Time Warner Inc. (NYSE:TWX) March 18, 2015

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TWX-US
Implied Price
OVERVALUED
59.78 88.13
A Price as of Close Mar 16 85.45 USD
B CapitalCube Median Implied Price 69.52 USD * CapitalCube Price is over trading range * CapitalCube Price is below trading range
CapitalCube Estimate Range 64.20 - 74.84 USD NA
52 Week Range 59.78 - 88.13 USD
Earnings Momentum Score
 0  100
A Earnings Score (TWX) 19.49
B Earnings Score(Peer Median) 30.60
Latest Filing date December 31, 2014
Fundamental Score
 0  100
A Fundamental Score (TWX) 47
B Fundamental Score(Peer Median) 53
Dividend Score
 0  100
A Dividend Quality Score (TWX) 83
B Dividend Quality Score (Peer Median) 67
Dividend Yield
0.80 4.75
A Dividend Yield (TWX) 1.51
B Dividend Yield (Peer Median) 1.51
Analysis
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Fundamental Analysis

Capital Investment Strategy The company's relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode. Maintenance Mode

Maintenance Mode: Companies where 3 year change in Capital and sustained Operating Returns (3-year average ROIC) are both below the peer median, suggesting minimal reinvestment in a problematic business.
The company's relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.

Earnings Leverage Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings. Earnings Focus

Earnings Focus: Companies where the yearly Revenue Growth is below peer median while Net Income Growth is above peer median suggesting that the company is focused on earnings.
Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.

Leverage & Liquidity TWX-US has additional debt capacity.

TWX-US has additional debt capacity.

Relative Valuation Time Warner Inc.'s current Price/Book of 2.90 is about median in its peer group.

Time Warner Inc.'s current Price/Book of 2.90 is about median in its peer group.

Valuation Drivers The market expects TWX-US to grow faster than its peers and for the company to improve its current ROE.

The market expects TWX-US to grow faster than its peers and for the company to improve its current ROE.

Drivers of Margin The company's margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.

The company's margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.

Growth Expectations While TWX-US's revenues have increased slower than peer median, the market currently gives the company a higher than peer median PE ratio and may be factoring in some sort of a strategic play. Strategic Play

Strategic Play: Companies that exhibit expected earnings growth (P/E) that is above peer median, but historical revenue growth (over 3 years) that is below peer median, indicative of a startup or anticipated strategic play.
While TWX-US's revenues have increased slower than peer median, the market currently gives the company a higher than peer median PE ratio and may be factoring in some sort of a strategic play.

Operations Diagnostic TWX-US's relative asset efficiency and net profit margins are both around the median level.

TWX-US's relative asset efficiency and net profit margins are both around the median level.

Sustainability of Returns TWX-US's return on assets has improved from below median to about median among its peers over the last five years.

TWX-US's return on assets has improved from below median to about median among its peers over the last five years.

Likely Corporate Actions

Dividend Action

While TWX-US has a high quality dividend and a moderate cash cushion, its relative operating performance is not strong enough to suggest an increase in the dividend.

Equity Action

The company's current share price is not sufficiently lower than its 52-week high (currently about 3.04% below) and does not justify a share buyback as the best use of cash at this time.

M&A Action

Though TWX-US has the size (by book value) to acquire other firms, acquisitions within this peer group might result in a lower market-expected growth.

Dividend Quality

Dividend Coverage Moderate

The ending cash balance, with a dividend coverage of 2.36x, provides a moderate cushion in case of a significant reduction of cash flows in the future.

Dividend Quality High Quality

High Quality: Dividends that are fully covered from operating and investing cash flow, net of any cash outflow from debt repayments and net of a decrease in deposits (for banks) are considered to be high quality. For more information, please refer to the Corporate Actions report.
Over the last twelve months (prior to December 31, 2014), TWX-US paid a high quality dividend, which represents a yield of 1.49% at the current price.

Dividend Quality Trend Consistent High Quality

Consistent High Quality: Over the last 5 years, all dividends paid by the company were of high quality. For more information, please refer to the Corporate Actions report.
Dividends paid during each of the last five years were consistently of high quality.

Accounting Red Flags

Accounting Quality

TWX-US's net income margin for the last twelve months is around peer median, which combined with relatively low accruals suggests a possible overstatement of its reported net income.

Management of Reserves

Time Warner Inc.'s accrual levels over the last twelve months are modestly negative but less than the peer median which suggests some amount of draining in its reserves.

Material Categories

Excluding the effects of change in revenue, the accounting categories causing the most impact on the movement of net income from the prior period to the current period are Intangible Assets, SG&A and Accounts Receivable.
Characteristics
Key Valuation Items

Price to Book (P/B)

2.90

Price to Earnings (P/E)

18.63

Price to Sales

2.53

Price / EBITDA

9.53

Price to Assets

1.12

Price / FCF

22.13

EV / EBITDA

12.22

EV / FCF

28.36

Dividend Yield

1.51

PEG Ratio

1.64
Profitability

Gross Margin

44.07

EBIT Margin

23.88

Net Margin

13.56

FCF Margin

11.41

Operating Margin

23.88

Pre-Tax Margin

16.65

ROE

14.01

ROIC

7.85

ROA

5.72
Efficiency

Debt / Equity

91.90

Debt / Market

31.65

Debt / Book

Debt / EV

24.73

Coverage Ratio

61.24

Interest Coverage

4.96

Cash Days

29.10

Working Cap. Days

54.79

Receivable Days

101.24

Payable Days

17.50

Inventory Days

24.21

Sales / Assets

0.42
Growth

Earnings Growth YOY

8.73

Revenue Growth YOY

-5.69

Oper. CF Growth YOY

-0.89

EPS Growth YOY

11.34

FCF Growth YOY

3.05
Price History

Peers

FA Score

DQ Score

close

52 week range

85.45

59.78

88.13

USD

107.37

76.31

107.73

USD

62.08

48.83

67.22

USD

69.32

63.11

89.76

USD

158.38

128.78

159.94

USD

72.20

52.73

77.62

USD

Company Profile

Time Warner, Inc. is a media and entertainment company. It operates through Turner, Home Box office, Warner Bros and Time, Inc. business segments. The Turner segment consisting principally of cable networks and digital media properties. The Home Box Office segment consisting principally of premium pay television services domestically and premium pay and basic tier television services internationally. The Warner Bros segment principally consisting of feature film, television, home video and videogame production and distribution. The Time, Inc. segment consisting principally of magazine publishing and related websites and operations. The company was founded on January 10, 1990 and is headquartered in New York, NY.

Closing Stock Price

USD 85.45

As of Date

March 16, 2015

One Year Performance

34.044415062536%

One Month Performance

1.8838678907834%

Industry Group

Media Conglomerates

52 wk. Range

USD 59.778865469577 - USD 88.13

Market Cap (Millions)

USD 70968.1049

Total Shares Outstanding

832
Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

April 29, 2015

Filing Currency

USD

Listed Exchange

NYSE
Peers


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New Filings
11h
$TWX : New SEC Filing for TWX: Form 8-K, No. 0001193125-15-095496 http://stks.co/i1z4G
Mar 17 8:54 PM
Conference Call Transcripts
11h
Time Warner: Amendments To Articles Of Incorporation Or Bylaws, Change In Fiscal Year http://stks.co/t1iGL $TWX
Mar 17 8:50 PM
FinancialJuice
11h
Sources say CBS $CBS CEO Moonves considered merger deal with Time Warner $TWX
Mar 17 7:59 PM
Joao Afonso
12h
$TWX From blog last night! Gave a nice step for the breakout ahead! Long setup
Mar 17 7:44 PM
Joao Afonso
19h
Watchlist for Tuesday 17, $HMY , $CIEN , $FLIR , $YHOO , $BABA , $GNTX , $TWX , $XNPT http://stks.co/d1u80 GL
Mar 17 12:49 PM
FinSentS
20h
$TWX :US Grupo Televisa: A Good Time To Look South For Opportunity #TIME WARNER INC http://stks.co/a1u8B #SP500
Mar 17 11:16 AM
TalkMarkets
1d
Should You Cancel Your Phone, TV And Internet Service Contracts? $DTV $CVC $TWX $VZ $T $DISH $CCOI $CCV http://stks.co/j1yq1
Mar 17 6:9 AM
Joao Afonso
1d
Mar 16 9:36 PM
Conference Call Transcripts
1d
Time Warner Inc. director was just granted 166 restricted shares http://stks.co/f1yeA $TWX
Mar 16 9:13 PM
Conference Call Transcripts
1d
Time Warner Inc. just filed its Statement of changes in beneficial ownership of securities http://stks.co/e1twA $TWX
Mar 16 9:9 PM
TheStreet
1d
Time Warner (TWX) Stock Higher Today After HBO NOW Deal With Cablevision $TWX http://stks.co/h1yju
Mar 16 7:46 PM
Wyatt Research
1d
HBO and Apple vs. Netflix: A Streaming War Is Brewing http://stks.co/p1hi1 $AAPL $NFLX $TWX $DIS
Mar 16 6:54 PM
1
TalkMarkets
1d
Should You Cancel Your Phone, TV And Internet Service Contracts? $DTV $CVC $TWX $VZ $T $DISH $CCOI $CCV http://stks.co/f1yVL
Mar 16 5:16 PM
Cody Freeman
1d
$TWX lots of "cups" under construction. I count 3. Weekly, Daily, 30 min. timeframes lining up
Mar 16 5:15 PM
1
Jason
1d
How BuzzFeed (Yes, BuzzFeed) Beats The Market http://stks.co/j1yYK $FB $TWTR $DIS $YHOO $NFLX $AAPL $GOOG $TWX $SBUX $AMZN
Mar 16 4:34 PM
TheStreet
1d
HBO's Durst Series Shows Documentaries May Be the Next Big Thing $TWX http://stks.co/g1yEJ
Mar 16 4:25 PM
Cody Freeman
3d
Lg-Cap Portfolio Review: Top Performers Lead http://stks.co/r1h9Q $DIS $SBUX $UNH $BMY $AAPL $BA $LMT $TWX $UNP $SPY
Mar 15 1:50 PM
Howard Lindzon
3d
"@StockTwits Saturday Links: Soaring Solar http://stks.co/c1tUC via @abnormalreturns $TWX $NFLX $MCD $SHAK $GOOG $DIS $TAN "
Mar 15 12:28 AM
1
Cody Freeman
3d
Lg-Cap Portfolio Review: Top Performers Lead http://stks.co/r1h5R $DIS $SBUX $UNH $BMY $AAPL $BA $LMT $TWX $UNP $SPY
Mar 14 9:58 PM
Clark Joseph
4d
A Jerry big deal: 'Seinfeld' near streaming agreement $SNE $CMCSA $DIS $FOXA $YHOO $AMZN $NFLX $TWX
Mar 14 6:29 PM
StockTwits
4d
Saturday Links: Soaring Solar http://stks.co/p1hFU via @abnormalreturns $TWX $NFLX $MCD $SHAK $GOOG $DIS $TAN
Mar 14 4:2 PM
2
Tadas Viskanta
4d
Saturday links: red-light cameras, domain theft and overpraising your kids. http://stks.co/i1y2d $TWX $NFLX $MCD $SHAK $GOOG $DIS $TAN
Mar 14 12:14 PM
Shane Leonard, CFA
5d
Time Warner upgraded to a 5 star stock @StockflareUS. See: http://stks.co/r1gnZ #stocks $TWX
Mar 13 4:50 PM
ValueWalk
5d
Equities Lead Canyon Value To Strong February by @mr_ide http://stks.co/d1t4j $CMCSA $TWX http://stks.co/a1t73
Mar 13 2:39 PM
ValueWalk
5d
Due Diligence: This Strategy Could Potentially Save Billions http://stks.co/q1gq0 $AOL $TWX @capitalistexp http://stks.co/t1gyG
Mar 13 2:9 PM
Jason
5d
How Apple Gave HBO Leverage To Use Against Cable $AAPL $AMZN $CMCSA $NFLX $TWX http://stks.co/h1xrg
Mar 13 11:55 AM
1 1
Day Traders Group
5d
Our highly traded bullish stocks scan http://stks.co/e1sxV $SNCR $EW $BBT $GSM $PACW $OCN $GSM $TWX $RTRX & More
Mar 13 2:11 AM
V. Drago
5d
@TimeIsNow Arrow & the Flash on CW $CBS $TWX are far better than anything Marvel has produced since the first Iron Man.
Mar 12 8:48 PM
52
Denise Castellucci
5d
@Correction_market Stop! December is so far, far away. Anticipating like crazy, but $TWX 's San Andreas will be here soon
Mar 12 8:5 PM
10
Jake
6d
"@vector2 relative strength yesterday for me in $BLCM $BMRN $ETFC $ICPT $JNPR $KITE $LXRX $PRTK $TWX $UPL " Lxrx & upl long term or trades?
Mar 12 7:0 PM
Please Login to see your stream! No Twits! Your stream is empty No Twits for TWX!

Closing Stock Price

USD 85.45

As of Date

March 16, 2015

One Year Performance

34.04%

One Month Performance

1.88%

Industry Group

Media Conglomerates

52 wk. Range

USD 59.778865469577 - USD 88.13

Market Cap (Millions)

USD 70,968.105

Total Shares Outstanding (Millions)

832.00
Latest Filing Dates

Annual

December 31, 2014

Semi Annual

N/A

Quarterly

December 31, 2014

Next Release Date

April 29, 2015

Filing Currency

USD

Listed Exchange

NYSE
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