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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Allison Transmission Holdings, Inc. (XNYS:ALSN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ALSN
Name:
ALLISON TRANSMISSION HOLDINGS, INC. (XNYS:ALSN)
Sector:
143.00M
Industry:
Auto Parts
CEO:
Mr. David Graziosi
Total Employees:
3,400
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 51.45% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ALLISON TRANSMISSION HOLDINGS, INC.(ALSN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AUTO PARTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
36.15
One Month Price Target:
$36.34
Six Month Price Target :
$37.29
Likely Price in One Year's Time:
Ticker:
$38.43
Likely Trading Range Today Under (Normal Volatility)
$36.
Price Upper limit ($) :
$36.28
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$34.46
This week:
$32.36
This month :
$28.58
Other Primary facts
Market Cap:
3.46B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
96.24M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.16%
-9.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$44.01
$40.45
$28.29
$31.85
Medium risk (<10%) entry points
Buy Call
Sell Call
$39.29
Buy Put:
Sell Put:
$38.53
$33.00
$33.77
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ALSN
Sharpe Ratio:
-1.12%
Comparison:
ALSN, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -214.65% lower than the industry
& is -149.26% lower than the market/S&P 500 average
Average Returns/Yield of
ALSN
Daily returns:
-0.02%
Weekly returns:
-0.08%
Monthly returns:
-0.33%
Yearly returns:
9.58%
Comparison of returns:
Average annual returns/yield (last 3 years) is -141.75% below industry average
Classification:
ALSN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.02
Statistical test of Returns:
ALSN has yielded a lower return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
2.27%
Weekly Volatility:
5.08%
Monthly Volatility:
10.16%
Yearly Volatility:
35.20%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.58%
Volatility in last five trading days has been -74.61% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.68%
Weekly VaR:
-10.47%
Monthly VaR:
-20.94%
How Much Can the price of
ALSN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-72.55%
This translates to price declining to:
$29.38
This translates to price declining to:
$9.92
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ALSN is a 47.81% riskier investment compared to the market/S&P 500 & is 26.63% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.48% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ALSN
Beta in relation to market/S&P 500--0.94
Expected beta in 1 year's time:
0.674
Expected beta in 3 year's time:
0.953
Unlevered (debt free) Beta:
0.243
Beta in relation to Nasdaq (XNAS):
0.468
Beta in relation to all global stocks::
0.525
Beta Comparison & Analysis
Beta of competitors/peers::
1.565
Beta is -39.95% lower than peers
Average Industry Beta:
1.212
Beta is -22.47% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
44.81%
Sustainable growth rate is 131.69% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.136
Alpha is 623.98% above industry average alpha yield
Alpha is -865% below the market average
Analysis of Cost of Capital of
ALSN
Equity cost of capital:
0.096
Equity cost of capital is -16.29% below industry mean WACC
Unlevered (without debt) cost of capital:
2.48%
Before-tax cost of debt:
4.62%
After-tax cost of debt:
3.65%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.65%
WACC is -29.03% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$25.88
Revenue growth rate per share of (3Y):
5.12
Annual revenue growth rate is -87.88% below industry average
EPS:
$4.37
Expected Annual growth rate of EPS (3Y):
-5.86%
Expected future EPS growth rate is -185.02% lower than the Auto Parts industry
Free cash flow (FCF) per share:
$5.07
Balance sheet equity growth per share: 17.86%
Equity growth rate per share is -221.30% lower than the industry
Debt per share
$26.01
EBITDA per share
$8.81
Valuation Analysis Today of
ALSN
P/E Ratio:
7.83
P/E Ratio of Competitors/Peers:
8.43
P/E ratio is -7.12% lower than main peers & is -63.32% lower than the industry
Stock price/value with industry average P/E ratio: $93.31
ALSN is -61.26% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $31.97
Present value of the expected future dividends only: $13.74
P/S (Price to Sales ratio):
1.4
Price to sales ratio is -39.00% below the industry mean
P/B (Price to book value ratio):
5.12
Price to free cash flow: 7.13
Price to free cash flow ratio is -36.17% lower than the industry
Net income growth rate (3Y):
-19.48%
Net income growth rate is -152.47% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.43%
Dividend yeild: 2.21%
Previous Dividend: $0.21
Previous adjusted dividend: $0.21
Previous Dividend: $0.80
Expected next dividend best case: $0.23
Expected next dividend worst case: $0.19
Average dividend payment (long-term): $0.18
Average dividend increase/decrease (growth rate) % per period: 3.56%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-13--$0.21
2021-11-19--$0.19
2021-05-14--$0.19
2022-03-04--$0.21
2021-08-13--$0.19
2021-02-19--$0.19
Dividend growth rate is -143.48% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
368.63%
Net debt to equity ratio:
348.75%
Debt to assets ratio:
55.29%
Net debt to assets ratio:
52.31%
Debt-to-asset ratio is 5.45% above industry average
Ability to repay debt:
Interest coverage ratio:
7.31
Interest coverage ratio is -83.16% less than industry average
Looking forward:
Debt growth rate:
-0.12%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 3.73%
Analysis of Key Statistics
Correlation of price movement with the market:
0.527
Statistical significance of correlation:
ALSN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.534
Stock price is -1.36% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.534
Correlation of price movement with Nasdaq (^IXIC):
0.035
Covariance of price movement with the market:
0.046
Kurtosis
3.683
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.109
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ALSN
Gross Profit Margin Ratio:
188%
Operating Profit Margin Ratio:
27.74%
Operating profit margin is 192.75% higher than the industry
Net Profit Margin Ratio:
188%
Effective Tax Rate:
22.38%
Effective tax rate is -6.65% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
66.42%
Return on equity (ROE) is 209.91% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.96%
Return on assets (ROA) is 8.72% higher than the industry
Financial Leverage:
2.2x
Current Ratio:
1.52
Current ratio is -24.01% below industry average
Cash Conversion Cycle (days):
8.4
Cash conversion cycle is -85.99% below industry average
The remaining useful life of property plant & equipment is: 5.5 years
Stock based compensation to net income ratio:
0.67%
In-depth Efficiency Analysis
Revenue generated per employee:
732.6K
Each employee generates 128% more revenue than industry average revenue per employee
EBITDA generated per employee:
249.4K
Each employee generates 300% more EBITDA than industry average revenue per employee
Profit generated per employee:
132.6K
Each employee generates 288% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
42.1K
Each employee generates 535% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.1M
Each employee generates 535% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 16.33%
Growth rate in R&D investment/expenditure is -210.86% lower than the industry
Competitors/Peer firms of
ALSN
REVOLVE GROUP, INC. (XNYS:RVLV)
MERITAGE HOMES CORPORATION (XNYS:MTH)
VEONEER, INC. (XNYS:VNE)
ASBURY AUTOMOTIVE GROUP, INC. (XNYS:ABG)
LCI INDUSTRIES (XNYS:LCII)
H & R BLOCK, INC. (XNYS:HRB)
TAYLOR MORRISON HOME CORPORATION (XNYS:TMHC)
SIX FLAGS ENTERTAINMENT CORPORATION (XNYS:SIX)
CARTER'S, INC. (XNYS:CRI)
Current Analyst Ratings
Strong buy�21%
Buy�8%
Hold�33%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.49B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.32B
1.17B
176.00M
-
307.00M
-
-
483.00M
-
116.00M
151.00M
848.00M
691.00M
451.00M
581.00M
130.00M
451.00M
Statement of Cash Flow
Date:
Period:
38.00M
Differed Income Tax :
5.00M
Stock Based Compensation :
3.00M
Change in Working Capital :
- 23000.00K
Accounts Receivables:
- 44000.00K
Other Working Capital:
- 16000.00K
Other Non-Cash Items:
11.00M
Net Cash Provided by Operating Activities:
163.00M
Investments in PP&E:
- 20000.00K
Net Acquisitions:
- 24000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
145.00M
-
145.00M
343.00M
210.00M
47.00M
745.00M
708.00M
2.08B
913.00M
31.00M
-
53.00M
3.78B
-
4.53B
228.00M
10.00M
48.00M
39.00M
212.00M
489.00M
2.50B
234.00M
3.36B
-
3.85B
1.00M
- 1098000.00K
- 56000.0K
1.83B
March 31, 2022 at 6:00:00 AM
1.80B
679.00M
4.53B
-
2.51B
2.4B
6.00M
-
- 38000.00K
- 97000.00K
-
- 81000.00K
- 20000.00K
92.00M
- 106000.00K
- 1000.00K
18.00M
145.00M
127.00M
163.00M
- 20000.00K
143.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ALSN
2023
2024
2025
2026
2027
$40.75
$43.32
$46.06
$48.96
$52.06