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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Encore Wire Corporation (XNAS:WIRE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WIRE
Name:
ENCORE WIRE CORPORATION (XNAS:WIRE)
Sector:
85.74M
Industry:
Electrical Equipment & Parts
CEO:
Mr. Daniel Jones
Total Employees:
1,440
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 336.88% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ENCORE WIRE CORPORATION(WIRE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRICAL EQUIPMENT & PARTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
126.38
One Month Price Target:
$127.29
Six Month Price Target :
$131.82
Likely Price in One Year's Time:
Ticker:
$137.26
Likely Trading Range Today Under (Normal Volatility)
$125.96
Price Upper limit ($) :
$127.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$119.16
This week:
$110.23
This month :
$94.09
Other Primary facts
Market Cap:
2.40B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
19.13M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.21%
-12.62%
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:
$159.84
$144.19
$92.92
$108.57
Medium risk (<10%) entry points
Buy Call
Sell Call
$139.09
Buy Put:
Sell Put:
$135.75
$113.62
$117.01
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WIRE
Sharpe Ratio:
5.10%
Comparison:
WIRE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 39.91% higher than the industry
& ratio is 123.67% higher than the market/S&P 500 average
Average Returns/Yield of
WIRE
Daily returns:
0.15%
Weekly returns:
0.77%
Monthly returns:
3.09%
Yearly returns:
41.50%
Comparison of returns:
Average annual returns/yield (last 3 years) is -10.65% below industry average
Classification:
WIRE, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.74
Statistical test of Returns:
WIRE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.86%
Weekly Volatility:
6.39%
Monthly Volatility:
12.78%
Yearly Volatility:
44.26%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.85%
Volatility in last five trading days has been -35.39% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.71%
Weekly VaR:
-12.78%
Monthly VaR:
-25.55%
How Much Can the price of
WIRE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-88.51%
This translates to price declining to:
$100.07
This translates to price declining to:
$14.52
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WIRE is a 80.34% riskier investment compared to the market/S&P 500 & is 54.50% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -22.80% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WIRE
Beta in relation to market/S&P 500--1.28
Expected beta in 1 year's time:
0.864
Expected beta in 3 year's time:
1.222
Unlevered (debt free) Beta:
1.153
Beta in relation to Nasdaq (XNAS):
0.835
Beta in relation to all global stocks::
0.712
Beta Comparison & Analysis
Beta of competitors/peers::
1.096
Beta is 16.85% higher than peers
Average Industry Beta:
1.797
Beta is -28.74% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
42.39%
Sustainable growth rate is 134.30% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.252
Alpha is -3.40% below industry average alpha yield
Alpha is 1602% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WIRE
Equity cost of capital:
0.119
Equity cost of capital is -22.88% below industry mean WACC
Unlevered (without debt) cost of capital:
10.73%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$150.15
Revenue growth rate per share of (3Y):
1.67
Annual revenue growth rate is 301.10% above the industry average
EPS:
$32.20
Expected Annual growth rate of EPS (3Y):
111.28%
Expected future EPS growth rate is 136.43% higher than the Electrical Equipment & Parts industry
Free cash flow (FCF) per share:
$21.03
Balance sheet equity growth per share: -0.93%
Equity growth rate per share is -94.51% lower than the industry
Debt per share
$0.00
EBITDA per share
$45.91
Valuation Analysis Today of
WIRE
P/E Ratio:
3.71
P/E Ratio of Competitors/Peers:
514.33
P/E ratio is -99.28% lower than main peers & is -80.09% lower than the industry
Stock price/value with industry average P/E ratio: $599.80
WIRE is -78.93% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $591.10
Present value of the expected future dividends only: $0.67
P/S (Price to Sales ratio):
0.84
Price to sales ratio is -90.86% below the industry mean
P/B (Price to book value ratio):
1.67
Price to free cash flow: 6.01
Price to free cash flow ratio is -60.09% lower than the industry
Net income growth rate (3Y):
601.07%
Net income growth rate is 49.02% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 0.06%
Dividend yeild: 0.06%
Previous Dividend: $0.02
Previous adjusted dividend: $0.02
Previous Dividend: $0.08
-
-
Average dividend payment (long-term): $0.02
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 29/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 07/01/2022
-
Dividend History:
2022-06-30--$0.02
2022-01-06--$0.02
2021-07-01--$0.02
2022-03-31--$0.02
2021-09-30--$0.02
2021-03-31--$0.02
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
14.30%
Net debt to equity ratio:
-32.28%
Debt to assets ratio:
12.51%
Net debt to assets ratio:
-28.07%
Debt-to-asset ratio is -71.92% below industry average
Ability to repay debt:
Interest coverage ratio:
4027.91
Interest coverage ratio is 78973.76% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
-
Analysis of Key Statistics
Correlation of price movement with the market:
0.601
Statistical significance of correlation:
WIRE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.569
Stock price is 5.60% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.569
Correlation of price movement with Nasdaq (^IXIC):
0.056
Covariance of price movement with the market:
0.094
Kurtosis
2.67
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.153
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WIRE
Gross Profit Margin Ratio:
143%
Operating Profit Margin Ratio:
29.72%
Operating profit margin is -165.67% lower than the industry
Net Profit Margin Ratio:
143%
Effective Tax Rate:
22.48%
Effective tax rate is 7.50% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
45.83%
Return on equity (ROE) is 355.85% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
39.86%
Return on assets (ROA) is 732.42% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
6.2
Current ratio is 61.20% above industry average
Cash Conversion Cycle (days):
58.5
Cash conversion cycle is -14.66% below industry average
The remaining useful life of property plant & equipment is: 10.6 years
Stock based compensation to net income ratio:
0.29%
In-depth Efficiency Analysis
Revenue generated per employee:
2.0M
Each employee generates 284% more revenue than industry average revenue per employee
EBITDA generated per employee:
609.8K
Each employee generates 633% more EBITDA than industry average revenue per employee
Profit generated per employee:
459.6K
Each employee generates 1069% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
59.5K
Each employee generates -359% less free cash flow than industry average revenue per employee
Assets/Capital per employee
364.6K
Each employee generates -359% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WIRE
ICF INTERNATIONAL, INC. (XNAS:ICFI)
PRIMORIS SERVICES CORPORATION (XNAS:PRIM)
CATM
CONSTRUCTION PARTNERS, INC. (XNAS:ROAD)
AIR TRANSPORT SERVICES GROUP, INC. (XNAS:ATSG)
ASTEC INDUSTRIES, INC. (XNAS:ASTE)
OMEGA FLEX, INC. (XNAS:OFLX)
TPI COMPOSITES, INC. (XNAS:TPIC)
FORTERRA, INC. (XNAS:FRTA)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.87B
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:
1.84B
1.03B
-
-
173.60M
-
-
173.60M
168.00K
218.00K
24.20M
878.09M
853.39M
661.76M
853.67M
191.91M
661.76M
Statement of Cash Flow
Date:
Period:
6.21M
Differed Income Tax :
- 3224.00K
Stock Based Compensation :
1.94M
Change in Working Capital :
- 48935.00K
Accounts Receivables:
- 58278.00K
Other Working Capital:
49.34M
Other Non-Cash Items:
186.00K
Net Cash Provided by Operating Activities:
117.71M
Investments in PP&E:
- 31972.00K
Net Acquisitions:
-
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
466.09M
-
466.09M
549.40M
116.33M
3.39M
1.14B
524.47M
-
-
-
-
539.00K
525.00M
-
1.66B
73.19M
-
49.66M
-
109.92M
183.11M
-
-
33.18M
-
216.29M
271.00K
1.58B
-
- 138550.00K
March 31, 2022 at 6:00:00 AM
2.02B
1.44B
1.66B
-
-
- 466094.0K
-
-
- 31972.00K
-
155.00K
- 58383.00K
- 403.00K
-
- 58631.00K
-
27.10M
466.09M
438.99M
117.71M
- 31972.00K
85.74M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
WIRE
2023
2024
2025
2026
2027
$137.95
$9,662.28
$10,493.85
$11,396.98
$12,377.84