Timing is everything, especially when it comes to investing. Smith AO, a player in the Industrials sector, presents a compelling opportunity for investors looking to make a strategic move. With an enterprise value of $11.4 billion and a robust cash flow from operations of $670.3 million, the company shows strong financial health. However, the upcoming earnings call could bring volatility, making it crucial to consider a timely entry and exit strategy. By capitalizing on current market conditions, investors can potentially benefit from Smith AO's strengths while mitigating risks associated with its negative net interest income of 14.3 million. With many baby boomers showing little interest in the building products sector, it's worth taking a closer look at Smith AO. Why do we remain optimistic about a full recovery for this company? Is its valuation reasonable? Let's explore Smith AO's valuation to provide you with a clearer perspective on whether investing in it makes sense.
We determine the current worth of Smith AO using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Smith AO based exclusively on its
fundamental and basic
technical indicators. By analyzing Smith AO's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of
Smith AO's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Smith AO. We calculate exposure to Smith AO's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to Smith AO's related companies.
Smith AO Investment Alerts
Smith investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Smith AO performance across your portfolios.Please check all
investment alerts for Smith
Smith AO Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Smith value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Smith AO competition to find
correlations between indicators driving the intrinsic value of Smith.
Smith AO Gross Profit
Smith AO Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Smith AO previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Smith AO Gross Profit growth over the last 10 years. Please check Smith AO's
gross profit and other
fundamental indicators for more details.
A Deeper look at Smith
The entity reported the last year's revenue of 3.85
B. Total Income to common stockholders was 556.6
M with profit before taxes, overhead, and interest of 1.33
B.
| 2021 | 2022 | 2023 | 2024 (projected) |
Capital Expenditures | 75.1M | 70.3M | 72.6M | 67.7M | Dividends Paid | 170.1M | 177.2M | 183.5M | 192.7M |
Margins Breakdown
Smith profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Smith AO itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Smith AO profit margins.
| Pretax Profit Margin | 0.2 |
| Operating Profit Margin | 0.21 |
| Net Profit Margin | 0.15 |
| Gross Profit Margin | 0.2 |
Smith AO Price To Sales Ratio is increasing over the last 8 years. The previous year's value of Smith AO Price To Sales Ratio was 3.37. Smith AO Enterprise Value is increasing over the last 8 years. Additionally, Smith AO Ptb Ratio is comparatively stable at the moment.
Smith AO Price To Sales Ratio is increasing over the last 8 years. Smith AO Enterprise Value is increasing over the last 8 years. The previous year's value of Smith AO Enterprise Value was 12,786,268,800. Additionally, Smith AO PTB Ratio is increasing over the last 8 years. Timing can be everything when it comes to investing. Smith AO, a player in the Specialty Industrial Machinery sector, presents an intriguing opportunity with its current valuation. The company boasts a solid current ratio of 1.74, indicating a strong liquidity position, and a manageable total debt of 155.2 million dollars. With a market capitalization of 11.49 billion dollars and a forward PE ratio of 19.19, the stock appears reasonably priced, especially given its steady quarterly revenue growth of 6.6%. However, with the earnings call on the horizon, investors might consider capitalizing on the current momentum and strategically planning an exit to mitigate potential volatility..
Smith AO has 95 percent chance to finish above $77 in November
Although Smith AO's market risk-adjusted performance has slipped to -0.18, many investors are optimistic that the stock will surpass $77 in November, with a 95% chance of this happening. This optimism suggests that despite recent performance concerns, the company's fundamentals or market sentiment remain strong enough to boost confidence in its short-term prospects. Investors are likely anticipating a positive shift, possibly due to upcoming catalysts or solid financial health, which could help the stock overcome its current hurdles. Smith AO shows low volatility, with a skewness of -1.86 and kurtosis of 7.13. Understanding these volatility trends can aid investors in timing their market moves. During bear markets, increased volatility can affect Smith AO's stock price, prompting investors to adjust their portfolios as prices drop.
Our Takeaway on Smith AO Investment
When is the right time to buy or sell Smith AO? Buying stocks such as Smith AO isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
While some private investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Smith AO.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Smith AO. Please refer to our
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