NasdaqCM:OTEL

Stock Analysis Report

Executive Summary

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis.


Snowflake Analysis

Undervalued with mediocre balance sheet.


Similar Companies

Share Price & News

How has Otelco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OTEL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

47.2%

OTEL

4.9%

US Telecom

9.4%

US Market


1 Year Return

-65.3%

OTEL

-4.3%

US Telecom

-6.8%

US Market

Return vs Industry: OTEL underperformed the US Telecom industry which returned -4.3% over the past year.

Return vs Market: OTEL underperformed the US Market which returned -6.8% over the past year.


Shareholder returns

OTELIndustryMarket
7 Day47.2%4.9%9.4%
30 Day-8.8%-7.1%-3.9%
90 Day-32.1%-12.7%-16.5%
1 Year-65.3%-65.3%0.5%-4.3%-4.8%-6.8%
3 Year-15.5%-15.5%5.8%-9.8%23.4%15.2%
5 Year36.4%36.4%25.0%-3.1%41.3%25.7%

Price Volatility Vs. Market

How volatile is Otelco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Otelco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OTEL ($5.99) is trading below our estimate of fair value ($21.83)

Significantly Below Fair Value: OTEL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OTEL is good value based on its PE Ratio (2.6x) compared to the Telecom industry average (15.7x).

PE vs Market: OTEL is good value based on its PE Ratio (2.6x) compared to the US market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate OTEL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: OTEL is good value based on its PB Ratio (1.1x) compared to the US Telecom industry average (1.1x).


Next Steps

Future Growth

How is Otelco forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

8.2%

Forecasted Telecom industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Otelco has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Otelco performed over the past 5 years?

13.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OTEL has high quality earnings.

Growing Profit Margin: OTEL's current net profit margins (12.4%) are lower than last year (14.3%).


Past Earnings Growth Analysis

Earnings Trend: OTEL's earnings have grown by 13.1% per year over the past 5 years.

Accelerating Growth: OTEL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OTEL had negative earnings growth (-17.7%) over the past year, making it difficult to compare to the Telecom industry average (4.8%).


Return on Equity

High ROE: Whilst OTEL's Return on Equity (41.56%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Otelco's financial position?


Financial Position Analysis

Short Term Liabilities: OTEL's short term assets ($14.8M) exceed its short term liabilities ($12.3M).

Long Term Liabilities: OTEL's short term assets ($14.8M) do not cover its long term liabilities ($89.7M).


Debt to Equity History and Analysis

Debt Level: OTEL's debt to equity ratio (368.3%) is considered high.

Reducing Debt: OTEL had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: OTEL's debt is well covered by operating cash flow (22.4%).

Interest Coverage: OTEL's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Otelco's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate OTEL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate OTEL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OTEL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OTEL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of OTEL's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.6yrs

Average management tenure


CEO

Richard Clark (54yo)

0.25

Tenure

Mr. Richard Allen Clark serves as Chief Executive Officer at Otelco Inc. since January 1, 2020. He serves as President at Otelco Inc. since May 1, 2019. He has been Chief Executive Officer and Director of  ...


Leadership Team

NamePositionTenureCompensationOwnership
Curtis Garner
Secretary & CFO16.17yrsUS$352.58k1.09% $222.5k
Richard Clark
CEO, President & Director0.25yrno datano data
Trina Bragdon
General Counsel7.08yrsno datano data
Jerry Boles
Senior VP & Controller21.25yrsUS$232.07k0.48% $97.6k

11.6yrs

Average Tenure

67yo

Average Age

Experienced Management: OTEL's management team is seasoned and experienced (11.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Clark
CEO, President & Director0.25yrno datano data
Stephen McCall
Independent Chairman of the Board6.83yrsUS$98.00k0.29% $59.3k
Gary Sugarman
Independent Director6.92yrsUS$79.00k0.21% $42.9k
Norman Frost
Independent Director6.92yrsUS$81.50k0.24% $49.0k
Howard Haug
Independent Director15.33yrsUS$87.50k0.24% $48.8k
Brian Ross
Independent Director6.92yrsUS$74.00k0.34% $69.2k
Barbara Dondiego-Stewart
Independent Director0.92yrno data0.025% $5.1k
Dayton Judd
Independent Director0.92yrno data0.084% $17.1k

6.9yrs

Average Tenure

57.5yo

Average Age

Experienced Board: OTEL's board of directors are considered experienced (6.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: OTEL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Otelco Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Otelco Inc.
  • Ticker: OTEL
  • Exchange: NasdaqCM
  • Founded: 1998
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: US$20.497m
  • Shares outstanding: 3.42m
  • Website: https://www.otelco.com

Number of Employees


Location

  • Otelco Inc.
  • 505 Third Avenue East
  • Oneonta
  • Alabama
  • 35121
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OTELNasdaqCM (Nasdaq Capital Market)YesClass A Common StockUSUSDMay 2013

Biography

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. The company offers local services, including voice lines that provide local dial tone and calling features, such as caller identification, call waiting, call forwarding, and voicemail; long distance services; billing and collection services for other carriers under contract; and directory advertising services. It also provides network access services comprising the origination, transportation, and termination of calls of long distance, wireless, and other interexchange carriers; digital high-speed data lines and ancillary services, such as Web hosting and computer virus protection; and basic, digital, high-definition, digital video recording, video on demand, and pay per view cable television services. In addition, it offers Internet protocol television; wireless security systems and system monitoring services; and private/hybrid cloud hosting services, as well as consulting and professional IT engineering services for mission-critical software applications for small and mid-sized companies. Further, the company rents fiber to transport data and other telecommunications services. It primarily serves business and residential customers residing in and adjacent to the exchanges in Alabama, Maine, Massachusetts, Missouri, Vermont, and West Virginia; and business customers in Maine and New Hampshire. As of March 6, 2019, it operated approximately 99,000 voice and data access lines. The company was founded in 1998 and is based in Oneonta, Alabama. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 02:54
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.