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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

vs
industry
vs
history
Cash to Debt 0.01
ADT's Cash to Debt is ranked lower than
66% of the 273 Companies
in the Global Security & Protection Services industry.

( Industry Median: 0.34 vs. ADT: 0.01 )
ADT' s 10-Year Cash to Debt Range
Min: 0.01   Max: 0.09
Current: 0.01

0.01
0.09
Equity to Asset 0.30
ADT's Equity to Asset is ranked higher than
53% of the 277 Companies
in the Global Security & Protection Services industry.

( Industry Median: 0.43 vs. ADT: 0.30 )
ADT' s 10-Year Equity to Asset Range
Min: 0.3   Max: 0.6
Current: 0.3

0.3
0.6
Z-Score: 0.94
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 4/10

vs
industry
vs
history
Operating margin (%) 19.34
ADT's Operating margin (%) is ranked higher than
88% of the 284 Companies
in the Global Security & Protection Services industry.

( Industry Median: 8.55 vs. ADT: 19.34 )
ADT' s 10-Year Operating margin (%) Range
Min: 19.34   Max: 22.37
Current: 19.34

19.34
22.37
Net-margin (%) 8.92
ADT's Net-margin (%) is ranked higher than
81% of the 284 Companies
in the Global Security & Protection Services industry.

( Industry Median: 4.75 vs. ADT: 8.92 )
ADT' s 10-Year Net-margin (%) Range
Min: 8.92   Max: 12.72
Current: 8.92

8.92
12.72
ROE (%) 8.96
ADT's ROE (%) is ranked higher than
69% of the 280 Companies
in the Global Security & Protection Services industry.

( Industry Median: 9.28 vs. ADT: 8.96 )
ADT' s 10-Year ROE (%) Range
Min: 7.59   Max: 8.88
Current: 8.96

7.59
8.88
ROA (%) 3.00
ADT's ROA (%) is ranked higher than
67% of the 286 Companies
in the Global Security & Protection Services industry.

( Industry Median: 3.22 vs. ADT: 3.00 )
ADT' s 10-Year ROA (%) Range
Min: 2.97   Max: 4.39
Current: 3

2.97
4.39
ROC (Joel Greenblatt) (%) 274.13
ADT's ROC (Joel Greenblatt) (%) is ranked higher than
98% of the 284 Companies
in the Global Security & Protection Services industry.

( Industry Median: 12.38 vs. ADT: 274.13 )
ADT' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 263.6   Max: 665.44
Current: 274.13

263.6
665.44
» ADT's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q4 2013

ADT Guru Trades in Q4 2013

Wallace Weitz 375,000 sh (New)
Paul Tudor Jones 15,400 sh (+165.52%)
Larry Robbins 5,090,297 sh (+151.44%)
Dodge & Cox 28,008,568 sh (+7.25%)
Mario Gabelli 1,068,167 sh (+4.19%)
John Keeley 273,492 sh (+4.14%)
Jean-Marie Eveillard 750 sh (unchged)
Louis Moore Bacon 250,000 sh (unchged)
George Soros Sold Out
Steven Cohen 21,974 sh (-80.98%)
» More
Q1 2014

ADT Guru Trades in Q1 2014

Robert Olstein 234,000 sh (New)
Joel Greenblatt 44,344 sh (New)
Leon Cooperman 2,687,244 sh (New)
Kyle Bass 62,500 sh (New)
Wallace Weitz 2,912,214 sh (+676.59%)
Paul Tudor Jones 19,300 sh (+25.32%)
Larry Robbins 5,426,697 sh (+6.61%)
Dodge & Cox 28,133,204 sh (+0.44%)
Louis Moore Bacon 368,400 sh (unchged)
Jean-Marie Eveillard 750 sh (unchged)
Steven Cohen Sold Out
John Keeley Sold Out
Mario Gabelli 989,589 sh (-7.36%)
» More
Q2 2014

ADT Guru Trades in Q2 2014

Louis Moore Bacon 12,419 sh (New)
Mario Gabelli 1,085,663 sh (+9.71%)
Robert Olstein 234,000 sh (unchged)
Steven Cohen 71,800 sh (unchged)
Jean-Marie Eveillard 750 sh (unchged)
Leon Cooperman Sold Out
Paul Tudor Jones Sold Out
Kyle Bass Sold Out
Dodge & Cox 27,976,177 sh (-0.56%)
Wallace Weitz 1,961,767 sh (-32.64%)
Joel Greenblatt 25,691 sh (-42.06%)
Larry Robbins 2,129,297 sh (-60.76%)
» More
Q3 2014

ADT Guru Trades in Q3 2014

Ray Dalio 16,900 sh (New)
Jim Simons 38,900 sh (New)
Jean-Marie Eveillard 750 sh (unchged)
Steven Cohen Sold Out
Louis Moore Bacon Sold Out
Larry Robbins Sold Out
Dodge & Cox 27,853,069 sh (-0.44%)
Robert Olstein 223,200 sh (-4.62%)
Mario Gabelli 968,293 sh (-10.81%)
Wallace Weitz 1,722,865 sh (-12.18%)
Joel Greenblatt 17,494 sh (-31.91%)
» More
» Details

Insider Trades

Latest Guru Trades with ADT

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Wallace Weitz 2014-09-30 Reduce -12.18%0.26%$33 - $37.36 $ 32.06-10%1722865
Joel Greenblatt 2014-09-30 Reduce -31.91%$33 - $37.36 $ 32.06-10%17494
Ray Dalio 2014-09-30 New Buy$33 - $37.36 $ 32.06-10%16900
Leon Cooperman 2014-06-30 Sold Out 1.1%$29.08 - $34.81 $ 32.060%0
Wallace Weitz 2014-06-30 Reduce -32.64%0.91%$29.08 - $34.81 $ 32.060%1961767
Joel Greenblatt 2014-06-30 Reduce -42.06%0.01%$29.08 - $34.81 $ 32.060%25691
Wallace Weitz 2014-03-31 Add 676.59%2.44%$28.08 - $40.58 $ 32.06-4%2912214
Leon Cooperman 2014-03-31 New Buy1.1%$28.08 - $40.58 $ 32.06-4%2687244
Robert Olstein 2014-03-31 New Buy0.96%$28.08 - $40.58 $ 32.06-4%234000
John Keeley 2014-03-31 Sold Out 0.19%$28.08 - $40.58 $ 32.06-4%0
Joel Greenblatt 2014-03-31 New Buy0.02%$28.08 - $40.58 $ 32.06-4%44344
Wallace Weitz 2013-12-31 New Buy0.51%$38.8 - $44.01 $ 32.06-22%375000
George Soros 2013-12-31 Sold Out 0.26%$38.8 - $44.01 $ 32.06-22%0
Premium More recent guru trades are included for Premium Members only!!
Premium More recent guru trades are included for USA Subscribe Members only!!
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Guru Investment Theses on The ADT Corp

Weitz Investment Management Comments on ADT Corporation - May 06, 2014

Finally, ADT Corporation's stock declined as we built our initial position over the past few months. Portfolio activity was moderate during the quarter. We bought shares of ADT, the leading provider of monitored home security service in North America. ADT's stock declined after the company reported gross customer additions that were below expectations. The quarterly results exacerbated fears about ADT's competitive position against new cable and telecom entrants. While competitive pressures have increased, we note that the company has taken steps to dampen sales of less profitable accounts. In our view, the company is wisely trading short-term sales results for more durable future profits. Results may be choppy during 2014, but we are more optimistic about 2015 and beyond.

From Wallace Weitz (Trades, Portfolio)'s first quarter 2014 report.

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Weitz Funds' Analyst Corner - A Perspective on the ADT Corporation - Feb 03, 2014

By Drew Weitz



The ADT Corporation (ADT) is the leading provider of monitored home security service in the United States and Canada. The company possesses the strongest brand in the security industry, evidenced by its 6.5 million residential and small business customers – more than five times the number of its next largest competitor. In addition to traditional alarm monitoring, ADT is expanding its offerings to include interactive services (e.g. remote arm/disarm) and home automation services (e.g. climate/lighting control, physical lock/unlock of doors) for an incremental fee. The company was spun-off from Tyco International (TYC) in September 2012.



The Attraction of Subscription Businesses



As investors, we are qualitatively drawn to businesses that are leaders in their industries and possess strong competitive advantages. Quantitatively, we also look for companies that consistently generate strong, predictable and growing streams of cash beyond what is needed to reinvest in the business. Subscription models, characterized by customers (often under contract) that pay on regular intervals, often provide such predictability. Our investments in pay TV companies are examples of the marriage of these two traits. We believe that ADT, too, fits this bill. As described above, it is the undisputed heavyweight of the industry with the most trusted brand and scale that drives lower costs than competitors. New customers sign an initial three-year contract and pay monthly for service, creating a business with roughly 90% recurring revenue and highly visible cash flows. Thanks to their large subscriber base, the cash generated is more than sufficient to purchase equipment for new installations and compensate third-party authoriz ed dealers for accounts generated. Lastly, these predictable cash flows support ADT's ability to prudently issue debt. Excess cash and debt capital allow management plenty of flexibility to play offense.



Customers are Taking ADT's Pulse



For years, industry growth has been slow and steady, if somewhat unexciting. Thanks to the proliferation of Internet- connected consumer devices, however, the company is enjoying a renaissance. ADT's interactive and home automation service, dubbed Pulse, allows customers to remotely control lighting, adjust thermostats, monitor security cameras, or lock and unlock their doors in addition to simply arming or disarming a security system. Consumer response to the product has been strong: although only 8% of ADT subscribers have Pulse today, nearly one-third of new sales include the additional functionality (and higher price tag). Furthermore, the company estimates that roughly 20% of the installed base has interest in upgrading to automation services. Pulse's 25% higher monthly fee and positive impact on retention more than offset the increased equipment and installation costs. Adoption by new customers and upgrades by existing subscribers will drive the mix of Pulse accounts higher over time, providing a multi-year earnings benefit to ADT.



Attractive Opportunities Attract Competition



No strangers to the benefits of subscription businesses themselves, pay TV and telecom companies have entered the market, looking to bundle home security and automation services with their video, broadband and telephony offerings. Their entrance is coincident with a period of elevated account attrition for the company, raising warning signs for investors and sending ADT's shares lower. New competitors, however, do not appear to be the culprit for ADT's higher attrition. Indeed, results for the last 12 months indicate that ADT has gained market share, while the modest gains made by pay TV and telecom companies have been at the expense of small, subscale firms. Instead, higher turnover in the housing market has led to greater account termination as subscribers change residences. ADT hopes to turn this challenge into an opportunity to both follow the old subscriber to their new address and sell service to the new occupant of the former premises. Furthermore, the company has taken steps to improve the long-term value of new subscribers, including tightening credit standards and optimizing its third-party dealer network by eliminating those not committed to following ADT's Pulse strategy. In the short run, these actions have a negative impact on attrition by reducing the number of new customers available to offset losses. However, we believe this will be more than offset by a greater lifetime value of the prospective subscriber base.



What Matters Most is Value per Share



Investors initially cheered ADT's separation from Tyco, bidding its shares up from the high $30s to over $50 in short order. However, as attrition rose and new customer growth fell below expectations, shareholders sold just as quickly. Despite these disappointments, in its first 16 months as a public company, ADT will have used its excess cash flow and balance sheet capacity to buy in nearly 20% of its own equity at reasonable prices, thereby driving a substantial increase in business value per share . Going forward, the pace of capital returns will likely diminish as management looks to prioritize investment in the growth of its business. Indeed, the specter of cable and telecom competition combined with the need to invest in new home automation services may drive a wave of consolidation of smaller players that lack the scale to keep up. At the right prices, we would expect (and encourage) ADT to participate, driving additional business value growth.



With the stock back in the high $30s, the recent growth in ADT's business value per share makes today's valuation a more attractive buying opportunity than a year ago. Compared with our current estimation of ADT's business value in the low $50s, we believe the company's shares represented an attractive investment for our shareholders



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Investment Guru John Keeley Comments on ADT Corp - Mar 26, 2013

During the fourth quarter, ADT Corporation (ADT) proved to be the top performing position in the fund. Shares of the producer of electronics security debuted strongly after being spun-off from Tyco last year. The company climbed over 29 percent and added 56 basis points during the quarter. Although we believe the company can do well regardless of the housing environment, the stock was clearly boosted by improvement and continued momentum in the housing market.

From Keeley Funds' fourth quarter 2012 investor letter.

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Top Ranked Articles about The ADT Corp

The Olstein All Cap Value Fund’s 2014 First Quarter Letter to Shareholders
Dear Fellow Shareholders: Read more...
Weitz Investment Management Comments on ADT Corporation
Finally, ADT Corporation's stock declined as we built our initial position over the past few months. Portfolio activity was moderate during the quarter. We bought shares of ADT, the leading provider of monitored home security service in North America. ADT's stock declined after the company reported gross customer additions that were below expectations. The quarterly results exacerbated fears about ADT's competitive position against new cable and telecom entrants. While competitive pressures have increased, we note that the company has taken steps to dampen sales of less profitable accounts. In our view, the company is wisely trading short-term sales results for more durable future profits. Results may be choppy during 2014, but we are more optimistic about 2015 and beyond. Read more...
Weitz Funds' Analyst Corner - A Perspective on the ADT Corporation
By Drew Weitz Read more...
Top-Returning Manager Larry Robbins' Stocks at 52-Week Lows
The market may have soared, but the average hedge fund returned only 7.4% in 2013. Meanwhile, Larry Robbins (Trades, Portfolio)’ Glenview Capital did multiple laps around them, with his $1.8 billion Glenview Capital Opportunity Fund return more than 100% over the year, to become the top-performing hedge fund.   Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 19.00
ADT's P/E(ttm) is ranked higher than
71% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 21.80 vs. ADT: 19.00 )
ADT' s 10-Year P/E(ttm) Range
Min: 16.41   Max: 28.43
Current: 19

16.41
28.43
P/B 1.76
ADT's P/B is ranked higher than
70% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.92 vs. ADT: 1.76 )
ADT' s 10-Year P/B Range
Min: 1.59   Max: 2.36
Current: 1.76

1.59
2.36
P/S 1.70
ADT's P/S is ranked higher than
62% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.33 vs. ADT: 1.70 )
ADT' s 10-Year P/S Range
Min: 1.64   Max: 3.55
Current: 1.7

1.64
3.55
PFCF 7.42
ADT's PFCF is ranked higher than
95% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 9999.00 vs. ADT: 7.42 )
ADT' s 10-Year PFCF Range
Min: 6.38   Max: 13.18
Current: 7.42

6.38
13.18
EV-to-EBIT 16.01
ADT's EV-to-EBIT is ranked higher than
74% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 18.94 vs. ADT: 16.01 )
ADT' s 10-Year EV-to-EBIT Range
Min: 13.5   Max: 19.6
Current: 16.01

13.5
19.6
Current Ratio 0.58
ADT's Current Ratio is ranked lower than
61% of the 279 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.59 vs. ADT: 0.58 )
ADT' s 10-Year Current Ratio Range
Min: 0.46   Max: 0.77
Current: 0.58

0.46
0.77
Quick Ratio 0.47
ADT's Quick Ratio is ranked lower than
61% of the 279 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.33 vs. ADT: 0.47 )
ADT' s 10-Year Quick Ratio Range
Min: 0.41   Max: 0.7
Current: 0.47

0.41
0.7

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 2.50
ADT's Dividend Yield is ranked higher than
65% of the 185 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.95 vs. ADT: 2.50 )
ADT' s 10-Year Dividend Yield Range
Min: 0.26   Max: 2.38
Current: 2.5

0.26
2.38
Dividend Payout 0.44
ADT's Dividend Payout is ranked higher than
74% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 2.59 vs. ADT: 0.44 )
ADT' s 10-Year Dividend Payout Range
Min: 0.27   Max: 0.44
Current: 0.44

0.27
0.44
Yield on cost (5-Year) 2.50
ADT's Yield on cost (5-Year) is ranked higher than
50% of the 186 Companies
in the Global Security & Protection Services industry.

( Industry Median: 2.63 vs. ADT: 2.50 )
ADT' s 10-Year Yield on cost (5-Year) Range
Min: 0.26   Max: 2.26
Current: 2.5

0.26
2.26

Valuation & Return

vs
industry
vs
history
Price/Median PS Value 0.63
ADT's Price/Median PS Value is ranked higher than
95% of the 310 Companies
in the Global Security & Protection Services industry.

( Industry Median: 1.25 vs. ADT: 0.63 )
ADT' s 10-Year Price/Median PS Value Range
Min: 0.71   Max: 1.02
Current: 0.63

0.71
1.02
Earnings Yield (Greenblatt) 6.20
ADT's Earnings Yield (Greenblatt) is ranked higher than
72% of the 285 Companies
in the Global Security & Protection Services industry.

( Industry Median: 5.70 vs. ADT: 6.20 )
ADT' s 10-Year Earnings Yield (Greenblatt) Range
Min: 5.1   Max: 7.4
Current: 6.2

5.1
7.4

Analyst Estimate

Sep15 Sep16
Revenue(Mil) 3,584 3,668
EPS($) 2.09 2.08
EPS without NRI($) 2.09 2.08

Business Description

Industry: Consulting & Outsourcing » Security & Protection Services
Compare: » details
Traded in other countries:ADT.Germany,
ADT Corp is a provider of electronic security, interactive home and business automation, and monitoring services for residences and small businesses in the United States and Canada. The Company's products and services include home and business solutions, and home health services. The Company's brands are ADT, ADT Pulse, and Companion Service. The Company's electronic security and home/business automation offerings involve the installation and monitoring of residential and small business security and premises automation systems designed to detect intrusion, control access and react to movement, smoke, carbon monoxide, flooding, temperature, and other environmental conditions and hazards.
» More Articles for ADT

Headlines

Articles On GuruFocus.com
You Should Feel Protected With This Stock in Your Portfolio Aug 29 2014 
The Olstein All Cap Value Fund’s 2014 First Quarter Letter to Shareholders Jul 22 2014 
Security Companies Can Secure Your Money Jun 30 2014 
Honeywell: A Diversified Play on the Rise of the Smart Home. Jun 15 2014 
Weitz Investment Management Comments on ADT Corporation May 06 2014 
Investors Should Not Fear, Protect Your Portfolio with ADT Mar 24 2014 
5-year lows: Staples Inc, Sprouts Farmers Market Inc, The ADT Corporation, and Peabody Energy Corpor Mar 10 2014 
ADT - Does a Lower Stock Price Mean It's Safe to Invest? Feb 05 2014 
Weitz Funds' Analyst Corner - A Perspective on the ADT Corporation Feb 03 2014 
Top Performing Manager of 2013 Larry Robbins' Stocks at 52-Week Lows Jan 28 2014 

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