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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Innospec Inc. (XNAS:IOSP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IOSP
Name:
INNOSPEC INC. (XNAS:IOSP)
Sector:
- 37400.00K
Industry:
Specialty Chemicals
CEO:
Mr. Patrick Williams
Total Employees:
1,900
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -72.63% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF INNOSPEC INC.(IOSP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
89.37
One Month Price Target:
$89.94
Six Month Price Target :
$92.78
Likely Price in One Year's Time:
Ticker:
$96.2
Likely Trading Range Today Under (Normal Volatility)
$88.99
Price Upper limit ($) :
$89.78
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$84.65
This week:
$78.82
This month :
$68.26
Other Primary facts
Market Cap:
2.17B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
24.79M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.86%
-17.11%
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:
$111.28
$101.28
$67.46
$77.46
Medium risk (<10%) entry points
Buy Call
Sell Call
$98.03
Buy Put:
Sell Put:
$95.90
$80.68
$82.84
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IOSP
Sharpe Ratio:
0.38%
Comparison:
IOSP, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -81.90% lower than the industry
& is -83.18% lower than the market/S&P 500 average
Average Returns/Yield of
IOSP
Daily returns:
0.02%
Weekly returns:
0.09%
Monthly returns:
0.37%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -81.69% below industry average
Classification:
IOSP, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.6
Statistical test of Returns:
IOSP has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.58%
Weekly Volatility:
5.77%
Monthly Volatility:
11.54%
Yearly Volatility:
39.98%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.45%
Volatility in last five trading days has been -43.83% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.28%
Weekly VaR:
-11.81%
Monthly VaR:
-23.62%
How Much Can the price of
IOSP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-81.82%
This translates to price declining to:
$70.89
This translates to price declining to:
$16.24
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
IOSP is a 66.71% riskier investment compared to the market/S&P 500 & is 42.82% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.22% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IOSP
Beta in relation to market/S&P 500--1.14
Expected beta in 1 year's time:
0.78
Expected beta in 3 year's time:
1.103
Unlevered (debt free) Beta:
1.116
Beta in relation to Nasdaq (XNAS):
0.648
Beta in relation to all global stocks::
0.914
Beta Comparison & Analysis
Beta of competitors/peers::
1.595
Beta is -28.74% lower than peers
Average Industry Beta:
1.164
Beta is -2.39% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.55%
Sustainable growth rate is -77.33% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.064
Alpha is -147.88% below industry average alpha yield
Alpha is -410% below the market average
Analysis of Cost of Capital of
IOSP
Equity cost of capital:
0.109
Equity cost of capital is -1.71% below industry mean WACC
Unlevered (without debt) cost of capital:
10.74%
Before-tax cost of debt:
3.54%
After-tax cost of debt:
2.79%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.79%
WACC is 28.38% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$65.19
Revenue growth rate per share of (3Y):
2.07
Annual revenue growth rate is -133.20% below industry average
EPS:
$4.27
Expected Annual growth rate of EPS (3Y):
-6.45%
Expected future EPS growth rate is -811.19% lower than the Specialty Chemicals industry
Free cash flow (FCF) per share:
$0.17
Balance sheet equity growth per share: 31.39%
Equity growth rate per share is 200.28% higher than the industry
Debt per share
$1.14
EBITDA per share
$7.91
Valuation Analysis Today of
IOSP
P/E Ratio:
19.17
P/E Ratio of Competitors/Peers:
82.81
P/E ratio is -76.85% lower than main peers & is -48.81% lower than the industry
Stock price/value with industry average P/E ratio: $159.95
IOSP is -44.13% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $59.27
Present value of the expected future dividends only: $34.54
P/S (Price to Sales ratio):
1.37
Price to sales ratio is -50.32% below the industry mean
P/B (Price to book value ratio):
2.07
Price to free cash flow: 515.73
Price to free cash flow ratio is 19.98% higher than the industry
Net income growth rate (3Y):
8.44%
Net income growth rate is -115.26% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 2.58%
Previous Dividend: $0.63
Previous adjusted dividend: $0.63
Previous Dividend: $2.31
Expected next dividend best case: $0.69
Expected next dividend worst case: $0.57
Average dividend payment (long-term): $0.56
Average dividend increase/decrease (growth rate) % per period: 3.98%
Expected next dividend payment date: 24/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 28/07/2022
Previous dividend payment date: 26/05/2022
Previous dividend record date: 17/05/2022
Previous dividend declaration date: 29/04/2022
Dividend History:
2022-05-16--$0.63
2021-05-14--$0.57
2020-05-15--$0.52
2021-11-15--$0.59
2020-11-16--$0.52
2019-11-18--$0.52
Dividend growth rate is -80.62% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
2.65%
Net debt to equity ratio:
-5.92%
Debt to assets ratio:
1.74%
Net debt to assets ratio:
-3.89%
Debt-to-asset ratio is -96.78% below industry average
Ability to repay debt:
Interest coverage ratio:
130.8
Interest coverage ratio is 522.05% more than industry average
Looking forward:
Debt growth rate:
-12.75%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.35%
Analysis of Key Statistics
Correlation of price movement with the market:
0.576
Statistical significance of correlation:
IOSP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is -0.66% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.58
Correlation of price movement with Nasdaq (^IXIC):
0.017
Covariance of price movement with the market:
0.026
Kurtosis
9.773
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:
0.091
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IOSP
Gross Profit Margin Ratio:
117%
Operating Profit Margin Ratio:
9.17%
Operating profit margin is -103.26% lower than the industry
Net Profit Margin Ratio:
117%
Effective Tax Rate:
30.04%
Effective tax rate is 67.29% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.94%
Return on equity (ROE) is -65.41% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.54%
Return on assets (ROA) is 149.05% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
2.21
Current ratio is -17.56% below industry average
Cash Conversion Cycle (days):
42.1
Cash conversion cycle is -31.72% below industry average
The remaining useful life of property plant & equipment is: 11.9 years
Stock based compensation to net income ratio:
1.60%
In-depth Efficiency Analysis
Revenue generated per employee:
850.6K
Each employee generates 14% more revenue than industry average revenue per employee
EBITDA generated per employee:
103.3K
Each employee generates 4% more EBITDA than industry average revenue per employee
Profit generated per employee:
55.9K
Each employee generates 76% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 19.7K
Each employee generates -47% less free cash flow than industry average revenue per employee
Assets/Capital per employee
444.8K
Each employee generates -47% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 21.04%
Growth rate in R&D investment/expenditure is 101.20% higher than the industry
Competitors/Peer firms of
IOSP
KAISER ALUMINUM CORPORATION (XNAS:KALU)
METHANEX CORPORATION (XNAS:MEOH)
WD-40 COMPANY (XNAS:WDFC)
AMYRIS, INC. (XNAS:AMRS)
Green Plains Inc. (XNAS:GPRE)
CENTURY ALUMINUM COMPANY (XNAS:CENX)
SSR Mining Inc. (XNAS:SSRM)
Largo Inc. (XNAS:LGO)
GEVO, INC. (XNAS:GEVO)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.62B
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:
1.14B
473.40M
38.50M
-
288.50M
-
-
327.00M
-
1.50M
42.90M
196.20M
148.20M
106.20M
151.80M
45.60M
106.20M
Statement of Cash Flow
Date:
Period:
10.50M
Differed Income Tax :
900.00K
Stock Based Compensation :
1.70M
Change in Working Capital :
- 77900.00K
Accounts Receivables:
-
Other Working Capital:
- 2000.00K
Other Non-Cash Items:
- 700.00K
Net Cash Provided by Operating Activities:
- 29000.00K
Investments in PP&E:
-
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
105.60M
-
105.60M
337.70M
308.20M
27.10M
778.60M
256.00M
362.00M
53.00M
-
6.20M
168.00M
845.20M
-
1.62B
161.80M
14.10M
13.70M
-
176.40M
352.30M
28.30M
113.00M
202.60M
-
554.90M
300.00K
859.40M
- 50500.0K
-
March 31, 2022 at 6:00:00 AM
1.47B
1.07B
1.62B
-
42.40M
- 63200.0K
-
- 8400.00K
- 8400.00K
- 100.00K
1.90M
- 900.00K
-
-
900.00K
300.00K
- 36200.00K
105.60M
141.80M
- 29000.00K
- 8400.00K
- 37400.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
IOSP
2023
2024
2025
2026
2027
$96.68
$174.34
$187.66
$201.99
$217.42