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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ingersoll Rand Inc. (XNYS:IR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IR
Name:
INGERSOLL RAND INC. (XNYS:IR)
Sector:
28.10M
Industry:
Specialty Industrial Machinery
CEO:
Mr. Vicente Reynal
Total Employees:
16,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 31.69% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF INGERSOLL RAND INC.(IR) 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 ($) :
47.74
One Month Price Target:
$48.14
Six Month Price Target :
$50.11
Likely Price in One Year's Time:
Ticker:
$52.48
Likely Trading Range Today Under (Normal Volatility)
$47.58
Price Upper limit ($) :
$47.98
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$45.34
This week:
$42.37
This month :
$37.01
Other Primary facts
Market Cap:
19.22B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
403.18M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.92%
-16.05%
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:
$58.87
$53.72
$36.61
$41.76
Medium risk (<10%) entry points
Buy Call
Sell Call
$52.05
Buy Put:
Sell Put:
$50.95
$43.42
$44.53
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IR
Sharpe Ratio:
2.83%
Comparison:
IR, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 49.51% higher than the industry
& ratio is 24.29% higher than the market/S&P 500 average
Average Returns/Yield of
IR
Daily returns:
0.08%
Weekly returns:
0.40%
Monthly returns:
1.59%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 17.08% above industry average
Classification:
IR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.34
Statistical test of Returns:
IR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.49%
Weekly Volatility:
5.56%
Monthly Volatility:
11.12%
Yearly Volatility:
38.51%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.51%
Volatility in last five trading days has been -39.15% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.03%
Weekly VaR:
-11.24%
Monthly VaR:
-22.48%
How Much Can the price of
IR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.86%
This translates to price declining to:
$38.69
This translates to price declining to:
$10.57
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
IR is a 58.64% riskier investment compared to the market/S&P 500 & is 35.91% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -9.14% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IR
Beta in relation to market/S&P 500--1.48
Expected beta in 1 year's time:
0.904
Expected beta in 3 year's time:
1.279
Unlevered (debt free) Beta:
-
Beta in relation to Nasdaq (XNAS):
0.808
Beta in relation to all global stocks::
0.738
Beta Comparison & Analysis
Beta of competitors/peers::
1.133
Beta is 30.44% higher than peers
Average Industry Beta:
1.281
Beta is 15.34% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.59%
Sustainable growth rate is -69.19% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.058
Alpha is 33.09% above industry average alpha yield
Alpha is 366% higher than market/& is unsustainably high
Analysis of Cost of Capital of
IR
Equity cost of capital:
0.133
Equity cost of capital is 11.29% above industry mean WACC
Unlevered (without debt) cost of capital:
-
Before-tax cost of debt:
2.42%
After-tax cost of debt:
1.91%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.91%
WACC is -72.41% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$13.29
Revenue growth rate per share of (3Y):
2.12
Annual revenue growth rate is -132.25% below industry average
EPS:
$1.81
Expected Annual growth rate of EPS (3Y):
16.71%
Expected future EPS growth rate is 447.92% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$1.15
-
-
Debt per share
$8.37
EBITDA per share
$3.10
Valuation Analysis Today of
IR
P/E Ratio:
36.87
P/E Ratio of Competitors/Peers:
28.13
P/E ratio is 31.05% higher than main peers & is 34.00% higher than the industry
Stock price/value with industry average P/E ratio: $49.80
IR is -4.14% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $6.14
Present value of the expected future dividends only: $1.46
P/S (Price to Sales ratio):
3.59
Price to sales ratio is -13.46% below the industry mean
P/B (Price to book value ratio):
2.12
Price to free cash flow: 41.42
Price to free cash flow ratio is 4.67% higher than the industry
Net income growth rate (3Y):
1.81%
Net income growth rate is 34.71% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 1.08%
Dividend yeild: 1.24%
Previous Dividend: $0.02
Previous adjusted dividend: $0.02
Previous Dividend: $0.59
Expected next dividend best case: $0.40
Expected next dividend worst case: -$0.36
Average dividend payment (long-term): $0.28
Average dividend increase/decrease (growth rate) % per period: -19.25%
Expected next dividend payment date: 20/09/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 22/06/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 05/03/2022
Dividend History:
2022-05-19--$0.02
2021-11-09--$0.02
2020-03-12--$0.53
2022-03-08--$0.02
2020-06-04--$0.53
2019-12-05--$0.53
Dividend growth rate is -652.05% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
37.54%
Net debt to equity ratio:
16.24%
Debt to assets ratio:
22.35%
Net debt to assets ratio:
9.67%
Debt-to-asset ratio is -58.58% below industry average
Ability to repay debt:
Interest coverage ratio:
14.97
Interest coverage ratio is -23.27% less than industry average
Looking forward:
Debt growth rate:
-12.17%
Annual debt growth is -116% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.28%
Analysis of Key Statistics
Correlation of price movement with the market:
0.697
Statistical significance of correlation:
IR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is 9.75% 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):
0.009
Covariance of price movement with the market:
0.013
Kurtosis
6.598
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:
-0.338
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IR
Gross Profit Margin Ratio:
154%
Operating Profit Margin Ratio:
11.22%
Operating profit margin is -146.33% lower than the industry
Net Profit Margin Ratio:
154%
Effective Tax Rate:
-
-
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.41%
Return on equity (ROE) is 150.41% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.01%
Return on assets (ROA) is 6.73% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
2.88
Current ratio is -4.67% below industry average
Cash Conversion Cycle (days):
14
Cash conversion cycle is -77.30% below industry average
The remaining useful life of property plant & equipment is: 3.2 years
Stock based compensation to net income ratio:
2.62%
In-depth Efficiency Analysis
Revenue generated per employee:
335.0K
Each employee generates -91% less revenue than industry average revenue per employee
EBITDA generated per employee:
78.2K
Each employee generates -89% less EBITDA than industry average revenue per employee
Profit generated per employee:
47.3K
Each employee generates -88% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.8K
Each employee generates -97% less free cash flow than industry average revenue per employee
Assets/Capital per employee
682.4K
Each employee generates -97% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
IR
UNITED RENTALS, INC. (XNYS:URI)
ZTO EXPRESS (CAYMAN) INC. (XNYS:ZTO)
W.W. GRAINGER, INC. (XNYS:GWW)
CNH Industrial NV (XNYS:CNHI)
DELTA AIR LINES, INC. (XNYS:DAL)
KANSAS CITY SOUTHERN (XMEX:KSU*)
SOUTHWEST AIRLINES CO. (XNYS:LUV)
TRANSUNION (XNYS:TRU)
XYLEM INC. (XNYS:XYL)
Current Analyst Ratings
Strong buy�21%
Buy�8%
Hold�58%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.36B
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:
3.30B
2.06B
-
-
1.04B
265.50M
338.80M
1.38B
-
83.60M
411.60M
1.25B
601.40M
756.60M
554.90M
-
756.60M
Statement of Cash Flow
Date:
Period:
108.50M
Differed Income Tax :
-
Stock Based Compensation :
19.80M
Change in Working Capital :
- 188800.00K
Accounts Receivables:
-
Other Working Capital:
- 24900.00K
Other Non-Cash Items:
600.00K
Net Cash Provided by Operating Activities:
46.00M
Investments in PP&E:
-
Net Acquisitions:
- 30300.00K
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
1.99B
-
1.99B
1.01B
954.90M
227.00M
4.19B
635.20M
5.98B
3.82B
-
19.40M
466.50M
10.92B
-
15.10B
701.40M
75.30M
40.20M
265.20M
411.70M
1.45B
3.38B
504.30M
4.59B
-
6.04B
4.30M
474.10M
- 71500.0K
-
March 31, 2022 at 6:00:00 AM
4.68B
8.99B
15.03B
-
3.45B
1.5B
-
- 17900.00K
- 48200.00K
- 9600.00K
-
- 101100.00K
- 8200.00K
2.80M
- 116100.00K
- 1100.00K
- 119400.00K
1.99B
2.11B
46.00M
- 17900.00K
28.10M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
IR
2023
2024
2025
2026
2027
$67.13
$73.80
$81.12
$89.18
$98.04