2013-11-08

I don’t have a strong sense on the valuation of Twitter Inc (NYSE:TWTR), but I want to share with you forty companies with valuations similar to that of Twitter Inc (NYSE:TWTR) as of the close on November 7th.

Company

Ticker

Industry

Market cap

P/B

P/S

PE ttm

P/EE1

P/EE2

EE growth

yield

Adobe Systems Incorporated

ADBE

1036 – Software & Programming

   27,529.77

     4.03

     6.61

     62.10

     34.50

    24.50

         11.67

       -

Alexion Pharmaceuticals, Inc.

ALXN

0809 – Major Drugs

   24,136.47

   10.25

   16.88

     69.70

     36.00

    29.00

         24.58

       -

Allergan, Inc.

AGN

0803 – Biotechnology & Drugs

   26,830.29

     4.41

     4.41

     21.40

     16.70

    15.50

         13.14

   0.20

Allstate Corporation, The

ALL

0715 – Insurance (Property & Casualty)

   24,567.41

     1.22

     0.72

     13.80

     10.30

       9.50

           9.34

   1.90

Archer Daniels Midland Company

ADM

0515 – Food Processing

   27,157.60

     1.39

     0.30

     18.30

     12.60

    12.50

         10.00

   1.90

Baker Hughes Incorporated

BHI

0612 – Oil Well Services & Equipment

   25,880.76

     1.44

     1.18

     24.10

     13.80

    11.10

         18.75

   1.00

BB&T Corporation

BBT

0727 – Regional Banks

   23,863.10

     1.23

     3.58

     15.80

     11.20

    10.20

           5.98

   2.70

Carnival Corporation

CCL

0936 – Recreational Activities

   27,001.00

     1.11

     1.76

     24.50

     21.90

    15.80

         12.25

   2.90

Charles Schwab Corp

SCHW

0718 – Investment Services

   29,963.52

     3.39

     5.75

     33.00

     25.70

    21.00

         18.95

   1.00

CME Group Inc

CME

0718 – Investment Services

   24,825.87

     1.14

     8.62

     26.70

     20.40

    18.10

         13.17

   2.40

Cognizant Technology Solutions

CTSH

1036 – Software & Programming

   26,408.19

     4.96

     3.29

     23.30

     18.70

    15.90

         18.30

       -

Corning Incorporated

GLW

1024 – Electronic Instruments & Controls

   24,907.02

     1.15

     3.11

     13.80

     12.20

    10.90

         17.60

   2.30

Crown Castle International Cor

CCI

0939 – Rental & Leasing

   21,830.17

     7.32

     7.53

   234.90

     92.00

    56.70

         38.77

       -

CSX Corporation

CSX

1112 – Railroads

   26,726.76

     2.71

     2.24

     14.10

     13.40

    12.00

         11.43

   2.30

Cummins Inc.

CMI

0218 – Misc. Capital Goods

   23,966.10

     3.38

     1.41

     17.10

     13.80

    11.50

         10.00

   1.90

Devon Energy Corp

DVN

0609 – Oil & Gas Operations

   25,591.32

     1.28

     2.69

   (14.80)

     11.50

    11.00

           8.40

   1.40

Discover Financial Services

DFS

0703 – Consumer Financial Services

   25,064.00

     2.36

     3.33

     10.20

     10.30

       9.80

           8.14

   1.50

Estee Lauder Companies Inc

EL

0521 – Personal & Household Products

   27,129.73

     8.26

     2.66

     27.10

     21.50

    19.10

         12.97

   1.10

Exelon Corporation

EXC

1203 – Electric Utilities

   24,541.52

     1.15

     0.98

     21.20

     12.70

    12.80

         (5.23)

   4.30

Hess Corp.

HES

0609 – Oil & Gas Operations

   27,839.92

     1.16

     1.01

       7.90

     14.00

    14.10

           5.80

   1.20

LinkedIn Corp

LNKD

1018 – Computer Services

   25,055.41

     9.90

   18.09

   733.00

   100.00

    66.00

         54.06

       -

Marathon Oil Corporation

MRO

0606 – Oil & Gas – Integrated

   25,041.70

     1.32

     1.53

     15.90

     11.20

    12.70

         10.00

   2.20

Marsh & McLennan Companies, In

MMC

0712 – Insurance (Miscellaneous)

   25,307.43

     3.73

     2.10

     19.70

     16.90

    15.10

         11.42

   2.20

Noble Energy, Inc.

NBL

0609 – Oil & Gas Operations

   26,993.21

     3.04

     6.05

     26.30

     17.80

    16.70

         15.90

   0.70

Norfolk Southern Corp.

NSC

1112 – Railroads

   27,004.80

     2.62

     2.44

     15.30

     13.70

    12.20

         12.55

   2.40

Northrop Grumman Corporation

NOC

0203 – Aerospace and Defense

   24,672.98

     2.64

     0.99

     12.90

     13.00

    11.90

           2.83

   2.30

Pioneer Natural Resources

PXD

0606 – Oil & Gas – Integrated

   28,235.38

     3.78

     8.22

   241.50

     34.60

    28.50

         16.48

       -

PPG Industries, Inc.

PPG

0103 – Chemical Manufacturing

   26,169.80

     5.19

     1.74

     26.80

     19.30

    17.10

           9.25

   1.30

Public Storage

PSA

0933 – Real Estate Operations

   29,002.91

     5.61

   15.37

     37.80

     33.10

    30.90

           6.93

   3.30

Raytheon Company

RTN

0203 – Aerospace and Defense

   27,009.38

     3.06

     1.11

     14.20

     13.50

    12.00

           8.70

   2.60

Regeneron Pharmaceuticals Inc

REGN

0803 – Biotechnology & Drugs

   27,921.68

   18.70

   16.05

     38.20

     51.50

    35.90

         29.70

       -

Reynolds American, Inc.

RAI

0524 – Tobacco

   28,065.60

     5.53

     3.39

     18.10

     14.90

    13.70

           7.70

   4.90

Southern Copper Corp

SCCO

0124 – Metal Mining

   23,964.20

     4.61

     3.84

     14.80

     14.30

    12.70

         11.50

   2.40

Spectra Energy Corp.

SE

1206 – Natural Gas Utilities

   23,682.60

     2.71

     4.53

     25.30

     21.30

    20.70

           5.45

   3.40

Sprint Corp

S

0915 – Communications Services

   26,981.29

     1.02

     1.02

    (6.25)

   (16.96)

  (94.11)

       (32.11)

       -

Stryker Corporation

SYK

0812 – Medical Equipment & Supplies

   28,005.55

     3.20

     3.15

     31.80

     16.00

    14.70

           8.16

   1.40

VF Corp

VFC

0403 – Apparel/Accessories

   23,606.95

     4.19

     2.11

     20.50

     17.50

    15.40

         11.14

   1.90

WellPoint, Inc.

WLP

0706 – Insurance (Accident & Health)

   25,386.06

     1.02

     0.37

       9.30

     10.20

       9.50

           8.21

   1.80

Whole Foods Market, Inc.

WFM

0957 – Retail (Grocery)

   23,509.62

     6.21

     1.83

     43.70

     36.60

    30.30

         18.71

   0.60

Williams Companies, Inc.

WMB

0609 – Oil & Gas Operations

   24,256.36

     5.17

     3.37

     38.20

     29.20

    23.40

         10.80

   4.10

Grand Average

   25,890.84

     2.29

     1.76

     25.03

     17.98

    15.79

         12.17

   1.68

Twitter’s valuation was around $25.9 Billion at the close of regular trading on 11/7.  The private equity sponsors must be jumping for joy, as they got more than they expected on the IPO, and even more, if the price of Twitter Inc (NYSE:TWTR" target="_blank">NYSE:TWTR) holds up past the time of their lockup, when they can sell their remaining shares.



Twitter has no profits, and trades at 10 times book value, versus 2.3x on their competitors here.  Price-to-Sales is around 50, versus 1.8 for competitors here.

There is one thing certain here, there is a lot of profits growth expected out of Twitter.  It has to go from negative profits to positive, and then soar thereafter.  That would justify the valuation.

But how likely is that?  There are few companies that ever do that.  So be wary and avoid Twitter Inc (NYSE:TWTR" target="_blank">NYSE:TWTR) stock, realizing there is a small chance that it might be worth its present valuation, much less more.

Full disclosure: no position in Twitter Inc (NYSE:TWTR" target="_blank">NYSE:TWTR) or any companies mentioned here.

By David Merkel, CFA of Aleph Blog

The post Twitter Inc (TWTR): 40 Companies With A Similar Market Cap appeared first on ValueWalk.

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