CRR at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Comments
Anonymous commented on 11-Sep-2012 10:32 PM
Audiences forLouis Vuitton Handbags outletthe traditionCoach Factory outletl three network telecasts grew
last year by an average of 4.5 percent, the first real uptick in a deLouis Vuitton Handbagsade. Cable news grew asCoach Factorywell,
but just by 1 percent. CNN"s audience grew for the secondPrada OutletstraiCoach Outlet Onlineht year. Fox"s audience declined,
but it remains by far the rPrada bagstings leader of the mCoach Outletjor cable news netCoach
Outlet Onlineorks, the report saidCoach Outlet
Anonymous commented on 10-Oct-2012 12:00 PM
karen millen outlet with confident WAwYcPKThttp://www.karen-millenoutlet.co.uk/
Anonymous commented on 16-Oct-2012 04:16 AM
designer handbags online to your friends rsoEOUePhttp://shopdesigneronline.smartlog.dk/shop-designer-online-post817703
Anonymous commented on 18-Oct-2012 10:58 AM
But a smiling visitant here to share the love (:, btw outstanding design and style .
australian online casino gamesonline pokiesaustralian online casino
Anonymous commented on 18-Oct-2012 01:48 PM
you're truly a excellent webmaster. The site loading velocity is incredible. It seems that you are doing any unique trick. In addition, The contents are masterpiece. you've done a great activity in this topic!best sump pump
Anonymous commented on 19-Oct-2012 02:53 AM
The must have summer
Canada Goose JacketsOutlet styles include the timeless denim and leather as well as cropped and trench-style style items.
Canada Goose Parkas Outletare great in winter for warmth; they can be great on different styles and can go with casual or formal looks.The
Canada Goose OutletExpedition Parka provides heavy-duty warmth thanks to its high-quality duck down insulation.It is not a novelty that military style tops the leading fashion trends
Canada Goose Jackets Outletdue to its refined and classic influences and qualities.
Anonymous commented on 19-Oct-2012 04:50 AM
Designs of this season give you the unlimited cool feelings in this cool summer. The new designs of Coach products in the Coach Outlet enrich our daily life.
Anonymous commented on 19-Oct-2012 10:46 AM
I understand that in Egyptian hieroglyphics Louis Vuitton Official Website the course of development from ideograms to phonetic writing can be studied.Regarding the craft,the goods fromCoach Outlet Store is tight,the seams are aligned and details emulate the designer's actual handbags.west plus southwest around the commune,Louis Vuitton Online Store is usually a pure gardening plus Commune.Coach Outlet Online The staff was adamant about the policy even though they acknowledged there was nothing stopping us from coming in the next day and purchasing from another shop girl.Louis Vuitton Outlet iphone cases I was excited to see this coat online since I love Louis Vuitton, and I needed a new coat like this.This Louis Vuitton Canada for sale belongs to the sounding just what are termed asLouis Vuitton vintage best sellers.
Anonymous commented on 19-Oct-2012 03:36 PM
I like this post, enjoyed this one thanks for posting. "The universe is not hostile, nor yet is it unfriendly. It is simply indifferent." by John Andrew Holmes.Look Here Try These Outhelpful hintsuseful linkRead Full Report
Anonymous commented on 21-Oct-2012 10:46 AM
site link Appreciate it for helping out, wonderful info. "In case of dissension, never dare to judge till you've heard the other side." by Euripides.via
Anonymous commented on 21-Oct-2012 04:34 PM
I went over this website and I conceive you have a lot of wonderful info, bookmarked (:.halogen cooker reivews
Anonymous commented on 22-Oct-2012 02:19 AM
order an cheap watches with confident IVjntjWdhttp://www.replica--watches.com/
Anonymous commented on 22-Oct-2012 02:40 PM
Thanks for sharing excellent informations. Your site is very cool. I am impressed by the details that you have on this site. It reveals how nicely you understand this subject. Bookmarked this web page, will come back for more articles. You, my pal, ROCK! I found simply the info I already searched all over the place and simply could not come across. What a perfect web-site.casino
Anonymous commented on 22-Oct-2012 05:19 PM
Wow, superb weblog format! How lengthy have you ever been blogging for? you made running a blog look easy. The entire glance of your site is wonderful, let alone the content material!Dehumidifier review |coffee grinder | Best Generator | Humidifier | best leaf blower | paint sprayers

Post a Comment




Captcha Image


Testimonials


“I appreciate your work, Chuck. As a subscriber to FAST Graphs™, I use the tool to decide on whether to purchase additional shares of what I currently hold or to add a new holding. Your articles help me make full use of the tool and give other readers valuable information, if they take the time to learn. One of the biggest enhancements that I use is the FFO data added for MLPs and REITs.”


“When FAST Graphs™ were unavailable because of Hurricane Sandy, I realized how much I need them in order to make investment decisions.

(Wish I could be) Long FAST Graphs!!!”


“One more vote for the value of FAST Graphs™; just started a subscription to Chuck's great service (premium), and am having a ball analyzing so many stocks quickly.”


“I feel very ill-equipped to make investment decisions without Fast Graphs. :-)”


“Yesterday, I signed up for your F.A.S.T. Graphs™. It's a really amazing, valuable tool for checking over/undervaluation of stocks. Wish I had it years and years ago!!”


“Love the F.A.S.T. Graphs™: One glance and you know a whole lot.”


“About Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


"Chuck -- Your proprietary F.A.S.T. Graphs™ are a VERY impressive tool!"


“If there were an Investor Hall of Fame for people who have helped others with their investing, and sharing valuable information, you and your F.A.S.T. Graphs™ would get one of my selections.”


“I love Chuck's F.A.S.T. Graphs™! Well worth the price of admission for what he gives you.”


"Chuck - Thank you for your well thought out articles. I tend to be a visual type of person so I really appreciate the F.A.S.T. Graphs™ approach."


"Great article, as always! I always look forward to your articles, and am especially eagerly awaiting your next in this series. I find the F.A.S.T. Graphs™ extremely helpful."


“Your F.A.S.T. Graphs™ put all of this in a single artful picture and the accompanying spreadsheets hammer home the point.”


“I use the F.A.S.T. Graphs™ method to evaluate all of my ideas. I recommend it for individual investors, since it helps them focus on data and get past the many emotional arguments.”


“I recently subscribed to the F.A.S.T. Graphs™, and these articles are helping me learn how to better use them. They really do give you a good quick look at the valuations picture. A much needed tool!”


“I also always appreciate the clear-cut information provided through your F.A.S.T. Graphs™ and articles.”


“Thanks, Chuck, for your F.A.S.T. Graphs™. Each of these graphs is worth 1,000 words in describing a company's growth, consistency and valuation. Thanks for sharing your graphs.”


“Thanks, Chuck. Love the F.A.S.T. Graphs™! It makes investing so much more clear.”


“Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


”I am amazed at the usefulness of your F.A.S.T. Graphs™ and I plan on using them for a long time to come.”


“Chuck's F.A.S.T. Graphs™ will give you a tool to find those well chosen stocks...”


“Thanks for the F.A.S.T. Graphs™, Chuck. They are the best tool I've used.”


Recent Posts


Tags


Archive

    Testimonials


    “I appreciate your work, Chuck. As a subscriber to FAST Graphs™, I use the tool to decide on whether to purchase additional shares of what I currently hold or to add a new holding. Your articles help me make full use of the tool and give other readers valuable information, if they take the time to learn. One of the biggest enhancements that I use is the FFO data added for MLPs and REITs.”


    “When FAST Graphs™ were unavailable because of Hurricane Sandy, I realized how much I need them in order to make investment decisions.

    (Wish I could be) Long FAST Graphs!!!”


    “One more vote for the value of FAST Graphs™; just started a subscription to Chuck's great service (premium), and am having a ball analyzing so many stocks quickly.”


    “I feel very ill-equipped to make investment decisions without Fast Graphs. :-)”


    “Yesterday, I signed up for your F.A.S.T. Graphs™. It's a really amazing, valuable tool for checking over/undervaluation of stocks. Wish I had it years and years ago!!”


    “Love the F.A.S.T. Graphs™: One glance and you know a whole lot.”


    “About Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


    "Chuck -- Your proprietary F.A.S.T. Graphs™ are a VERY impressive tool!"


    “If there were an Investor Hall of Fame for people who have helped others with their investing, and sharing valuable information, you and your F.A.S.T. Graphs™ would get one of my selections.”


    “I love Chuck's F.A.S.T. Graphs™! Well worth the price of admission for what he gives you.”


    "Chuck - Thank you for your well thought out articles. I tend to be a visual type of person so I really appreciate the F.A.S.T. Graphs™ approach."


    "Great article, as always! I always look forward to your articles, and am especially eagerly awaiting your next in this series. I find the F.A.S.T. Graphs™ extremely helpful."


    “Your F.A.S.T. Graphs™ put all of this in a single artful picture and the accompanying spreadsheets hammer home the point.”


    “I use the F.A.S.T. Graphs™ method to evaluate all of my ideas. I recommend it for individual investors, since it helps them focus on data and get past the many emotional arguments.”


    “I recently subscribed to the F.A.S.T. Graphs™, and these articles are helping me learn how to better use them. They really do give you a good quick look at the valuations picture. A much needed tool!”


    “I also always appreciate the clear-cut information provided through your F.A.S.T. Graphs™ and articles.”


    “Thanks, Chuck, for your F.A.S.T. Graphs™. Each of these graphs is worth 1,000 words in describing a company's growth, consistency and valuation. Thanks for sharing your graphs.”


    “Thanks, Chuck. Love the F.A.S.T. Graphs™! It makes investing so much more clear.”


    “Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


    ”I am amazed at the usefulness of your F.A.S.T. Graphs™ and I plan on using them for a long time to come.”


    “Chuck's F.A.S.T. Graphs™ will give you a tool to find those well chosen stocks...”


    “Thanks for the F.A.S.T. Graphs™, Chuck. They are the best tool I've used.”