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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Darling Ingredients Inc. (XNYS:DAR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DAR
Name:
DARLING INGREDIENTS INC. (XNYS:DAR)
Sector:
80.47M
Industry:
Packaged Foods
CEO:
Mr. Randall Stuewe
Total Employees:
9,900
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -149.68% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DARLING INGREDIENTS INC.(DAR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
75.18
One Month Price Target:
$75.69
Six Month Price Target :
$78.22
Likely Price in One Year's Time:
Ticker:
$81.27
Likely Trading Range Today Under (Normal Volatility)
$74.94
Price Upper limit ($) :
$75.73
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$70.56
This week:
$64.86
This month :
$54.54
Other Primary facts
Market Cap:
12.06B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
160.37M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
9.11%
-20.1%
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:
$96.55
$86.48
$53.81
$63.88
Medium risk (<10%) entry points
Buy Call
Sell Call
$83.20
Buy Put:
Sell Put:
$81.05
$67.13
$69.31
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DAR
Sharpe Ratio:
6.54%
Comparison:
DAR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 399.28% higher than the industry
& ratio is 187.07% higher than the market/S&P 500 average
Average Returns/Yield of
DAR
Daily returns:
0.21%
Weekly returns:
1.06%
Monthly returns:
4.22%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 501.99% above industry average
Classification:
DAR, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.37
Statistical test of Returns:
DAR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.09%
Weekly Volatility:
6.91%
Monthly Volatility:
13.83%
Yearly Volatility:
47.90%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.95%
Volatility in last five trading days has been -37.01% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.14%
Weekly VaR:
-13.73%
Monthly VaR:
-27.45%
How Much Can the price of
DAR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
>85%
This translates to price declining to:
$58.75
This translates to price declining to:
$11.28
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DAR is a 93.77% riskier investment compared to the market/S&P 500 & is 66.00% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 35.18% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DAR
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.744
Expected beta in 3 year's time:
1.053
Unlevered (debt free) Beta:
0.845
Beta in relation to Nasdaq (XNAS):
0.937
Beta in relation to all global stocks::
0.767
Beta Comparison & Analysis
Beta of competitors/peers::
0.837
Beta is 44.09% higher than peers
Average Industry Beta:
0.586
Beta is 105.73% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.73%
Sustainable growth rate is 95.76% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.393
Alpha is 3028.85% above industry average alpha yield
Alpha is 2500% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DAR
Equity cost of capital:
0.114
Equity cost of capital is 59.24% above industry mean WACC
Unlevered (without debt) cost of capital:
7.99%
Before-tax cost of debt:
3.26%
After-tax cost of debt:
2.57%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.57%
WACC is 57.30% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.56
Revenue growth rate per share of (3Y):
3.45
Annual revenue growth rate is -102.70% below industry average
EPS:
$4.13
Expected Annual growth rate of EPS (3Y):
27.09%
Expected future EPS growth rate is 50.18% higher than the Packaged Foods industry
Free cash flow (FCF) per share:
$2.56
-
-
Debt per share
$11.24
EBITDA per share
$7.65
Valuation Analysis Today of
DAR
P/E Ratio:
17.96
P/E Ratio of Competitors/Peers:
32.31
P/E ratio is -44.42% lower than main peers & is -53.52% lower than the industry
Stock price/value with industry average P/E ratio: $159.58
DAR is -52.89% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.38
Price to sales ratio is 2.73% above the industry mean
P/B (Price to book value ratio):
3.45
Price to free cash flow: 29.36
Price to free cash flow ratio is 4.36% higher than the industry
Net income growth rate (3Y):
134.62%
Net income growth rate is 1151.28% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
52.64%
Net debt to equity ratio:
51.99%
Debt to assets ratio:
27.26%
Net debt to assets ratio:
26.92%
Debt-to-asset ratio is -49.43% below industry average
Ability to repay debt:
Interest coverage ratio:
20.03
Interest coverage ratio is -91.88% less than industry average
Looking forward:
Debt growth rate:
-8.28%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 7.50%
Analysis of Key Statistics
Correlation of price movement with the market:
0.612
Statistical significance of correlation:
DAR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 42.73% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
-0.006
Covariance of price movement with the market:
-0.01
Kurtosis
4.941
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:
-0.859
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
DAR
Gross Profit Margin Ratio:
104%
Operating Profit Margin Ratio:
18.14%
Operating profit margin is 275.73% higher than the industry
Net Profit Margin Ratio:
104%
Effective Tax Rate:
18.86%
Effective tax rate is -53.73% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.06%
Return on equity (ROE) is 81.61% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.39%
Return on assets (ROA) is 132.60% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.55
Current ratio is -43.57% below industry average
Cash Conversion Cycle (days):
15.8
Cash conversion cycle is -67.73% below industry average
The remaining useful life of property plant & equipment is: 6.9 years
Stock based compensation to net income ratio:
0.92%
In-depth Efficiency Analysis
Revenue generated per employee:
511.2K
Each employee generates -35% less revenue than industry average revenue per employee
EBITDA generated per employee:
123.9K
Each employee generates 10% more EBITDA than industry average revenue per employee
Profit generated per employee:
69.4K
Each employee generates 33% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
8.1K
Each employee generates -318% less free cash flow than industry average revenue per employee
Assets/Capital per employee
541.1K
Each employee generates -318% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DAR
LAMB WESTON HOLDINGS, INC. (XNYS:LW)
MOLSON COORS BEVERAGE COMPANY (XNYS:TAP)
MOLSON COORS BEVERAGE COMPANY (XNYS:TAP)
BJ'S WHOLESALE CLUB HOLDINGS, INC. (XNYS:BJ)
COTY INC. (XNYS:COTY)
US FOODS HOLDING CORP. (XNYS:USFD)
BUNGE LIMITED (XNYS:BG)
CAMPBELL SOUP COMPANY (XNYS:CPB)
Post Holdings, Inc. (XNYS:POST)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
5.06B
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:
3.75B
1.31B
-
-
396.17M
-
317.10M
713.27M
-
61.25M
317.10M
1.23B
917.86M
687.20M
856.08M
161.48M
687.20M
Statement of Cash Flow
Date:
Period:
79.25M
Differed Income Tax :
23.83M
Stock Based Compensation :
6.32M
Change in Working Capital :
- 75243.00K
Accounts Receivables:
- 41317.00K
Other Working Capital:
- 49999.00K
Other Non-Cash Items:
- 72691.00K
Net Cash Provided by Operating Activities:
152.19M
Investments in PP&E:
-
Net Acquisitions:
- 223753.00K
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):
4/2/22
2022
Q1
99.46M
-
99.46M
542.83M
491.69M
125.05M
1.26B
2.03B
1.24B
409.63M
1.56B
15.88M
97.71M
5.36B
-
6.62B
351.25M
76.99M
38.73M
-
385.18M
813.41M
1.80B
109.65M
2.31B
-
3.12B
1.73M
2.54B
- 311369.0K
-
April 2, 2022 at 6:00:00 AM
4.46B
3.43B
6.55B
-
1.88B
1.8B
-
- 70744.00K
- 294497.00K
- 146128.00K
-
- 17189.00K
-
344.23M
180.91M
- 8118.00K
30.49M
99.56M
69.07M
152.19M
- 71718.00K
80.47M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DAR
2023
2024
2025
2026
2027
$81.68
$126.21
$136.44
$147.49
$159.44