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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Gates Industrial Corporation Plc (XNYS:GTES) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GTES
Name:
GATES INDUSTRIAL CORPORATION PLC (XNYS:GTES)
Sector:
- 123400.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Ivo Jurek
Total Employees:
15,050
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -0.75% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GATES INDUSTRIAL CORPORATION PLC(GTES) 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 ($) :
10.77
One Month Price Target:
$10.87
Six Month Price Target :
$11.35
Likely Price in One Year's Time:
Ticker:
$11.94
Likely Trading Range Today Under (Normal Volatility)
$10.72
Price Upper limit ($) :
$10.83
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$10.13
This week:
$9.33
This month :
$7.9
Other Primary facts
Market Cap:
2.99B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
282.29M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.44%
-21.73%
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:
$13.75
$12.39
$7.79
$9.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$11.95
Buy Put:
Sell Put:
$11.66
$9.59
$9.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GTES
Sharpe Ratio:
0.36%
Comparison:
GTES, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -81.20% lower than the industry
& is -84.37% lower than the market/S&P 500 average
Average Returns/Yield of
GTES
Daily returns:
0.02%
Weekly returns:
0.10%
Monthly returns:
0.38%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -71.60% below industry average
Classification:
GTES, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.96
Statistical test of Returns:
GTES has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.91%
Weekly Volatility:
6.51%
Monthly Volatility:
13.03%
Yearly Volatility:
45.13%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.29%
Volatility in last five trading days has been -21.25% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.96%
Weekly VaR:
-13.34%
Monthly VaR:
-26.67%
How Much Can the price of
GTES
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-92.39%
This translates to price declining to:
$8.25
This translates to price declining to:
$0.82
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
GTES is a 88.24% riskier investment compared to the market/S&P 500 & is 61.26% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.48% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GTES
Beta in relation to market/S&P 500--1.61
Expected beta in 1 year's time:
1.034
Expected beta in 3 year's time:
1.462
Unlevered (debt free) Beta:
0.848
Beta in relation to Nasdaq (XNAS):
0.844
Beta in relation to all global stocks::
0.723
Beta Comparison & Analysis
Beta of competitors/peers::
1.319
Beta is 22.46% higher than peers
Average Industry Beta:
1.281
Beta is 26.01% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.90%
Sustainable growth rate is -33.47% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.096
Alpha is -322.12% below industry average alpha yield
Alpha is -611% below the market average
Analysis of Cost of Capital of
GTES
Equity cost of capital:
0.142
Equity cost of capital is 19.14% above industry mean WACC
Unlevered (without debt) cost of capital:
7.47%
Before-tax cost of debt:
4.66%
After-tax cost of debt:
3.68%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.68%
WACC is -73.27% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.35
Revenue growth rate per share of (3Y):
0.9
Annual revenue growth rate is -155.40% below industry average
EPS:
$0.87
Expected Annual growth rate of EPS (3Y):
-25.10%
Expected future EPS growth rate is -923.05% lower than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$1.03
-
-
Debt per share
$9.51
EBITDA per share
$2.18
Valuation Analysis Today of
GTES
P/E Ratio:
14.61
P/E Ratio of Competitors/Peers:
18.75
P/E ratio is -22.07% lower than main peers & is -46.88% lower than the industry
Stock price/value with industry average P/E ratio: $23.94
GTES is -55.01% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.87
Price to sales ratio is -78.98% below the industry mean
P/B (Price to book value ratio):
0.9
Price to free cash flow: 10.46
Price to free cash flow ratio is -56.70% lower than the industry
Net income growth rate (3Y):
-49.32%
Net income growth rate is -3764.44% lower than the industry average 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:
89.65%
Net debt to equity ratio:
77.05%
Debt to assets ratio:
36.29%
Net debt to assets ratio:
31.19%
Debt-to-asset ratio is -32.74% below industry average
Ability to repay debt:
Interest coverage ratio:
4.86
Interest coverage ratio is -75.11% less than industry average
Looking forward:
Debt growth rate:
-8.48%
Annual debt growth is -111% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.20%
Analysis of Key Statistics
Correlation of price movement with the market:
0.616
Statistical significance of correlation:
GTES has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is -3.08% 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):
0.002
Covariance of price movement with the market:
0.003
Kurtosis
7.305
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:
-0.114
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GTES
Gross Profit Margin Ratio:
149%
Operating Profit Margin Ratio:
12.16%
Operating profit margin is -150.22% lower than the industry
Net Profit Margin Ratio:
149%
Effective Tax Rate:
-0.80%
Effective tax rate is -104.26% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.98%
Return on equity (ROE) is 167.30% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.64%
Return on assets (ROA) is -22.54% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
2.8
Current ratio is -7.36% below industry average
Cash Conversion Cycle (days):
16.6
Cash conversion cycle is -72.98% below industry average
The remaining useful life of property plant & equipment is: 0.9 years
Stock based compensation to net income ratio:
8.96%
In-depth Efficiency Analysis
Revenue generated per employee:
231.6K
Each employee generates -94% less revenue than industry average revenue per employee
EBITDA generated per employee:
40.8K
Each employee generates -94% less EBITDA than industry average revenue per employee
Profit generated per employee:
17.9K
Each employee generates -95% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 8.2K
Each employee generates -116% less free cash flow than industry average revenue per employee
Assets/Capital per employee
345.0K
Each employee generates -116% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GTES
JOHN BEAN TECHNOLOGIES CORPORATION (XNYS:JBT)
MAXIMUS, INC. (XNYS:MMS)
MSC INDUSTRIAL DIRECT CO., INC. (XNYS:MSM)
COLFAX UNT (XNYS:CFXA)
HERC HOLDINGS INC. (XNYS:HRI)
SCHNEIDER NATIONAL, INC. (XNYS:SNDR)
HEXCEL CORPORATION (XNYS:HXL)
SPIRIT AEROSYSTEMS HOLDINGS, INC. (XNYS:SPR)
BWX TECHNOLOGIES, INC. (XNYS:BWXT)
Current Analyst Ratings
Strong buy�4%
Buy�29%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
3.49B
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:
2.19B
1.30B
-
214.20M
875.80M
-
- 9800.00K
866.00M
2.20M
126.50M
221.30M
614.50M
423.90M
269.00M
288.70M
- 2300.00K
269.00M
Statement of Cash Flow
Date:
Period:
55.10M
Differed Income Tax :
- 12300.00K
Stock Based Compensation :
24.10M
Change in Working Capital :
- 217300.00K
Accounts Receivables:
- 88400.00K
Other Working Capital:
-
Other Non-Cash Items:
7.70M
Net Cash Provided by Operating Activities:
- 105400.00K
Investments in PP&E:
- 17400.00K
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):
4/2/22
2022
Q1
406.80M
-
406.80M
823.50M
718.30M
258.00M
2.21B
787.80M
2.05B
1.60B
-
610.00M
141.30M
5.19B
-
7.40B
494.50M
29.40M
27.10M
-
264.60M
788.50M
2.69B
281.60M
3.23B
-
4.02B
2.90M
1.41B
- 805400.0K
-
April 2, 2022 at 6:00:00 AM
3.05B
3.00B
7.02B
-
2.71B
2.3B
-
- 7600.00K
- 25000.00K
- 5300.00K
200.00K
- 175200.00K
-
64.50M
- 115800.00K
- 4700.00K
- 250900.00K
410.00M
660.90M
- 105400.00K
- 18000.00K
- 123400.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GTES
2023
2024
2025
2026
2027
$12.90
$14.30
$15.85
$17.57
$19.48