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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Interpublic Group Of Companies, Inc. (XNYS:IPG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IPG
Name:
THE INTERPUBLIC GROUP OF COMPANIES, INC. (XNYS:IPG)
Sector:
- 664300.00K
Industry:
Advertising Agencies
CEO:
Mr. Michael Roth
Total Employees:
55,600
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 722.08% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE INTERPUBLIC GROUP OF COMPANIES, INC.(IPG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ADVERTISING AGENCIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
27.23
One Month Price Target:
$27.39
Six Month Price Target :
$28.18
Likely Price in One Year's Time:
Ticker:
$29.13
Likely Trading Range Today Under (Normal Volatility)
$27.12
Price Upper limit ($) :
$27.37
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$25.73
This week:
$23.88
This month :
$20.54
Other Primary facts
Market Cap:
10.56B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
391.03M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.67%
-15.27%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$34.17
$30.98
$20.29
$23.48
Medium risk (<10%) entry points
Buy Call
Sell Call
$29.94
Buy Put:
Sell Put:
$29.26
$24.51
$25.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IPG
Sharpe Ratio:
2.01%
Comparison:
IPG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 6.15% higher than the industry
& is -11.94% lower than the market/S&P 500 average
Average Returns/Yield of
IPG
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.26%
Yearly returns:
23.80%
Comparison of returns:
Average annual returns/yield (last 3 years) is -36.29% below industry average
Classification:
IPG, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.96
Statistical test of Returns:
IPG has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.71%
Weekly Volatility:
6.05%
Monthly Volatility:
12.11%
Yearly Volatility:
41.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.87%
Volatility in last five trading days has been -67.70% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.50%
Weekly VaR:
-12.29%
Monthly VaR:
-24.58%
How Much Can the price of
IPG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-85.14%
This translates to price declining to:
$21.51
This translates to price declining to:
$4.05
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
IPG is a 73.48% riskier investment compared to the market/S&P 500 & is 48.62% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -30.35% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IPG
Beta in relation to market/S&P 500--1.04
Expected beta in 1 year's time:
0.938
Expected beta in 3 year's time:
1.326
Unlevered (debt free) Beta:
0.519
Beta in relation to Nasdaq (XNAS):
0.878
Beta in relation to all global stocks::
0.901
Beta Comparison & Analysis
Beta of competitors/peers::
0.847
Beta is 22.83% higher than peers
Average Industry Beta:
1.076
Beta is -3.25% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.26%
Sustainable growth rate is -210.56% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.049
Alpha is -63.22% below industry average alpha yield
Alpha is 311% higher than market/& is unsustainably high
Analysis of Cost of Capital of
IPG
Equity cost of capital:
0.103
Equity cost of capital is -2.28% below industry mean WACC
Unlevered (without debt) cost of capital:
5.13%
Before-tax cost of debt:
3.42%
After-tax cost of debt:
2.70%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.70%
WACC is -1.49% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$26.99
Revenue growth rate per share of (3Y):
2.99
Annual revenue growth rate is -139.68% below industry average
EPS:
$2.56
Expected Annual growth rate of EPS (3Y):
12.03%
Expected future EPS growth rate is -183.05% lower than the Advertising Agencies industry
Free cash flow (FCF) per share:
$3.76
Balance sheet equity growth per share: 29.34%
Equity growth rate per share is 159.88% higher than the industry
Debt per share
$11.35
EBITDA per share
$4.46
Valuation Analysis Today of
IPG
P/E Ratio:
11
P/E Ratio of Competitors/Peers:
11.57
P/E ratio is -4.97% lower than main peers & is -89.38% lower than the industry
Stock price/value with industry average P/E ratio: $264.99
IPG is -89.72% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $29.42
Present value of the expected future dividends only: $14.13
P/S (Price to Sales ratio):
1.01
Price to sales ratio is -71.30% below the industry mean
P/B (Price to book value ratio):
2.99
Price to free cash flow: 7.25
-
Net income growth rate (3Y):
49.96%
Net income growth rate is -241.10% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.59%
Dividend yeild: 4.11%
Previous Dividend: $0.29
Previous adjusted dividend: $0.29
Previous Dividend: $1.12
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: 2.18%
Expected next dividend payment date: 19/09/2022
Expected next dividend record date: 09/05/2022
-
Previous dividend payment date: 21/06/2022
Previous dividend record date: 06/06/2022
-
Dividend History:
2022-06-03--$0.29
2021-11-30--$0.27
2021-06-04--$0.27
2022-02-28--$0.29
2021-08-31--$0.27
2021-02-26--$0.27
Dividend growth rate is 41.68% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
127.24%
Net debt to equity ratio:
67.81%
Debt to assets ratio:
24.81%
Net debt to assets ratio:
13.22%
Debt-to-asset ratio is -57.83% below industry average
Ability to repay debt:
Interest coverage ratio:
10.7
Interest coverage ratio is 1094.09% more than industry average
Looking forward:
Debt growth rate:
-7.29%
Annual debt growth is -102% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.718
Statistical significance of correlation:
IPG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.498
Stock price is 44.17% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.498
Correlation of price movement with Nasdaq (^IXIC):
0.036
Covariance of price movement with the market:
0.056
Kurtosis
5.551
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.061
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IPG
Gross Profit Margin Ratio:
70%
Operating Profit Margin Ratio:
13.64%
Operating profit margin is -18.84% lower than the industry
Net Profit Margin Ratio:
70%
Effective Tax Rate:
21.06%
Effective tax rate is -55.28% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
29.27%
Return on equity (ROE) is -444.00% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.71%
Return on assets (ROA) is -100.81% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.04
Current ratio is -60.58% below industry average
Cash Conversion Cycle (days):
-205.4
Cash conversion cycle is -242.35% below industry average
The remaining useful life of property plant & equipment is: 13.9 years
Stock based compensation to net income ratio:
1.22%
In-depth Efficiency Analysis
Revenue generated per employee:
189.8K
Each employee generates -47% less revenue than industry average revenue per employee
EBITDA generated per employee:
31.3K
Each employee generates -62% less EBITDA than industry average revenue per employee
Profit generated per employee:
18.4K
Each employee generates -47% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.9K
Each employee generates 21% more free cash flow than industry average revenue per employee
Assets/Capital per employee
154.9K
Each employee generates 21% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
IPG
Shaw Communications Inc. (XNYS:SJR)
LUMEN TECHNOLOGIES, INC. (XNYS:LUMN)
Telefonica Brasil SA (XNYS:VIV)
AMC ENTERTAINMENT HOLDINGS, INC. (XNYS:AMC)
TENCENT MUSIC ENTERTAINMENT GROUP (XNYS:TME)
WPP PLC (XNYS:WPP)
Just Eat Takeaway.com NV (OTCM:JTKWY)
SK TELECOM CO.,LTD (XNYS:SKM)
CABLE ONE, INC. (XNYS:CABO)
Current Analyst Ratings
Strong buy�21%
Buy�21%
Hold�21%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.55B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
8.70B
1.85B
-
-
113.40M
-
282.40M
395.80M
32.60M
162.90M
282.40M
1.74B
1.44B
1.02B
1.32B
277.10M
1.02B
Statement of Cash Flow
Date:
Period:
67.80M
Differed Income Tax :
19.90M
Stock Based Compensation :
12.50M
Change in Working Capital :
- 914100.00K
Accounts Receivables:
1.16B
Other Working Capital:
25.70M
Other Non-Cash Items:
19.40M
Net Cash Provided by Operating Activities:
- 633600.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.40B
-
2.40B
6.34B
-
532.50M
9.27B
2.16B
4.90B
825.30M
-
308.80M
416.10M
8.61B
-
17.88B
7.25B
330.00M
41.60M
760.00M
618.90M
8.95B
4.44B
933.00M
5.37B
-
14.32B
39.70M
3.20B
- 892300.0K
-
March 31, 2022 at 6:00:00 AM
9.10B
3.49B
17.81B
-
4.77B
2.4B
2.60M
- 31400.00K
- 28800.00K
-
-
- 63100.00K
- 118300.00K
- 28700.00K
- 210100.00K
5.00M
- 867500.00K
2.40B
3.27B
- 633600.00K
- 30700.00K
- 664300.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
IPG
2023
2024
2025
2026
2027
$34.39
$36.79
$39.36
$42.12
$45.06