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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Insteel Industries, Inc. (XNYS:IIIN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
IIIN
Name:
INSTEEL INDUSTRIES, INC. (XNYS:IIIN)
Sector:
12.79M
Industry:
Metal Fabrication
CEO:
Mr. H. Woltz
Total Employees:
913
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF INSTEEL INDUSTRIES, INC.(IIIN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND METAL FABRICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
28.05
One Month Price Target:
$28.24
Six Month Price Target :
$29.2
Likely Price in One Year's Time:
Ticker:
$30.36
Likely Trading Range Today Under (Normal Volatility)
$27.91
Price Upper limit ($) :
$28.24
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$26.11
This week:
$23.7
This month :
$19.36
Other Primary facts
Market Cap:
537.97M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
19.51M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.59%
-19.16%
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:
$37.07
$32.91
$19.03
$23.19
Medium risk (<10%) entry points
Buy Call
Sell Call
$31.56
Buy Put:
Sell Put:
$30.67
$24.53
$25.43
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
IIIN
Sharpe Ratio:
2.40%
Comparison:
IIIN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 25.16% higher than the industry
& ratio is 5.41% higher than the market/S&P 500 average
Average Returns/Yield of
IIIN
Daily returns:
0.09%
Weekly returns:
0.46%
Monthly returns:
1.82%
Yearly returns:
17.56%
Comparison of returns:
Average annual returns/yield (last 3 years) is 24.36% above industry average
Classification:
IIIN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.29
Statistical test of Returns:
IIIN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.42%
Weekly Volatility:
7.65%
Monthly Volatility:
15.29%
Yearly Volatility:
52.97%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.18%
Volatility in last five trading days has been -65.49% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.93%
Weekly VaR:
-15.50%
Monthly VaR:
-31.00%
How Much Can the price of
IIIN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$20.65
This translates to price declining to:
$4.21
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
IIIN is a 118.78% riskier investment compared to the market/S&P 500 & is 87.43% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.74% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
IIIN
Beta in relation to market/S&P 500--1.22
Expected beta in 1 year's time:
0.781
Expected beta in 3 year's time:
1.105
Unlevered (debt free) Beta:
1.222
Beta in relation to Nasdaq (XNAS):
0.919
Beta in relation to all global stocks::
0.947
Beta Comparison & Analysis
Beta of competitors/peers::
1.204
Beta is 1.74% higher than peers
Average Industry Beta:
1.292
Beta is -5.19% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.60%
Sustainable growth rate is 0.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.103
Alpha is 85.14% above industry average alpha yield
Alpha is 656% higher than market/& is unsustainably high
Analysis of Cost of Capital of
IIIN
Equity cost of capital:
0.115
Equity cost of capital is -3.83% below industry mean WACC
Unlevered (without debt) cost of capital:
11.51%
Before-tax cost of debt:
4.72%
After-tax cost of debt:
3.73%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.73%
WACC is -4.51% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$37.10
Revenue growth rate per share of (3Y):
1.91
Annual revenue growth rate is 919.48% above the industry average
EPS:
$1.37
Expected Annual growth rate of EPS (3Y):
67.79%
Expected future EPS growth rate is 222.07% higher than the Metal Fabrication industry
Free cash flow (FCF) per share:
$2.10
Balance sheet equity growth per share: 44.68%
Equity growth rate per share is 96.39% higher than the industry
Debt per share
$0.04
EBITDA per share
$7.75
Valuation Analysis Today of
IIIN
P/E Ratio:
4.38
P/E Ratio of Competitors/Peers:
18.16
P/E ratio is -75.90% lower than main peers & is -92.70% lower than the industry
Stock price/value with industry average P/E ratio: $82.10
IIIN is -65.83% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.76
Price to sales ratio is -34.11% below the industry mean
P/B (Price to book value ratio):
1.91
Price to free cash flow: 13.39
FALSE
Net income growth rate (3Y):
81.15%
Net income growth rate is 679.62% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 37.29%
Dividend yeild: 7.45%
Previous Dividend: $0.03
Previous adjusted dividend: $0.03
Previous Dividend: $2.09
Expected next dividend best case: $0.62
Expected next dividend worst case: -$0.56
Average dividend payment (long-term): $0.34
Average dividend increase/decrease (growth rate) % per period: 1127.02%
Expected next dividend payment date: 22/09/2022
Expected next dividend record date: 09/08/2022
Expected next dividend declaration date: 22/08/2022
Previous dividend payment date: 24/06/2022
Previous dividend record date: 06/10/2022
Previous dividend declaration date: 24/05/2022
Dividend History:
2022-06-09--$0.03
2021-12-01--$2.03
2021-06-10--$0.03
2022-03-10--$0.03
2021-09-09--$0.03
2021-03-11--$0.03
Dividend growth rate is 80.44% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
0.29%
Net debt to equity ratio:
-21.35%
Debt to assets ratio:
0.23%
Net debt to assets ratio:
-16.56%
Debt-to-asset ratio is -99.22% below industry average
Ability to repay debt:
Interest coverage ratio:
1644.1
Interest coverage ratio is 181.67% more than industry average
Looking forward:
Debt growth rate:
-31.82%
Annual debt growth is -25% lower than industry average debt growth rate
Debt repayment rate in last quarter: 5.11%
Analysis of Key Statistics
Correlation of price movement with the market:
0.565
Statistical significance of correlation:
IIIN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.46
Stock price is 22.99% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.46
Correlation of price movement with Nasdaq (^IXIC):
0.02
Covariance of price movement with the market:
0.04
Kurtosis
6.803
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:
-0.289
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
IIIN
Gross Profit Margin Ratio:
93%
Operating Profit Margin Ratio:
19.06%
Operating profit margin is 179.01% higher than the industry
Net Profit Margin Ratio:
93%
Effective Tax Rate:
22.57%
Effective tax rate is -28.43% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
36.95%
Return on equity (ROE) is 143.90% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
28.66%
Return on assets (ROA) is 150.52% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
3.62
Current ratio is -20.13% below industry average
Cash Conversion Cycle (days):
30.3
Cash conversion cycle is -16.54% below industry average
The remaining useful life of property plant & equipment is: 7.8 years
Stock based compensation to net income ratio:
0.26%
In-depth Efficiency Analysis
Revenue generated per employee:
792.6K
Each employee generates 36% more revenue than industry average revenue per employee
EBITDA generated per employee:
165.7K
Each employee generates 61% more EBITDA than industry average revenue per employee
Profit generated per employee:
115.8K
Each employee generates 77% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
14.0K
Each employee generates -348% less free cash flow than industry average revenue per employee
Assets/Capital per employee
155.5K
Each employee generates -348% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
IIIN
AERSALE CORPORATION (XNAS:ASLE)
Sterling Infrastructure, Inc. (XNAS:STRL)
NAPCO SECURITY TECHNOLOGIES, INC. (XNAS:NSSC)
HERITAGE-CRYSTAL CLEAN, INC. (XNAS:HCCI)
TITAN MACHINERY INC. (XNAS:TITN)
SMITH & WESSON BRANDS, INC. (XNAS:SWBI)
VSE CORPORATION (XNAS:VSEC)
EHang Holdings Limited (XNAS:EH)
CHEKZ
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
723.67M
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:
552.76M
170.90M
-
-
32.99M
-
-
32.99M
35.00K
92.00K
14.67M
151.26M
137.91M
105.69M
136.50M
30.81M
105.69M
Statement of Cash Flow
Date:
Period:
3.71M
Differed Income Tax :
16.00K
Stock Based Compensation :
272.00K
Change in Working Capital :
- 13406.00K
Accounts Receivables:
- 5645.00K
Other Working Capital:
7.98M
Other Non-Cash Items:
- 85.00K
Net Cash Provided by Operating Activities:
13.63M
Investments in PP&E:
497.00K
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):
1/1/22
2022
Q1
63.02M
-
63.02M
73.56M
81.56M
8.66M
226.80M
105.39M
9.75M
7.46M
90.00K
-
19.29M
141.98M
-
368.78M
35.37M
1.12M
13.01M
-
26.09M
62.57M
836.00K
13.04M
20.19M
-
82.76M
19.41M
190.10M
- 2442.0K
78.95M
January 1, 2022 at 7:00:00 AM
585.75M
286.02M
368.78M
-
1.95M
- 61069.0K
-
- 1573.00K
- 1076.00K
- 45.00K
-
-
- 39410.00K
36.00K
- 39419.00K
-
- 26864.00K
63.02M
89.88M
13.63M
- 838.00K
12.79M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
IIIN
2023
2024
2025
2026
2027
$31.92
$34.55
$37.39
$40.47
$43.80