_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Franklin Electric Co., Inc. (XNAS:FELE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FELE
Name:
FRANKLIN ELECTRIC CO., INC. (XNAS:FELE)
Sector:
- 70767.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Gregg Sengstack
Total Employees:
6,400
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -16.14% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FRANKLIN ELECTRIC CO., INC.(FELE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
85.79
One Month Price Target:
$86.3
Six Month Price Target :
$88.83
Likely Price in One Year's Time:
Ticker:
$91.87
Likely Trading Range Today Under (Normal Volatility)
$85.51
Price Upper limit ($) :
$86.23
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$81.53
This week:
$76.27
This month :
$66.75
Other Primary facts
Market Cap:
3.96B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
46.29M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.67%
-14.68%
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:
$105.53
$96.38
$66.05
$75.20
Medium risk (<10%) entry points
Buy Call
Sell Call
$93.41
Buy Put:
Sell Put:
$91.45
$78.15
$80.13
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FELE
Sharpe Ratio:
3.30%
Comparison:
FELE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 74.24% higher than the industry
& ratio is 44.84% higher than the market/S&P 500 average
Average Returns/Yield of
FELE
Daily returns:
0.09%
Weekly returns:
0.45%
Monthly returns:
1.80%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 33.05% above industry average
Classification:
FELE, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.42
Statistical test of Returns:
FELE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.46%
Weekly Volatility:
5.50%
Monthly Volatility:
11.00%
Yearly Volatility:
38.12%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.57%
Volatility in last five trading days has been -76.73% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.96%
Weekly VaR:
-11.10%
Monthly VaR:
-22.20%
How Much Can the price of
FELE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-76.89%
This translates to price declining to:
$69.84
This translates to price declining to:
$19.83
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FELE is a 56.65% riskier investment compared to the market/S&P 500 & is 34.20% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.07% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FELE
Beta in relation to market/S&P 500--1.05
Expected beta in 1 year's time:
0.723
Expected beta in 3 year's time:
1.022
Unlevered (debt free) Beta:
0.957
Beta in relation to Nasdaq (XNAS):
0.549
Beta in relation to all global stocks::
0.757
Beta Comparison & Analysis
Beta of competitors/peers::
1.359
Beta is -22.45% lower than peers
Average Industry Beta:
1.281
Beta is -17.73% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.40%
Sustainable growth rate is -16.74% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.112
Alpha is 160.31% above industry average alpha yield
Alpha is 716% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FELE
Equity cost of capital:
0.104
Equity cost of capital is -13.05% below industry mean WACC
Unlevered (without debt) cost of capital:
9.42%
Before-tax cost of debt:
1.69%
After-tax cost of debt:
1.34%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.34%
WACC is -77.80% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$38.46
Revenue growth rate per share of (3Y):
4.12
Annual revenue growth rate is 40.90% above the industry average
EPS:
$3.29
Expected Annual growth rate of EPS (3Y):
16.79%
Expected future EPS growth rate is 450.64% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$0.65
Balance sheet equity growth per share: 48.62%
Equity growth rate per share is 350.41% higher than the industry
Debt per share
$2.62
EBITDA per share
$5.32
Valuation Analysis Today of
FELE
P/E Ratio:
23.01
P/E Ratio of Competitors/Peers:
111.97
P/E ratio is -79.45% lower than main peers & is -16.37% lower than the industry
Stock price/value with industry average P/E ratio: $90.52
FELE is -5.23% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $40.28
Present value of the expected future dividends only: $10.52
P/S (Price to Sales ratio):
2.23
Price to sales ratio is -46.24% below the industry mean
P/B (Price to book value ratio):
4.12
Price to free cash flow: 132.44
Price to free cash flow ratio is 0.73% higher than the industry
Net income growth rate (3Y):
46.22%
Net income growth rate is 3334.02% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 5.86%
Dividend yeild: 0.86%
Previous Dividend: $0.20
Previous adjusted dividend: $0.20
Previous Dividend: $0.74
Expected next dividend best case: $0.21
Expected next dividend worst case: $0.18
Average dividend payment (long-term): $0.17
Average dividend increase/decrease (growth rate) % per period: 3.12%
Expected next dividend payment date: 17/08/2022
Expected next dividend record date: 08/03/2022
Expected next dividend declaration date: 25/07/2022
Previous dividend payment date: 19/05/2022
Previous dividend record date: 05/05/2022
Previous dividend declaration date: 25/04/2022
Dividend History:
2022-05-04--$0.20
2021-11-03--$0.18
2021-05-05--$0.18
2022-02-02--$0.20
2021-08-04--$0.18
2021-02-03--$0.18
Dividend growth rate is -10.52% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
12.59%
Net debt to equity ratio:
30.42%
Debt to assets ratio:
7.19%
Net debt to assets ratio:
17.38%
Debt-to-asset ratio is -86.67% below industry average
Ability to repay debt:
Interest coverage ratio:
43.95
Interest coverage ratio is 125.22% more than industry average
Looking forward:
Debt growth rate:
87.21%
Annual debt growth is 17% higher than industry average debt growth rate
Debt repayment rate in last quarter: 45.65%
Analysis of Key Statistics
Correlation of price movement with the market:
0.514
Statistical significance of correlation:
FELE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is -19.05% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.011
Kurtosis
9.659
Returns have a significant 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:
0.207
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FELE
Gross Profit Margin Ratio:
136%
Operating Profit Margin Ratio:
10.97%
Operating profit margin is -145.31% lower than the industry
Net Profit Margin Ratio:
136%
Effective Tax Rate:
19.38%
Effective tax rate is 3.69% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.19%
Return on equity (ROE) is 381.98% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.25%
Return on assets (ROA) is 97.16% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
1.7
Current ratio is -43.87% below industry average
Cash Conversion Cycle (days):
25
Cash conversion cycle is -59.39% below industry average
The remaining useful life of property plant & equipment is: 15.1 years
Stock based compensation to net income ratio:
2.56%
In-depth Efficiency Analysis
Revenue generated per employee:
278.2K
Each employee generates -93% less revenue than industry average revenue per employee
EBITDA generated per employee:
38.5K
Each employee generates -95% less EBITDA than industry average revenue per employee
Profit generated per employee:
24.3K
Each employee generates -94% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.1K
Each employee generates -122% less free cash flow than industry average revenue per employee
Assets/Capital per employee
132.7K
Each employee generates -122% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FELE
RENT-A-CENTER, INC. (XNAS:RCII)
BEACON ROOFING SUPPLY, INC. (XNAS:BECN)
KORNIT DIGITAL LTD (XNAS:KRNT)
ALLEGIANT TRAVEL COMPANY (XNAS:ALGT)
FRONTIER GROUP HOLDINGS, INC. (XNAS:ULCC)
MERCURY SYSTEMS, INC. (XNAS:MRCY)
BALLARD POWER SYSTEMS INC. (XNAS:BLDP)
CASELLA WASTE SYSTEMS, INC. (XNAS:CWST)
AAON, INC. (XNAS:AAON)
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.78B
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:
1.17B
605.88M
-
-
409.35M
-
-
409.35M
-
5.60M
47.08M
246.14M
195.34M
155.75M
194.65M
37.72M
155.75M
Statement of Cash Flow
Date:
Period:
12.08M
Differed Income Tax :
1.27M
Stock Based Compensation :
3.99M
Change in Working Capital :
- 114147.00K
Accounts Receivables:
-
Other Working Capital:
- 2585.00K
Other Non-Cash Items:
5.39M
Net Cash Provided by Operating Activities:
- 61311.00K
Investments in PP&E:
- 9456.00K
Net Acquisitions:
553.00K
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
38.58M
-
38.58M
229.74M
527.87M
37.40M
833.59M
260.65M
329.39M
247.10M
-
7.68M
4.77M
849.58M
1.70B
1.68B
190.49M
210.03M
3.77M
-
91.07M
491.59M
121.07M
76.54M
227.44M
-
719.02M
4.64M
861.16M
- 219019.0K
-
March 31, 2022 at 6:00:00 AM
1.58B
961.71M
1.68B
-
331.11M
292.5M
-
-
- 8903.00K
- 101705.00K
343.00K
- 19319.00K
- 9130.00K
198.56M
68.75M
- 486.00K
- 1955.00K
38.58M
40.54M
- 61311.00K
- 9456.00K
- 70767.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
FELE
2023
2024
2025
2026
2027
$92.33
$200.34
$214.53
$229.73
$246.00