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A Quickie With Fastenal Company

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Fastenal is a wholesale distributor of industrial and construction supplies primarily in North America. Listed competitors include WW Grainger, HD Supply Holdings, and MSC Industrial Direct Company.

Short-Term Target
My current short-term target for the stock is $37.69, with an initial trailing stop set at $29.91. Based on a recent price of $30.37, upward price movement will find resistance at $30.88 and again at $32.03, with final resistance found at $32.84. Downward price movement will find support at $29.43 and again at $27.17, with final support found at $25.42.

Volatility
There are many different metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. A beta ratio of less than 1 means that the security’s price will be less volatile than the market, while a beta ratio greater than 1 indicates that the security’s price will be more volatile than the market. The beta ratio for this stock is 1.15.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Enterprise Versus Equity Ratio
As a fair value investor, I am looking for companies that have low debt and generate lots of cash. To me, the easist way to highlight a company’s ability to generate cash is to compare the Enterprise Value to the Equity Value, what I call the E2E Ratio. What I am looking for with this ratio is something close to or above 1, meaning the company generates cash at rate equal to or faster than it generates debt. For this company my enterprise value (market cap plus debt less cash) is $32 and my equity value (market cap plus cash less debt) is $29, making my E2E Ratio, 0.9.

Momentum Target
My momentum target for the stock is $51. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $39. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 210.48 shares of stock with a cost basis of $47.51 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $26.15 per share. During that holding period you would have collected $259.97 in dividends, and your initial $10K investment would have returned to you $5,504, a loss of 45% excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 51 insider trades involving 575,458 shares of stock. Of those 51 insider trades, 23 were Buys involving 280,098 shares of stock, and 28 were Sells involving 295,360 shares of stock, creating an insider buy to sell ratio of roughly 1 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $41. The stock price during that time period averaged $48, earnings averaged $1.74 per share, and the average PE Ratio was 28. The current PE Ratio is 10.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.03%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $50. My target prices are derivatives of my fair value estimate.

Fastenal Company (Nasdaq: FAST) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $30 initiate target, but below my most recent $62 reduce target. Please see linked PDF worksheet.

There you are, short and to the point.

Wax
Posted on 07/20/19

A Quickie With Ingredion Incorporated

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Ingredion is principally engaged in the production and sale of starches and sweeteners for a wide range of industries, turning corn, tapioca, potatoes, grains, fruits, and vegetables into value-added ingredients and biomaterials for the food, beverage, paper and corrugating, brewing and other industries. Industry peers include Archer-Daniels-Midland Company, Cargill, Incorporated, and Tate & Lyle Ingredients Americas LLC.

Short-Term Target
My current short-term target for the stock is $93, with an initial trailing stop set at $80.56. Based on a recent price of $81.79, upward price movement will find resistance at $84.41 and again at $90.34, with final resistance found at $93.45. Downward price movement will find support at $79.12 and again at $78.43, with final support found at $75.91.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. A beta ratio of less than 1 means that the security’s price will be less volatile than the market, while a beta ratio greater than 1 indicates that the security’s price will be more volatile than the market. The beta ratio for this stock is 0.90.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 1% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $130. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $84. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 146.07 shares of stock with a cost basis of $68.46 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $91.40 per share. During that holding period you would have collected $307.04 in dividends, and your initial $10K investment would have returned to you $13,351 a gain of 34%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 74 insider trades involving 160,066 shares of stock. Of those 74 insider trades, 58 were Buys involving 103,330 shares of stock, and 16 were Sells involving 56,736 shares of stock, creating an insider buy to sell ratio of roughly 2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $67. The stock price during that time period averaged $103, earnings averaged $6.12 per share, and the average PE Ratio was 17. The current PE Ratio is 12.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.34%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $110. My target prices are derivatives of my fair value estimate.

Ingredion Incorporated (NYSE: INGR) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $66 initiate target, but below my most recent $137 reduce target. Please see linked PDF worksheet.

There you are, short and to the point.

Wax
Posted on 07/19/19

A Quickie With Lydall, Inc.

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Lydall designs and manufactures specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers, medical filtration media and devices and biopharmaceutical processing components for thermal/acoustical, filtration/separation and bio/medical applications. The company also designs and manufactures non-woven felt filtration media and filter bags used primarily in industrial air filtration applications including power, cement, asphalt, incineration, food and pharmaceutical. Listed competitors include Johns Manville Corporation, Morgan Advanced Materials, and Danaher Corporation.

Short-Term Target
My current short-term target for the stock is $23.42, with an initial trailing stop set at $18.79. Based on a recent price of $19.08, upward price movement will find resistance at $19.70 and again at $20.48, with final resistance found at $22.30. Downward price movement will find support at $18.54 and again at $18.13.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.56, meaning this stock, will move 56% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 1% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $32. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $12. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 567.54 shares of stock with a cost basis of $17.62 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $20.31 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $11,527 a gain of 15%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 43 insider trades involving 149,305 shares of stock. Of those 43 insider trades, 36 were Buys involving 140,276 shares of stock, and 7 were Sells involving 9,029 shares of stock, creating an insider buy to sell ratio of roughly 16 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $45. The stock price during that time period averaged $40, earnings averaged $1.79 per share, and the average PE Ratio was 22. The current PE Ratio is 10.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 7.32%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $41 and my target prices are derivatives of my fair value estimate.

Lear Corporation (NYSE: LEA) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $152 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/16/19

A Quickie With Lear Corporation

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Lear Corporation supplies seating and electrical distribution systems and related components to automotive manufacturers. The company emerged from Chapter 11 bankruptcy proceedings in 2009. Listed competitors include Johnson and Johnson, Bostik SA, and Faurecia.

Short-Term Target
My current short-term target for the stock is $147.58, with an initial trailing stop set at $127.79. Based on a recent price of $129.74, upward price movement will find resistance at $132.16 and again at $135.50, with final resistance found at $142.25. Downward price movement will find support at $126.29 and again at $121.36, with final support found at $118.83.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.36, meaning this stock, will move 36% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $346. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $128. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 127.89 shares of stock with a cost basis of $78.19 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $122.86 per share. During that holding period you would have collected $210 in dividends, and your initial $10K investment would have returned to you $15,713 a gain of 57%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 36 insider trades involving 238,447 shares of stock. Of those 36 insider trades, 17 were Buys involving 150,097 shares of stock, and 19 were Sells involving 88,350 shares of stock, creating an insider buy to sell ratio of roughly 1.7 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $94. The stock price during that time period averaged $120, earnings averaged $12.25 per share, and the average PE Ratio was 10. The current PE Ratio is 6.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.72%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $253 and my target prices are derivatives of my fair value estimate.

Lear Corporation (NYSE: LEA) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $152 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/16/19

A Quickie With Gentex Corporation

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Gentex Corporation designs and manufactures automatic-dimming rearview mirrors and electronics for the automotive industry, dimmable aircraft windows for the aviation industry, and commercial smoke alarms and signaling devices for the fire protection industry. Industry peers include Magna Mirrors of America, Ichikon Industries, and Ficosa International.

Short-Term Target
My current short-term target for the stock is $24.23, with an initial trailing stop set at $23.35. Based on a recent price of $23.71, upward price movement will find resistance at $23.93 and again at $24.66, with final resistance found at $24.97. Downward price movement will find support at $23.29 and again at $22.89, with final support found at $22.05.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.17, meaning this stock, will move 17% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 3% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $29. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $25. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 325.31 shares of stock with a cost basis of $30.74 per share. With a stock split in January 2015, your shares would have increased to 650.62 and your adjusted cost basis would have been $15.37 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $20.21 per share. During that holding period you would have collected $249.79 in dividends, and your initial $10K investment would have returned to you $13,149 a gain of 32%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 52 insider trades involving 222,636 shares of stock. Of those 52 insider trades, 39 were Buys involving 134,318 shares of stock, and 13 were Sells involving 88,318 shares of stock, creating an insider buy to sell ratio of roughly 1.5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $34. The stock price during that time period averaged $17, earnings averaged $1.21 per share, and the average PE Ratio was 15. The current PE Ratio is 12.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.15%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $36 and my target prices are derivatives of my fair value estimate.

Gentex Corporation (Nasdaq: GNTX) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $21 initiate target, but below my most recent $45 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/16/19

A Quickie With Douglas Dynamics

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Douglas Dynamics designs, manufacturers, and sells snow and ice control equipment for light trucks, which consists of snowplows, sand and salt spreaders, and related parts and accessories. Products are sold under the WESTERN®, FISHER® and BLIZZARD® brands. Industry peers include Johnson Controls, ZFTRW Automotive Holdings, and Dana Holding Corporation.

Short-Term Target
My current short-term target for the stock is $41.07, with an initial trailing stop set at $39.52. Based on a recent price of $40.12, upward price movement will find resistance at $40.23 and again at $41.60, with final resistance found at $42.34. Downward price movement will find support at $38.44 and again at $37.20, with final support found at $36.36.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 0.78, meaning this stock, will move (22)% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $42. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $38. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 594.53 shares of stock with a cost basis of $16.82 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $35.89 per share. During that holding period you would have collected $567.67 in dividends, and your initial $10K investment would have returned to you $21,338 a gain of 113%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 25 insider trades involving 101,132 shares of stock. Of those 25 insider trades, 13 were Buys involving 36,319 shares of stock, and 12 were Sells involving 64,813 shares of stock, creating an insider buy to sell ratio of roughly 0.6 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $28. The stock price during that time period averaged $26, earnings averaged $1.99 per share, and the average PE Ratio was 13. The current PE Ratio is 15.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 4.98%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $47 and my target prices are derivatives of my fair value estimate.

Douglas Dynamics, Inc. (NYSE: PLOW) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $28 initiate target, but below my most recent $59 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/15/19

A Quickie With Dorman Products

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Dorman Products is a supplier of replacement parts and fasteners for passenger cars, light trucks, and heavy duty trucks in the automotive aftermarket many of which the company designs and engineers. The company is also a supplier of original equipment items which are available to consumers only from original equipment manufacturers. Industry peers include Federal-Mogul Holdings Corporation, Genuine Parts Company, and General Parts International.

Short-Term Target
My current short-term target for the stock is $91.20, with an initial trailing stop set at $80.61. Based on a recent price of $81.84, upward price movement will find resistance at $83.37 and again at $86.49, with final resistance found at $89.69. Downward price movement will find support at $81.67 and again at $80.90, with final support found at $80.50.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 0.83, meaning this stock, will move (17)% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $76. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $87. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 178.44 shares of stock with a cost basis of $56.04 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $90.02 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $16,064 a gain of 61%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 55 insider trades involving 207,844 shares of stock. Of those 55 insider trades, 24 were Buys involving 84,329 shares of stock, and 31 were Sells involving 123,515 shares of stock, creating an insider buy to sell ratio of roughly 0.7 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $55. The stock price during that time period averaged $57, earnings averaged $279 per share, and the average PE Ratio was 21. The current PE Ratio is 22.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.13%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $74 and my target prices are derivatives of my fair value estimate.

Dorman Products, Inc. (Nasdaq: DORM) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $44 initiate target, but below my most recent $92 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/14/19

A Quickie With BorgWarner

My Disclaimer
I am not a licensed or registered investment professional, and I hold no shares of this company.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various company valuations, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
BorgWarner is a supplier of highly engineered automotive systems and components primarily for powertrain applications. Products are sold primarily to original equipment manufacturers (“OEMs”) and to the aftermarket. Listed competitors include Robert Bosch Gesellschaft mit beschränkter Haftung, Magna Powertrain USA, and Honeywell International.

Short-Term Target
My current short-term target for the stock is $42.41, with an initial trailing stop set at $39.37. Based on a recent price of $39.97, upward price movement will find resistance at $41.08 and again at $42.28, with final resistance found at $43.92. Downward price movement will find support at $38.82 and again at $36.49, with final support found at $35.07.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.61, meaning this stock, will move 61% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $97. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $98. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 186.43 shares of stock with a cost basis of $53.64 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $34.74 per share. During that holding period you would have collected $105.94 in dividends, and your initial $10K investment would have returned to you $6,477 a loss of 35%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 63 insider trades involving 349,208 shares of stock. Of those 63 insider trades, 29 were Buys involving 250,555 shares of stock, and 34 were Sells involving 98,649 shares of stock, creating an insider buy to sell ratio of roughly 2.5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $46. The stock price during that time period averaged $48, earnings averaged $2.45 per share, and the average PE Ratio was 20. The current PE Ratio is 8.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 7.47%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $69 and my target prices are derivatives of my fair value estimate.

BorgWarner, Inc. (NYSE: BWA) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $41 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/13/19

A Quickie With Gentherm Incorporated

My Disclaimer
I hold no shares of this company and I am not a licensed or registered investment professional.

Risk
Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

Intent
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company, but the truth is, I know very little about this company. My intent with this post, is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

What They Do
Gentherm designs, develops, and manufactures thermal management technologies for automotive passenger comfort and convenience, battery thermal management, remote power generation, patient temperature management, environmental product testing and other consumer and industrial temperature control needs. Industry peers include Leggett and Platt, Inc., Magna International, Inc., and Toyota Boshoku Corporation.

Short-Term Target
My current short-term target for the stock is $43.47, with an initial trailing stop set at $38.66. Based on a recent price of $39.25, upward price movement will find resistance at $40.22 and again at $41.73, with final resistance found at $42.90. Downward price movement will find support at $38.47 and again at $37.76, with final support found at $36.85.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.42, meaning this stock, will move 42% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 3% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $36. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $41. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 373 shares of stock with a cost basis of $26.81 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $39.25 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $14,640 a gain of 46%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 66 insider trades involving 352,086 shares of stock. Of those 66 insider trades, 33 were Buys involving 189,866 shares of stock, and 33 were Sells involving 162,220 shares of stock, creating an insider buy to sell ratio of roughly 1.2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $38. The stock price during that time period averaged $35, earnings averaged $1.78 per share, and the average PE Ratio was 20. The current PE Ratio is 21.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.80%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $44 and my target prices are derivatives of my fair value estimate.

Gentherm Incorporated (Nasdaq: THRM) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $26 initiate target, but below my most recent $55 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/12/19

A Quickie With Allison Transmission Holdings

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Allison Transmission Holdings designs and manufactures commercial and military fully-automatic transmissions. Listed competitors include Caterpillar, Inc., Ford Motor Company, and ZF Friedrichshafen AG.

Short-Term Target
My current short-term target for the stock is $48.94, with an initial trailing stop set at $44.65. Based on a recent price of $45.33, upward price movement will find resistance at $46.20 and again at $47.33, with final resistance found at $48.44. Downward price movement will find support at $44.08 and again at $42.90, with final support found at $41.65.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.20, meaning this stock, will move 20% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $100. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $62. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 362.19 shares of stock with a cost basis of $27.61 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $43.91 per share. During that holding period you would have collected $219.07 in dividends, and your initial $10K investment would have returned to you $15,904 a gain of 59%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 80 insider trades involving 2,008,242 shares of stock. Of those 80 insider trades, 51 were Buys involving 1,034,667 shares of stock, and 29 were Sells involving 973,575 shares of stock, creating an insider buy to sell ratio of roughly 1 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $24. The stock price during that time period averaged $30, earnings averaged $1.90 per share, and the average PE Ratio was 16. The current PE Ratio is 9.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.14%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $74 and my target prices are derivatives of my fair value estimate.

Allison Transmission Holdings, Inc. (NYSE: ALSN) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $45 initiate target, but below my most recent $93 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/11/19

A Quickie With Harley-Davidson

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Harley-Davidson is the parent company for the groups of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). The Motorcycles segment consists of HDMC which designs, manufactures and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise and related services. The Financial Services segment consists of HDFS which provides wholesale and retail financing and insurance and insurance-related programs primarily to Harley-Davidson dealers and their retail customers. Industry peers include Triumph Motorcycles Ltd, Ultra Motorcycle Company, and Viper Motorcycle Company.

Short-Term Target
My current short-term target for the stock is $38.84, with an initial trailing stop set at $34.92. Based on a recent price of $35.45, upward price movement will find resistance at $36.52 and again at $37.40, with final resistance found at $40.05. Downward price movement will find support at $34.31 and again at $33.33, with final support found at $32.72.

Volatility
There are many different assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative a stock’s volatility. The beta ratio for this stock is 1.26, meaning this stock, will move 26% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $77. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $49. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/30/13), you would have received 156.76 shares of stock with a cost basis of $63.79 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $34.12 per share. During that holding period you would have collected $217.92 in dividends, and your initial $10K investment would have returned to you $5,349 a loss of 47%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 40 insider trades involving 389,376 shares of stock. Of those 40 insider trades, 20 were Buys involving 251,581 shares of stock, and 20 were Sells involving 137,795 shares of stock, creating an insider buy to sell ratio of roughly 2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $46. The stock price during that time period averaged $55, earnings averaged $3.66 per share, and the average PE Ratio was 15. The current PE Ratio is 9.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.32%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $55 and my target prices are derivatives of my fair value estimate.

Harley-Davidson, Inc. (NYSE: HOG) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $33 initiate target, but below my most recent $89 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/10/19

A Quickie With Patterson Companies

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always within a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Patterson Companies is a specialty distributor serving the dental supply and animal health supply markets. The company offers products, equipment, software, technology solutions and services to dental practioners as well as consumable supplies, equipment and software, diagnostic products, vaccines and pharmaceuticals to both the animal markets. Industry peers include are DENTSPLY International, Henry Schein, and MWI Veterinary Supply.

Short-Term Target
My current short-term target for the stock is $24.11, with an initial trailing stop set at $22.18. Based on a recent price of $22.52, upward price movement will find resistance at $23.14 and again at $25.32. Downward price movement will find support at $22.09 and again at $21.62, with final support found at $21.17.

Volatility
There are many assorted metrics available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative of a stock’s volatility. The beta ratio for this stock is 1.09, meaning this stock, will move 9% higher or lower than the overall movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 12% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $12. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $21. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (04/30/14), you would have received 245.70 shares of stock with a cost basis of $40.70 per share. Had you held the stock for five years and then closed your position (04/30/2019), you would have closed at $21.84 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $5,366 a loss of 46%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 21 insider trades involving 103,825 shares of stock. Of those 21 insider trades, 16 were Buys involving 91,543 shares of stock, and 5 were Sells involving 12,282 shares of stock, creating an insider buy to sell ratio of roughly 7.5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $40. The stock price during that time period averaged $40, earnings averaged $1.94 per share, and the average PE Ratio was 21. The current PE Ratio is 28.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.81%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $24 and my target prices are derivatives of my fair value estimate.

Patterson Companies, Inc. (Nasdaq: PDCO) – FYE 04/2019 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $14 initiate target, but below my most recent $30 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/09/19

A Quickie With American Woodmark Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
American Woodmark manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. Products are sold under the brand names of American Woodmark®, Timberlake®, Shenandoah Cabinetry®, Shenandoah Value Series ™, and Waypoint Living Spaces®. Industry peers include Masterbrand Cabinets, Elkay Manufacturing, and Masco Corporation.

Short-Term Target
My current short-term target for the stock is $85.02, with an initial trailing stop set at $83.10. Based on a recent price of $84.37, upward price movement will find resistance at $87.51 and again at $91.57, with final resistance found at $92.58. Downward price movement will find support at $79.98 and again at $76.80, with final support found at $73.85.

Volatility
There are many different charts and graphs available to help investors determine the theoretical volatility of a stock as compared to the volatility of the entire market. To me, the beta ratio is the metric that is the most representative a stock’s volatility. The beta ratio for this stock is 1.7, meaning this stock, will, theoretically, move 70% higher or lower than the movement of the market.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 6% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $95. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $93. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (04/30/14), you would have received 333.22 shares of stock with a cost basis of $30.01 per share. Had you held the stock for five years and then closed your position (04/30/2019), you would have closed at $89.93 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $29,967 a gain of 200%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 34 insider trades involving 47,017 shares of stock. Of those 34 insider trades, 30 were Buys involving 38,928 shares of stock, and 4 were Sells involving 8,089 shares of stock, creating an insider buy to sell ratio of roughly 5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $45. The stock price during that time period averaged $65.53, earnings averaged $2.99 per share, and the average PE Ratio was 22. The current PE Ratio is 19.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 7.64%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $100 and my target prices are derivatives of my fair value estimate.

The Boeing Company (NYSE: BA) – FYE 12/2018 – SELL HALF – The stock is currently trading at levels above my most recent $245 baseline value estimate, but below my most recent $391 terminate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/07/19

A Quickie With The Boeing Company

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
The Boeing Company develops, produces and markets commercial jet aircraft, and provides related support services. The company also performs research, development, production, modification and support of products and related systems for the US Department of Defense, NASA, international defense markets, civil markets and commercial satellite markets. Additionally, the company is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for the US Government. Listed competitors include Northrop Grumman, Lockheed Martin, and Airbus Group N.V.

Short-Term Target
My current short-term target for the stock is $389.43, with an initial trailing stop set at $350.52. Based on a recent price of $355.86, upward price movement will find resistance at $368 and again at $377.70, with final resistance found at $390.11. Downward price movement will find support at $342.76 and again at $337.79, with final support found at $321.69.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 13% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $413. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $406. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 73.27 shares of stock with a cost basis of $136.49 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $322.50 per share. During that holding period you would have collected $351 in dividends, and your initial $10K investment would have returned to you $23,628 a gain of 136%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 90 insider trades involving 368,596 shares of stock. Of those 90 insider trades, 35 were Buys involving 185,231 shares of stock, and 55 were Sells involving 183,365 shares of stock, creating an insider buy to sell ratio of roughly 1 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $62. The stock price during that time period averaged $172, earnings averaged $8.23 per share, and the average PE Ratio was 21. The current PE Ratio is 17.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 6.17%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $245 and my target prices are derivatives of my fair value estimate.

The Boeing Company (NYSE: BA) – FYE 12/2018 – SELL HALF – The stock is currently trading at levels above my most recent $245 baseline value estimate, but below my most recent $391 terminate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/07/19

A Quickie With Aerovironment, Inc.

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
AeroVironment supplies unmanned aircraft systems, or UAS, tactical missile systems and related services primarily to organizations within the U.S. Department of Defense, or DoD. The company also supplies charging systems and services for electric vehicles, or EVs, and power cycling and test systems to commercial, consumer and government customers. Industry peers include Lockheed Martin Corporation, L-3 Communications, and Aker ASA.

Short-Term Target
My current short-term target for the stock is $74.60, with an initial trailing stop set at $55.47. Based on a recent price of $56.31, upward price movement will find resistance at $64.82 and again at $67.62, with final resistance found at $70.65. Downward price movement will find support at $56.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 59% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $29. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $59. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (04/30/14), you would have received 296.12 shares of stock with a cost basis of $33.77 per share. Had you held the stock for five years and then closed your position (04/30/2019), you would have closed at $68.56 per share. During that holding period you would have collected $0 in dividends, and your initial $10K investment would have returned to you $20,302 a gain of 103%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 76 insider trades involving 299,482 shares of stock. Of those 76 insider trades, 18 were Buys involving 46,821 shares of stock, and 58 were Sells involving 252,661 shares of stock, creating an insider buy to sell ratio of roughly 0.2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $36. The stock price during that time period averaged $35, earnings averaged $0.50 per share, and the average PE Ratio was 69. The current PE Ratio is 44.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.60%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $35.

Aerovironment, Inc. (Nasdaq: AVAV) – FYE 04/2019 – OVER VALUED – The stock is currently trading at levels above my most recent $56 terminate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/06/19

A Quickie With The J.M. Smucker Company

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
The JM Smucker Company is a manufacturer and marketer of branded food and beverage products. The company’s principal products are coffee, dog food, pet snacks, cat food, peanut butter, fruit spreads, frozen handheld products, shortening and oils, portion control products, juices and beverages, and flour and baking ingredients. Industry peers include Conagra Brands, Inc., Hormel Foods Corporation, Mondelez International, Inc..

Short-Term Target
My current short-term target for the stock is $125.67, with an initial trailing stop set at $117.93. Based on a recent price of $119.73, upward price movement will find resistance at $121.82 and again at $126.80, with final resistance found at $127.47. Downward price movement will find support at $115.68 and again at $106.81, with final support found at $103.20.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 1% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $149. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $93. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (04/30/14), you would have received 103.43 shares of stock with a cost basis of $96.68 per share. Had you held the stock for five years and then closed your position (04/30/2019), you would have closed at $122.63 per share. During that holding period you would have collected $295.87 in dividends, and your initial $10K investment would have returned to you $12,684 a gain of 27%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 46 insider trades involving 124,010 shares of stock. Of those 46 insider trades, 25 were Buys involving 102,805 shares of stock, and 21 were Sells involving 21,205 shares of stock, creating an insider buy to sell ratio of roughly 5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2014 through FY 2018 was $60. The stock price during that time period averaged $116, earnings averaged $9.08 per share, and the average PE Ratio was 13. The current PE Ratio is 14.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 4.11%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $119.

The J.M. Smucker Company (NYSE: SJM) – FYE 04/2019 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $71 initiate target, but below my most recent $149 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/05/19

A Quickie With Tupperware Brands Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Tupperware Brands is a direct-to-consumer marketer of design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware® brand and beauty and personal care products through the Armand Dupree®, Avroy Shlain®, BeautiControl®, Fuller®, NaturCare®, Nutrimetics® and Nuvo® brands. Industry peers include Alticor, Inc., Newell Rubbermaid, and Avon Products.

Short-Term Target
My current short-term target for the stock is $26.54, with an initial trailing stop set at $18.14. Based on a recent price of $18.42, upward price movement will find resistance at $20.35 and again at $21.92, with final resistance found at $23.04. Downward price movement will find support at $17.41.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $20. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $30. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 121.91 shares of stock with a cost basis of $82.03 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $31.57 per share. During that holding period you would have collected $334.30 in dividends, and your initial $10K investment would have returned to you $3,849 a loss of 62%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 64 insider trades involving 241,413 shares of stock. Of those 64 insider trades, 47 were Buys involving 221,565 shares of stock, and 17 were Sells involving 19,848 shares of stock, creating an insider buy to sell ratio of roughly 11 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $35. The stock price during that time period averaged $61, earnings averaged $3.15 per share, and the average PE Ratio was 19. The current PE Ratio is 15.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.49%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $45.

Tupperware Brands Corporation (NYSE: TUP) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $27 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/03/19

A Quickie With Silgan Holdings

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Silgan Holdings is manufacturer of rigid packaging for consumer goods products. Products include steel and aluminum containers for human and pet food and general line products, metal and plastic closures and dispensing systems for food, beverage, health care, garden, personal care, home and beauty products, and custom designed plastic containers for personal care, food, health care, pharmaceutical, household and industrial chemical, pet care, agricultural, automotive and marine chemical products. Industry peers include Crown Holdings, Berry Plastics Group, and Ball Corporation.

Short-Term Target
My current short-term target for the stock is $30.99, with an initial trailing stop set at $30.54. Based on a recent price of $31.01, upward price movement will find no resistance. Downward price movement will find support at $30.09 and again at $29.12, with final support found at $28.61.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 18% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $31. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $29. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 416.49 shares of stock with a cost basis of $24.01 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $23.62 per share. During that holding period you would have collected $231.85 in dividends. With a 2 for 1 stock split in May of 2017, and your initial $10K investment would have returned to you $9,838 a loss of 2%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 48 insider trades involving 1,300,094 shares of stock. Of those 48 insider trades, 17 were Buys involving 233,404 shares of stock, and 31 were Sells involving 1,066,690 shares of stock, creating an insider buy to sell ratio of roughly 0.2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $31. The stock price during that time period averaged $27, earnings averaged $2.79 per share, and the average PE Ratio was 9. The current PE Ratio is 13.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 4.83%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $35.

Silgan Holdings, Inc. (Nasdaq: SLGN) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $21 initiate target, but below my most recent $44 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/02/19

A Quickie With Sealed Air Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels type companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation and that valuations, while given as a specific amount, are always with in a valuation range. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Sealed Air Corporation is engaged in the food safety and security, and the facility hygiene and product protection business, serving the end markets of food and beverage processing, food service, retail, health care and industrial, commercial and consumer applications. The company has widely recognized and inventive brands such as Bubble Wrap ® brand cushioning, Cryovac ® brand food packaging solutions and Diversey ® brand cleaning and hygiene solutions. Industry peers include Printpack, Sonoco Products, and Bemis Company.

Short-Term Target
My current short-term target for the stock is $45.81, with an initial trailing stop set at $42.14. Based on a recent price of $42.78, upward price movement will find resistance at $43.95 and again at $44.87, with final resistance found at $46.44. Downward price movement will find support at $41.41 and again at $37.34, with final support found at $34.47.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 8% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $28. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $38. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 307.41 shares of stock with a cost basis of $32.53 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $34.84 per share. During that holding period you would have collected $189.91 in dividends, and your initial $10K investment would have returned to you $10,900 a gain of 9%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 33 insider trades involving 183,735 shares of stock. Of those 33 insider trades, 24 were Buys involving 175,202 shares of stock, and 9 were Sells involving 8,533 shares of stock, creating an insider buy to sell ratio of roughly 20 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $29. The stock price during that time period averaged $42.34, earnings averaged $3.19 per share, and the average PE Ratio was 13. The current PE Ratio is 24.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.67%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $34.

Sealed Air Corporation (NYSE: SEE) – FYE 12/2018 – SELL HALF – The stock is currently trading at levels above my most recent $34 baseline value estimate, but below my most recent $55 terminate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 07/01/19

A Quickie With Schweitzer-Mauduit International

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Schweitzer-Mauduit International is a producer of premium specialty papers and resin-based products. The company manufactures and sells paper and reconstituted tobacco products to the tobacco industry as well as specialized paper products for use in other applications. The company also manufactures resin-based plastic netting through an extrusion process, as well as certain meltblown products and machined plastic core tubes. Industry peers include Japan Tobacco, Miquel y Costas & Miquel, and Reynolds American.

Short-Term Target
My current short-term target for the stock is $35.43, with an initial trailing stop set at $31.28. Based on a recent price of $31.76, upward price movement will find resistance at $33.24 and again at $35.64, with final resistance found at $37.70. Downward price movement will find support at $31.32 and again at $29.19, with final support found at $27.38.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $63. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $58. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 194.29 shares of stock with a cost basis of $51.47 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $25.05 per share. During that holding period you would have collected $311.71 in dividends, and your initial $10K investment would have returned to you $5,179 a loss of 48%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 37 insider trades involving 150,073 shares of stock. Of those 37 insider trades, 26 were Buys involving 113,033 shares of stock, and 11 were Sells involving 37,040 shares of stock, creating an insider buy to sell ratio of roughly 3 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $43. The stock price during that time period averaged $45.33, earnings averaged $2.82 per share, and the average PE Ratio was 16. The current PE Ratio is 11.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied by my default equity risk premium. My cost of common equity for this stock is 5.43%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $58.

Schweitzer-Mauduit International, Inc. (NYSE: SWM) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $35 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/27/19

A Quickie With Tredegar Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Tredegar Corporation is a manufacturer of polyethylene (“PE”) plastic films, primarily utilized in personal care materials, surface protection films and specialty and optical lighting applications, polyester (“PET”) films for use in packaging applications that have specialized properties, such as heat resistance, strength, barrier protection and the ability to accept high-quality print graphics, and aluminum extrusions which are high-quality, soft-alloy and medium-strength aluminum extrusions primarily for building and construction, automotive, consumer durables, machinery and equipment, electrical and distribution markets. Listed competitors are Rio Tinto Alcan, Griffon Corporation, and AEP Industries.

Short-Term Target
My current short-term target for the stock is $18.30, with an initial trailing stop set at $15.96. Based on a recent price of $16.20, upward price movement will find resistance at $16.93 and again at $17.44, with final resistance found at $18.13. Downward price movement will find support at $15.95 and again at $15.17.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 23% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $44. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $(2). Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 347.10 shares of stock with a cost basis of $28.81 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $15.86 per share. During that holding period you would have collected $144.38 in dividends, and your initial $10K investment would have returned to you $5,649 a loos of 44%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 52 insider trades involving 166,500 shares of stock. Of those 52 insider trades, 44 were Buys involving 141,814 shares of stock, and 8 were Sells involving 24,686 shares of stock, creating an insider buy to sell ratio of roughly 6 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $36. The stock price during that time period averaged $22, earnings averaged $2.18 per share, and the average PE Ratio was 10. The current PE Ratio is 6.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 6.15%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $46.

Tredegar Corporation (NYSE: TG) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $28 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/25/19

A Quickie With Superior Uniform Group

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Superior Uniform Group manufactures and sells work uniforms, corporate identity apparel, career apparel, and accessories for the medical and health fields, as well as for the industrial, commercial, leisure, and public safety markets. The company also provides customers with multilingual telemarketing and total office support solutions. Industry peers include Cintas Corporation, G&K Services, and UniFirst Corpopration.

Short-Term Target
My current short-term target for the stock is $18.52, with an initial trailing stop set at $17.04. Based on a recent price of $17.30, upward price movement will find resistance at $17.70 and again at $18.08, with final resistance found at $18.55. Downward price movement will find support at $16.66 and again at $16.18, with final support found at $15.74.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $21. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $18. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 648.51 shares of stock with a cost basis of $15.48 per share. With a stock split in February 2015, your shares would have increased to 1297.02 and your adjusted cost basis would have been $7.74 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $17.65 per share. During that holding period you would have collected $418.69 in dividends, and your initial $10K investment would have returned to you $23,222 a gain of 132%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 26 insider trades involving 181,893 shares of stock. Of those 26 insider trades, 16 were Buys involving 145,321 shares of stock, and 10 were Sells involving 36,572 shares of stock, creating an insider buy to sell ratio of roughly 4 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $32. The stock price during that time period averaged $17, earnings averaged $0.87 per share, and the average PE Ratio was 20. The current PE Ratio is 15.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 4.49%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $31.

Superior Uniform Group, Inc. (Nasdaq: SGC) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $18 initiate target. Please See Linked PDF Worksheet

A Final Note
As much as I like this stock, and I do, and as impressed as I am with the company’s financials and management, and I am, in the end, this is a classic value trap for two reasons. The first one is, the company is little followed by Wall Street analysts. The most important one is, the average daily trading volume is just to small.

There you are, short and to the point.

Wax
Posted on 06/21/19

A Quickie With Hanesbrands

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Hanesbrands is a manufacturer and marketer of bras, panties, shapewear, hosiery, men’s underwear, children’s underwear, socks, T-shirts and other activewear under the brand names Hanes, Champion, Bali, Playtex, Maidenform, JMS/Just My Size, L’eggs, Flexees, barely there, Wonderbra, Gear for Sports and Lilyette. The company was spun off from the Sara Lee Corporation in 2006. Listed competitors include Fruit of the Loom, L Brands, and Jockey International.

Short-Term Target
My current short-term target for the stock is $17.98, with an initial trailing stop set at $16.97. Based on a recent price of $17.23, upward price movement will find resistance at $17.65 and again at $18.32, with final resistance found at $19.09. Downward price movement will find support at $16.37 and again at $15.75, with final support found at $14.90.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $54. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $73. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 569.15 shares of stock with a cost basis of $17.57 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $12.53 per share. During that holding period you would have collected $268.47 in dividends, and your initial $10K investment would have returned to you $7,400 a loss of 26%, excluding dividends.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 79 insider trades involving 1,966,737 shares of stock. Of those 79 insider trades, 35 were Buys involving 1,322,018 shares of stock, and 44 were Sells involving 644,719 shares of stock, creating an insider buy to sell ratio of roughly 2 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $24. The stock price during that time period averaged $24, earnings averaged $0.96 per share, and the average PE Ratio was 24. The current PE Ratio is 11.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 5.66%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $32.

Hanesbrands, Inc. (NYSE: HBI) – FYE 12/2018 – UNDER VALUED – The stock is currently trading at levels below my most recent $19 initiate target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/20/19

A Quickie With Carters, Inc.

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Carter’s is a marketer of branded apparel exclusively for babies and young children through their Carter’s and OshKosh B’gosh (or “OshKosh”) brands. Industry peers include The Gap, Inc.,The Walt Disney Company, and Gerber Childrenswear LLC.

Short-Term Target
My current short-term target for the stock is $101.46, with an initial trailing stop set at $93.96. With a recent price of $95.39, upward price movement will find resistance at $98.99 and again at $101.74, with final resistance found at $106.52. Downward price movement will find support at $92.77 and again at $89.49, with final support found at $83.89.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $111. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $95. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 139.30 shares of stock with a cost basis of $71.79 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $81.62 per share. During that holding period you would have collected $177.71 in dividends, and your initial $10K investment would have returned to you $11,547 a gain of 15%.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 131 insider trades involving 462,466 shares of stock. Of those 131 insider trades, 48 were Buys involving 264,121 shares of stock, and 83 were Sells involving 198,345 shares of stock, creating an insider buy to sell ratio of roughly 1.5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $54. The stock price during that time period averaged $90.40, earnings averaged $4.25 per share, and the average PE Ratio was 21. The current PE Ratio is 15.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 4.82%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $102.

Carters, Inc. (NYSE: CRI) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $61 initiate target, but below my most recent $128 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/19/19

A Quickie With Brunswick Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Brunswick Corporation is a designer, manufacturer, and marketer of recreation products including outboard, sterndrive, and inboard engines; trolling motors; propellers; engine control systems; and marine parts and accessories, fiberglass pleasure, sport cruiser, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, and heavy-gauge aluminum boats, fitness products include cardiovascular and strength training equipment for both the commercial and consumer markets, and billiards tables, and other game room tables and accessories. Industry peers include Johnson Outdoors, Inc., Mastercraft Boat Holdings, Inc., and Nautilus, Inc.

Short-Term Target
My current short-term target for the stock is $53.50, with an initial trailing stop set at $44.32. With a recent price of $44.9, upward price movement will find resistance at $47.24 and again at $49.27, with final resistance found at $51.24. Downward price movement will find support at $43.64 and again at $41.73.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $73. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $49. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 217.11 shares of stock with a cost basis of $46.06 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $46.45 per share. During that holding period you would have collected $123.28 in dividends, and your initial $10K investment would have returned to you $10,208 a gain of 2%.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 97 insider trades involving 259,523 shares of stock. Of those 97 insider trades, 76 were Buys involving 223,226 shares of stock, and 21 were Sells involving 36,297 shares of stock, creating an insider buy to sell ratio of roughly 6 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $55. The stock price during that time period averaged $51.52, earnings averaged $4.50 per share, and the average PE Ratio was 11. The current PE Ratio is 11.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 7.43%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $65.

Brunswick Corporation (NYSE: BC) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $39 initiate target, but below my most recent $81 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/18/19

A Quickie With Generac Holdings

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I know very little about this company. I can tell you that I am not a shareholder and I can also tell you that I am a value investor focusing on picks and shovels companies.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on the company’s most recent 10-K filing, so you can determine if you have any investment interest.

Past and future gains contained in this post are based on actual and anticipated earnings, actual and anticipated dividends, and actual and anticipated price appreciation. Investors should always be aware that any investment has the potential for loss, and past performance is no guarantee of future results.

What They Do
Generac Holdings is a designer and manufacturer of power generation equipment and other engine powered products for the residential, light commercial and industrial markets. Products include standby generators, portable and mobile generators, light towers which provide temporary lighting, and mobile heaters and pumps used in the oil and gas, and construction markets. Industry peers include Briggs and Stratton Power Products Group, LLC, Cummins Power Generation, Inc., and Doosan Corporation

Short-Term Target
My current short-term target for the stock is $59.94, with an initial trailing stop set at $63.78. With a recent price of $64.75, upward price movement will find no resistance. Downward price movement will find support at $62.85 and again at $59.46, with final support found at $56.99.

Quality of Earnings
A company’s earnings can be impacted by sources unrelated to the company’s day to day operations. These unrelated sources will distort a company’s earnings and consequently its fair value. Investors should always explore the sources of a company’s earnings to better understand potential valuation impacts. Considering the company’s earnings, 0% came from tax benefits while 0% came from sources unrelated to day to day operations.

Momentum Target
My momentum target for the stock is $85. Momentum targets are determined by integrating a company’s most recent annual EPS and year-over-year earnings growth, with the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $76. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Five Year Growth of $10K
If you had invested $10K in this stock five years ago (12/31/13), you would have received 176.55 shares of stock with a cost basis of $56.64 per share. Had you held the stock for five years and then closed your position (12/31/2018), you would have closed at $49.70 per share. During that holding period you would have collected $1.24 in dividends, and your initial $10K investment would have returned to you $8,776, a loss of 12%.

Insider Transactions
The SEC classifies insiders as “management, officers or any beneficial owners with more than 10% class of a company’s security.” Insiders are required to abide by certain rules and fill out SEC forms every time they buy or sell company shares. In addition, to prevent insider trading, or benefiting illegally from material non-public information that their positions give them access to, the law prevents insiders from deposing of shares within six months of their purchase. This effectively bars insiders from profiting from quick trades based on their “insider” knowledge.

Over the past 12 months, the company has recorded 102 insider trades involving 771,044 shares of stock. Of those 102 insider trades, 46 were Buys involving 296,565 shares of stock, and 56 were Sells involving 474,479 shares of stock, creating an insider buy to sell ratio of roughly 0.5 to 1.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $34. The stock price during that time period averaged $44.69, earnings averaged $2.83 per share, and the average PE Ratio was 16. The current PE Ratio is 15.

Cost of Common Equity
The cost of common equity is the minimum annual rate of return an investor should expect to earn when investing in shares of a particular company. I calculate this by adding the thirty-year treasury yield to the beta ratio for the stock multiplied my default equity risk premium. My cost of common equity for this stock is 5.63%.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. My fair value estimate for the stock is $66.

Generac Holdings, Inc. (NYSE: GNRC) – FYE 12/2018 – FAIRLY VALUED – The stock is currently trading at levels above my most recent $40 initiate target, but below my most recent $83 reduce target. Please See Linked PDF Worksheet

There you are, short and to the point.

Wax
Posted on 06/17/19