LSC Communications, Inc. provides various traditional and digital print services, print-related services, and office products in the United States and internationally.
The last earnings update was 65 days ago.
Discounted Cash Flow Calculation for DB:2L3 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:2L3 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
LSC Communications's share price is below the future cash flow value, and at a moderate discount (> 20%).
LSC Communications's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
LSC Communications's earnings available for a low price, and how does
this compare to other companies in the same industry?
LSC Communications is expected to become profitable in the next 1-3 years, this is considered high growth.
Unable to determine if LSC Communications is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
LSC Communications's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
LSC Communications's finances.
The net worth of a company is the difference between its assets and liabilities.
LSC Communications is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
LSC Communications's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
LSC Communications's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 1.1x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Thomas J. Quinlan, III, also known as Tom, is the Chairman, President and Chief Executive Officer of LSC Communications, Inc. since October 2016. Mr. Quinlan was a Co-Founder and Director of Work-Bench Ventures. He served as the Chief Executive Officer and President of R.R. Donnelley & Sons Company from April 2007 to September 30, 2016 and also served as its Chief Financial Officer from April 2006 to October 2007, Interim Chief Financial Officer since May 11, 2006, Group President of Global Services from October 2006 to April 2007 and Executive Vice President of Operations from joining it in February 2004 to October 2006. He has previous finance and treasury experience at Walter Industries Inc., Marsh & McLennan Companies Inc. and Kidder Peabody. He served as the Chief Executive Officer and President of The Nielsen Company (US), LLC. He served as an Executive Vice President of Office of the Chief Executive at Moore Wallace Inc. and also served as its Executive Vice President of Business Integration since May 2003, Executive Vice President of Operations since May 2004, Member Office of the Chief Executive of Moore Wallace Inc. since January 2003, Executive Vice President since July 2002, Executive Vice President of Corporate Operations and Treasurer from July 2002 to December 2002. At Moore Wallace, he was primary responsibility for the integration of Moore Corporation Limited and Wallace Computer Services. He served as an Executive Vice President and Treasurer of Moore Corporation Limited from December 2000 to December 2002. He served as Vice President of Sales for Paylocity Corporation since 2005. From April 2000 to September 2000, he served as an Executive Vice President and Treasurer of Walter Industries Inc. From July 1998 to November 1999, he served as Senior Vice President of World Color LLC and also served as its Treasurer from July 1997 to July 1998. From 1994 to 1999, he served at World Color. He served as Vice President of Quebecor World USA, Inc. since July 1997 and also served as its Assistant Treasurer from February 1994 to July 1997. He served as an Executive Vice President and Treasurer of Walter Energy, Inc., from April 2000 to September 2000. He has familiarity with a broad range of operational issues, including sales, manufacturing and corporate staff functions, as a result of his many experiences in management roles across several industries. Prior to World Color, he served as a Manager of Treasury Administration at Marsh & McLennan Companies Inc. He is active in supporting organizations that focus on literacy, health and development and serves as a Director for the National Merit Scholarship Corporation and on the Board of Trustees for Pace University. He served as a Director of Donnelley Financial Solutions, Inc. until September 30, 2016. He served as a Director of R.R. Donnelley & Sons Company from 2007 to September 30, 2016. The Advisory Board of New York University's Graphic Communications Management and Technology Program chose Mr. Quinlan to receive its 2011 Prism Award, which recognizes distinguished leadership in the graphic communications media industry. In 2011, he received AJC's National Human Relations Award, which honors professional and philanthropic leadership. He has over 15 years of sales and management experience. Mr. Quinlan holds an MBA in Finance from St. John's University, which recognized him with its Outstanding Alumni Achievement Medal in 2010 and a Bachelors of Science in Finance and Business Administration from Pace University, which conferred upon him an Honorary Doctorate in Commercial Science and presented him with its 46th Leaders in Management Award in 2009. He holds a Bachelor's degree in Accounting from St. Mary's University and a Masters in Accounting from Roosevelt University.
Tom's compensation has been consistent with company performance over the past year.
Tom's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the LSC Communications management team is about average.
Chief Financial Officer
Chief Accounting Officer & Controller
Chief Administrative Officer
Chief Strategy & Supply Chain Officer
Senior VP of Investor Relations & Treasurer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the LSC Communications board of directors is about average.
LSC Communications, Inc. provides various traditional and digital print services, print-related services, and office products in the United States and internationally. It operates through Magazines, Catalogs and Logistics; Book; Office Products; and Other segments. The Magazines, Catalogs and Logistics segment produces magazines and catalogs, as well as provides logistics solutions to the company and other third parties. This segment also provides other print-related services, including mail-list management and sortation. The Book segment produces books for publishers; and provides supply-chain management, and warehousing and fulfillment services, as well as e-book formatting for book publishers. The Office Products segment manufactures and sells branded and private label products in various categories, such as filing products, envelopes, note-taking products, binder products, and forms. The Other segment produces magazines, catalogs, directories, statements, forms, and labels, as well as provides packaging and pre-media services; and provides outsourced print procurement and management services. LSC Communications, Inc. serves printed products service retailers, including catalogers and merchandisers; publishers of magazines, books, and directories; online retailers; and office superstores, office supply wholesalers, independent contract stationers, mass merchandisers, and retailers and e-commerce resellers through the United States Postal Service or foreign postal services, as well as through direct shipment and online retailers. The company was founded in 2016 and is based in Chicago, Illinois.
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