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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Graco Inc (XNYS:GGG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GGG
Name:
GRACO INC (XNYS:GGG)
Sector:
- 15768.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Patrick McHale
Total Employees:
3,800
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -12.39% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GRACO INC(GGG) 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 ($) :
63.43
One Month Price Target:
$63.7
Six Month Price Target :
$65.08
Likely Price in One Year's Time:
Ticker:
$66.73
Likely Trading Range Today Under (Normal Volatility)
$63.26
Price Upper limit ($) :
$63.67
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$60.95
This week:
$57.89
This month :
$52.35
Other Primary facts
Market Cap:
10.74B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
169.12M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.61%
-10.66%
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:
$74.92
$69.62
$51.94
$57.24
Medium risk (<10%) entry points
Buy Call
Sell Call
$67.89
Buy Put:
Sell Put:
$66.76
$58.95
$60.10
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GGG
Sharpe Ratio:
2.31%
Comparison:
GGG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 21.97% higher than the industry
& ratio is 1.39% higher than the market/S&P 500 average
Average Returns/Yield of
GGG
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.07%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -21.15% below industry average
Classification:
GGG, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.22
Statistical test of Returns:
GGG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.93%
Weekly Volatility:
4.31%
Monthly Volatility:
8.62%
Yearly Volatility:
29.85%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.61%
Volatility in last five trading days has been -68.23% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.90%
Weekly VaR:
-8.73%
Monthly VaR:
-17.46%
How Much Can the price of
GGG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-60.49%
This translates to price declining to:
$54.02
This translates to price declining to:
$25.06
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
GGG is a 23.24% riskier investment compared to the market/S&P 500 & is 5.58% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -29.56% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GGG
Beta in relation to market/S&P 500--0.77
Expected beta in 1 year's time:
0.614
Expected beta in 3 year's time:
0.869
Unlevered (debt free) Beta:
0.737
Beta in relation to Nasdaq (XNAS):
0.74
Beta in relation to all global stocks::
0.754
Beta Comparison & Analysis
Beta of competitors/peers::
1.108
Beta is -30.16% lower than peers
Average Industry Beta:
1.281
Beta is -39.60% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
20.10%
Sustainable growth rate is 35.02% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.044
Alpha is 0.91% above industry average alpha yield
Alpha is 278% higher than market/& is unsustainably high
Analysis of Cost of Capital of
GGG
Equity cost of capital:
0.085
Equity cost of capital is -29.14% below industry mean WACC
Unlevered (without debt) cost of capital:
8.05%
Before-tax cost of debt:
8.79%
After-tax cost of debt:
6.94%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
6.94%
WACC is -78.42% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.99
Revenue growth rate per share of (3Y):
6.35
Annual revenue growth rate is -9.67% below industry average
EPS:
$2.49
Expected Annual growth rate of EPS (3Y):
6.95%
Expected future EPS growth rate is 127.86% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$1.33
Balance sheet equity growth per share: 40.99%
Equity growth rate per share is 279.73% higher than the industry
Debt per share
$0.59
EBITDA per share
$3.42
Valuation Analysis Today of
GGG
P/E Ratio:
24.99
P/E Ratio of Competitors/Peers:
16.97
P/E ratio is 47.23% higher than main peers & is -9.19% lower than the industry
Stock price/value with industry average P/E ratio: $68.51
GGG is -7.42% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.29
Price to sales ratio is 27.49% above the industry mean
P/B (Price to book value ratio):
6.35
Price to free cash flow: 47.63
Price to free cash flow ratio is 37.73% higher than the industry
Net income growth rate (3Y):
27.10%
Net income growth rate is 1913.12% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 8.23%
Dividend yeild: 0.96%
Previous Dividend: $0.21
Previous adjusted dividend: $0.21
Previous Dividend: $0.61
Expected next dividend best case: $0.22
Expected next dividend worst case: $0.20
Average dividend payment (long-term): $0.19
Average dividend increase/decrease (growth rate) % per period: 1929811.25%
Expected next dividend payment date: 08/02/2022
Expected next dividend record date: 18/07/2022
Expected next dividend declaration date: 19/05/2022
Previous dividend payment date: 05/04/2022
Previous dividend record date: 18/04/2022
Previous dividend declaration date: 18/02/2022
Dividend History:
2022-04-17--$0.21
2022-01-14--$0.21
2021-07-16--$0.19
2022-04-14--$0.21
2021-10-15--$0.19
2021-04-16--$0.19
Dividend growth rate is 55343362.96% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
5.87%
Net debt to equity ratio:
-13.71%
Debt to assets ratio:
4.28%
Net debt to assets ratio:
-9.99%
Debt-to-asset ratio is -92.07% below industry average
Ability to repay debt:
Interest coverage ratio:
44.29
Interest coverage ratio is 126.97% more than industry average
Looking forward:
Debt growth rate:
6.36%
Annual debt growth is -91% lower than industry average debt growth rate
Debt repayment rate in last quarter: 43.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.788
Statistical significance of correlation:
GGG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is 23.97% more 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
10.044
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:
0.378
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GGG
Gross Profit Margin Ratio:
205%
Operating Profit Margin Ratio:
26.21%
Operating profit margin is -208.22% lower than the industry
Net Profit Margin Ratio:
205%
Effective Tax Rate:
13.97%
Effective tax rate is -25.25% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.74%
Return on equity (ROE) is 665.97% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
18.76%
Return on assets (ROA) is 299.63% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
2.98
Current ratio is -1.49% below industry average
Cash Conversion Cycle (days):
65.8
Cash conversion cycle is 6.84% above industry average
The remaining useful life of property plant & equipment is: 3.5 years
Stock based compensation to net income ratio:
1.63%
In-depth Efficiency Analysis
Revenue generated per employee:
533.6K
Each employee generates -86% less revenue than industry average revenue per employee
EBITDA generated per employee:
152.4K
Each employee generates -79% less EBITDA than industry average revenue per employee
Profit generated per employee:
114.5K
Each employee generates -71% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 4.1K
Each employee generates -108% less free cash flow than industry average revenue per employee
Assets/Capital per employee
295.3K
Each employee generates -108% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 10.33%
Growth rate in R&D investment/expenditure is -4.31% lower than the industry
Competitors/Peer firms of
GGG
A. O. SMITH CORPORATION (XNYS:AOS)
TREX COMPANY, INC. (XNYS:TREX)
China Eastern Airlines Corporation Limited (XNYS:CEA)
ROBERT HALF INTERNATIONAL INC. (XNYS:RHI)
GFL ENVIRONMENTAL INC. (XNYS:GFL)
SNAP-ON INCORPORATED (XNYS:SNA)
BOOZ ALLEN HAMILTON HOLDING CORPORATION (XNYS:BAH)
WATSCO, INC. (XNYS:WSO)
HOWMET AEROSPACE INC. (XNYS:HWM)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�50%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
2.03B
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:
986.67M
1.04B
79.16M
158.24M
430.53M
272.29M
-
509.69M
-
13.07M
60.38M
579.11M
531.40M
435.02M
505.65M
70.63M
435.02M
Statement of Cash Flow
Date:
Period:
15.57M
Differed Income Tax :
10.97M
Stock Based Compensation :
7.09M
Change in Working Capital :
- 103149.00K
Accounts Receivables:
- 14296.00K
Other Working Capital:
- 1059.00K
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
31.33M
Investments in PP&E:
- 47093.00K
Net Acquisitions:
- 25016.00K
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):
4/1/22
2022
Q1
380.49M
-
380.49M
339.41M
436.74M
40.59M
1.20B
519.03M
371.40M
154.01M
-
42.20M
35.59M
1.12B
-
2.32B
88.11M
49.61M
12.48M
66.67M
197.93M
402.31M
99.21M
117.47M
226.88M
-
629.19M
169.22M
841.50M
- 82429.0K
-
April 1, 2022 at 6:00:00 AM
1.50B
1.69B
2.32B
-
148.82M
- 231669.0K
-
- 134.00K
- 72243.00K
- 75000.00K
21.29M
- 108706.00K
- 35801.00K
- 4639.00K
- 202852.00K
- 45.00K
- 243815.00K
380.49M
624.30M
31.33M
- 47093.00K
- 15768.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
GGG
2023
2024
2025
2026
2027
$69.64
$73.26
$77.07
$81.08
$85.30