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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Newmarket Corporation (XNYS:NEU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NEU
Name:
NewMarket Corporation (XNYS:NEU)
Sector:
- 5831.00K
Industry:
Specialty Chemicals
CEO:
Mr. Thomas Gottwald
Total Employees:
2,104
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 57.14% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NEWMARKET CORPORATION(NEU) 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 ($) :
281.43
One Month Price Target:
$282.02
Six Month Price Target :
$285.
Likely Price in One Year's Time:
Ticker:
$288.57
Likely Trading Range Today Under (Normal Volatility)
$280.35
Price Upper limit ($) :
$282.16
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$270.27
This week:
$256.48
This month :
$231.52
Other Primary facts
Market Cap:
2.82B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
10.01M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.08%
-11.82%
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:
$333.31
$310.12
$229.55
$252.74
Medium risk (<10%) entry points
Buy Call
Sell Call
$302.58
Buy Put:
Sell Put:
$297.63
$260.22
$265.23
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NEU
Sharpe Ratio:
-3.72%
Comparison:
NEU, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -275.50% lower than the industry
& is -263.10% lower than the market/S&P 500 average
Average Returns/Yield of
NEU
Daily returns:
-0.06%
Weekly returns:
-0.31%
Monthly returns:
-1.24%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -160.37% below industry average
Classification:
NEU, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
NEU has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.90%
Weekly Volatility:
4.25%
Monthly Volatility:
8.50%
Yearly Volatility:
29.44%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.49%
Volatility in last five trading days has been -74.16% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.97%
Weekly VaR:
-8.87%
Monthly VaR:
-17.73%
How Much Can the price of
NEU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-61.43%
This translates to price declining to:
$235.28
This translates to price declining to:
$108.55
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
NEU is a 25.16% riskier investment compared to the market/S&P 500 & is 7.22% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -43.46% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NEU
Beta in relation to market/S&P 500--0.38
Expected beta in 1 year's time:
0.51
Expected beta in 3 year's time:
0.721
Unlevered (debt free) Beta:
0.197
Beta in relation to Nasdaq (XNAS):
0.372
Beta in relation to all global stocks::
0.341
Beta Comparison & Analysis
Beta of competitors/peers::
1.388
Beta is -72.81% lower than peers
Average Industry Beta:
1.164
Beta is -67.60% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.04%
Sustainable growth rate is -54.84% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.206
Alpha is -253.00% below industry average alpha yield
Alpha is -1309% below the market average
Analysis of Cost of Capital of
NEU
Equity cost of capital:
0.057
Equity cost of capital is -48.46% below industry mean WACC
Unlevered (without debt) cost of capital:
2.99%
Before-tax cost of debt:
4.10%
After-tax cost of debt:
3.24%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.24%
WACC is -43.28% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$244.89
Revenue growth rate per share of (3Y):
3.71
Annual revenue growth rate is 463.12% above the industry average
EPS:
$16.95
Expected Annual growth rate of EPS (3Y):
-7.98%
Expected future EPS growth rate is -980.44% lower than the Specialty Chemicals industry
Free cash flow (FCF) per share:
$4.99
Balance sheet equity growth per share: 13.68%
Equity growth rate per share is 30.82% higher than the industry
Debt per share
$89.30
EBITDA per share
$35.33
Valuation Analysis Today of
NEU
P/E Ratio:
15.02
P/E Ratio of Competitors/Peers:
233.76
P/E ratio is -93.57% lower than main peers & is -59.90% lower than the industry
Stock price/value with industry average P/E ratio: $634.93
NEU is -55.68% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $266.58
Present value of the expected future dividends only: $181.20
P/S (Price to Sales ratio):
1.15
Price to sales ratio is -58.35% below the industry mean
P/B (Price to book value ratio):
3.71
Price to free cash flow: 56.36
Price to free cash flow ratio is 4.95% higher than the industry
Net income growth rate (3Y):
-13.42%
Net income growth rate is -75.72% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.95%
Dividend yeild: 2.98%
Previous Dividend: $2.10
Previous adjusted dividend: $2.10
Previous Dividend: $8.40
Expected next dividend best case: $2.18
Expected next dividend worst case: $2.02
Average dividend payment (long-term): $1.97
Average dividend increase/decrease (growth rate) % per period: 1.05%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$2.10
2021-12-14--$2.10
2021-06-14--$1.90
2022-03-14--$2.10
2021-09-14--$2.10
2021-03-12--$1.90
Dividend growth rate is -94.89% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
117.64%
Net debt to equity ratio:
108.64%
Debt to assets ratio:
39.19%
Net debt to assets ratio:
36.19%
Debt-to-asset ratio is -27.56% below industry average
Ability to repay debt:
Interest coverage ratio:
9.49
Interest coverage ratio is -54.88% less than industry average
Looking forward:
Debt growth rate:
83.79%
Annual debt growth is -77% lower than industry average debt growth rate
Debt repayment rate in last quarter: 28.54%
Analysis of Key Statistics
Correlation of price movement with the market:
0.455
Statistical significance of correlation:
NEU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is -21.50% 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):
0.027
Covariance of price movement with the market:
0.029
Kurtosis
7.667
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:
-0.636
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
NEU
Gross Profit Margin Ratio:
88%
Operating Profit Margin Ratio:
10.30%
Operating profit margin is -103.66% lower than the industry
Net Profit Margin Ratio:
88%
Effective Tax Rate:
22.09%
Effective tax rate is 23.00% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
23.75%
Return on equity (ROE) is -17.38% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.91%
Return on assets (ROA) is 201.28% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
2.71
Current ratio is 0.96% above industry average
Cash Conversion Cycle (days):
35.8
Cash conversion cycle is -41.93% below industry average
The remaining useful life of property plant & equipment is: 2.8 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates 56% more revenue than industry average revenue per employee
EBITDA generated per employee:
168.1K
Each employee generates 70% more EBITDA than industry average revenue per employee
Profit generated per employee:
85.8K
Each employee generates 170% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.8K
Each employee generates -93% less free cash flow than industry average revenue per employee
Assets/Capital per employee
554.8K
Each employee generates -93% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 2.55%
Growth rate in R&D investment/expenditure is -75.57% lower than the industry
Competitors/Peer firms of
NEU
HECLA MINING COMPANY (XNYS:HL)
COMMERCIAL METALS COMPANY (XNYS:CMC)
WORTHINGTON INDUSTRIES, INC. (XNYS:WOR)
TRONOX HOLDINGS PLC (XNYS:TROX)
SUMMIT MATERIALS, INC. (XNYS:SUM)
First Majestic Silver Corp. (XNYS:AG)
UNIVAR SOLUTIONS INC. (XNYS:UNVR)
SENSIENT TECHNOLOGIES CORPORATION (XNYS:SXT)
CABOT CORPORATION (XNYS:CBT)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.45B
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:
1.91B
541.12M
143.87M
-
144.68M
-
-
288.55M
-
37.28M
84.76M
353.73M
252.57M
180.51M
231.69M
51.17M
180.51M
Statement of Cash Flow
Date:
Period:
21.07M
Differed Income Tax :
- 12135.00K
Stock Based Compensation :
-
Change in Working Capital :
- 66987.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
5.51M
Net Cash Provided by Operating Activities:
6.78M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 787.00K
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
84.55M
-
84.55M
464.51M
524.09M
41.18M
1.11B
740.62M
123.88M
3.48M
-
-
299.24M
1.17B
-
2.28B
290.85M
16.17M
7.78M
-
104.68M
411.70M
894.17M
215.59M
1.11B
-
1.52B
-
845.36M
- 85270.0K
-
March 31, 2022 at 6:00:00 AM
2.20B
760.09M
2.28B
-
910.34M
825.8M
372.85M
- 12612.00K
359.45M
- 357099.00K
-
- 37347.00K
- 21570.00K
50.17M
- 365849.00K
867.00K
1.25M
84.55M
83.30M
6.78M
- 12612.00K
- 5831.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
NEU
2023
2024
2025
2026
2027
$290.01
$1,179.61
$1,209.52
$1,240.19
$1,271.63