NasdaqCM:OTEL

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Good value 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


Market Performance


7 Day Return

2.8%

OTEL

0.6%

US Telecom

0.07%

US Market


1 Year Return

-26.7%

OTEL

8.4%

US Telecom

8.9%

US Market

Return vs Industry: OTEL underperformed the US Telecom industry which returned 8.4% over the past year.

Return vs Market: OTEL underperformed the US Market which returned 8.9% over the past year.


Shareholder returns

OTELIndustryMarket
7 Day2.8%0.6%0.07%
30 Day1.9%0.6%-0.3%
90 Day-19.7%10.7%-1.6%
1 Year-26.7%-26.7%14.1%8.4%11.3%8.9%
3 Year172.8%172.8%28.0%9.3%46.3%36.8%
5 Year147.0%147.0%40.7%8.4%62.1%44.3%

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 ($11.88) is trading below our estimate of fair value ($58.96)

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 (4.7x) compared to the Telecom industry average (16x).

PE vs Market: OTEL is good value based on its PE Ratio (4.7x) compared to the US market (17.8x).


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 overvalued based on its PB Ratio (2.7x) compared to the US Telecom industry average (1.5x).


Next Steps

Future Growth

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

-13.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OTEL's earnings are forecast to decline over the next 3 years (-13.9% per year).

Earnings vs Market: OTEL's earnings are forecast to decline over the next 3 years (-13.9% per year).

High Growth Earnings: OTEL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: Insufficient data to determine if OTEL's revenue is forecast to grow faster than the US market.

High Growth Revenue: Insufficient data to determine if OTEL's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if OTEL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Otelco performed over the past 5 years?

19.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: OTEL's earnings have grown by 19.2% 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 (-38.3%) over the past year, making it difficult to compare to the Telecom industry average (-23%).


Return on Equity

High ROE: Whilst OTEL's Return on Equity (57.73%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: OTEL has a higher Return on Assets than the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: OTEL's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Otelco's financial position?


Financial Position Analysis

Short Term Liabilities: OTEL's short term assets ($16.3M) exceeds its short term liabilities ($12.8M)

Long Term Liabilities: OTEL's short term assets (16.3M) do not cover its long term liabilities (90.1M)


Debt to Equity History and Analysis

Debt Level: OTEL's debt to equity ratio (479.1%) 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 (26.4%).

Interest Coverage: OTEL's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

Inventory Level: OTEL has a high level of physical assets or inventory.

Debt Coverage by Assets: OTEL's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage4.8%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

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.

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

What is the CEO of Otelco's salary, the management and board of directors tenure and is there insider trading?

6.6yrs

Average management tenure


CEO

Rob Souza (66yo)

4.8yrs

Tenure

US$531,654

Compensation

Mr. Robert J. Souza, also known as Rob, serves as the President of The Granby Telephone & Telegraph Co. Mr. Souza served as the President of Otelco Inc. from May 1, 2014 to May 1, 2019 and has been its Chi ...


CEO Compensation Analysis

Compensation vs. Market: Rob's total compensation ($USD531.65K) is about average for companies of similar size in the US market ($USD509.30K).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.6yrs

Average Tenure

66.5yo

Average Age

Experienced Management: OTEL's management team is seasoned and experienced (6.6 years average tenure).


Board Age and Tenure

6.4yrs

Average Tenure

62.5yo

Average Age

Experienced Board: OTEL's board of directors are considered experienced (6.4 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$115,41718 Sep 19
Ira Sochet
EntityIndividual
Shares9,878
Max PriceUS$11.75
BuyUS$641,44827 Aug 19
Ira Sochet
EntityIndividual
Shares53,454
Max PriceUS$12.00
BuyUS$514,54216 Aug 19
Ira Sochet
EntityIndividual
Shares44,993
Max PriceUS$11.70
BuyUS$137,43131 Jul 19
Ira Sochet
EntityIndividual
Shares9,330
Max PriceUS$14.73
BuyUS$139,87126 Jul 19
Ira Sochet
EntityIndividual
Shares9,456
Max PriceUS$14.80
BuyUS$25126 Jul 19
Ira Sochet
EntityIndividual
Shares17
Max PriceUS$14.75
BuyUS$329,72119 Jul 19
Ira Sochet
EntityIndividual
Shares22,497
Max PriceUS$14.72
BuyUS$70,83817 Jul 19
Ira Sochet
EntityIndividual
Shares4,874
Max PriceUS$14.65
BuyUS$1,072,21210 Jun 19
Ira Sochet
EntityIndividual
Shares67,211
Max PriceUS$16.00
BuyUS$427,99422 May 19
Ira Sochet
EntityIndividual
Shares27,934
Max PriceUS$15.50
BuyUS$10722 May 19
Ira Sochet
EntityIndividual
Shares7
Max PriceUS$15.26
BuyUS$23,63209 May 19
Ira Sochet
EntityIndividual
Shares1,343
Max PriceUS$17.60
BuyUS$101,02402 May 19
Ira Sochet
EntityIndividual
Shares5,819
Max PriceUS$17.48
BuyUS$123,31426 Apr 19
Ira Sochet
EntityIndividual
Shares7,128
Max PriceUS$17.30
BuyUS$537,01124 Apr 19
Ira Sochet
EntityIndividual
Shares31,017
Max PriceUS$17.33
BuyUS$112,76116 Apr 19
Ira Sochet
EntityIndividual
Shares6,518
Max PriceUS$17.30
BuyUS$125,41910 Apr 19
Ira Sochet
EntityIndividual
Shares7,341
Max PriceUS$17.20
BuyUS$341,31901 Apr 19
Ira Sochet
EntityIndividual
Shares20,692
Max PriceUS$16.50
BuyUS$115,99921 Mar 19
Ira Sochet
EntityIndividual
Shares7,508
Max PriceUS$15.45
BuyUS$110,15218 Mar 19
Ira Sochet
EntityIndividual
Shares7,151
Max PriceUS$15.41
BuyUS$944,75008 Mar 19
Ira Sochet
EntityIndividual
Shares60,000
Max PriceUS$15.75
BuyUS$461,16827 Feb 19
Ira Sochet
EntityIndividual
Shares28,120
Max PriceUS$16.40
BuyUS$96,06010 Jan 19
Ira Sochet
EntityIndividual
Shares6,000
Max PriceUS$16.01
BuyUS$79,95010 Jan 19
Ira Sochet
EntityIndividual
Shares5,000
Max PriceUS$15.99
BuyUS$94,92604 Jan 19
Ira Sochet
EntityIndividual
Shares5,935
Max PriceUS$16.01
BuyUS$585,54320 Dec 18
Ira Sochet
EntityIndividual
Shares36,830
Max PriceUS$15.98
BuyUS$451,61019 Dec 18
Ira Sochet
EntityIndividual
Shares28,300
Max PriceUS$16.10
BuyUS$190,42113 Dec 18
Ira Sochet
EntityIndividual
Shares11,870
Max PriceUS$16.05
BuyUS$631,07211 Dec 18
Ira Sochet
EntityIndividual
Shares39,442
Max PriceUS$16.00
BuyUS$203,62404 Dec 18
Ira Sochet
EntityIndividual
Shares12,751
Max PriceUS$16.05
BuyUS$176,12028 Nov 18
Ira Sochet
EntityIndividual
Shares10,992
Max PriceUS$16.05
BuyUS$83,23026 Oct 18
Ira Sochet
EntityIndividual
Shares5,228
Max PriceUS$15.92

Ownership Breakdown


Management Team

  • Curtis Garner (72yo)

    Secretary & CFO

    • Tenure: 15.7yrs
    • Compensation: US$352.58k
  • Jerry Boles (67yo)

    Senior VP & Controller

    • Tenure: 20.8yrs
    • Compensation: US$232.07k
  • Rob Souza (66yo)

    CEO & Director

    • Tenure: 4.8yrs
    • Compensation: US$531.65k
  • Trina Bragdon

    General Counsel

    • Tenure: 6.6yrs
  • Richard Clark (53yo)

    COO & President

    • Tenure: 0.4yrs

Board Members

  • Stephen McCall (48yo)

    Chairman of the Board

    • Tenure: 6.3yrs
    • Compensation: US$98.00k
  • Gary Sugarman (66yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$79.00k
  • Norman Frost (64yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$81.50k
  • Howard Haug (68yo)

    Independent Director

    • Tenure: 14.8yrs
    • Compensation: US$87.50k
  • Rob Souza (66yo)

    CEO & Director

    • Tenure: 4.8yrs
    • Compensation: US$531.65k
  • Brian Ross (61yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$74.00k
  • Barbara Dondiego-Stewart (43yo)

    Director

    • Tenure: 0.4yrs
  • Dayton Judd (47yo)

    Director

    • Tenure: 0.4yrs

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$40.522m
  • Shares outstanding: 3.41m
  • 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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 00:28
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.