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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Regal Rexnord Corporation (XNYS:RRX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RRX
Name:
Regal Rexnord Corporation (XNYS:RRX)
Sector:
- 19300.00K
Industry:
Specialty Industrial Machinery
CEO:
Total Employees:
30,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -5.38% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF REGAL REXNORD CORPORATION(RRX) 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 ($) :
135.85
One Month Price Target:
$136.79
Six Month Price Target :
$141.51
Likely Price in One Year's Time:
Ticker:
$147.16
Likely Trading Range Today Under (Normal Volatility)
$135.41
Price Upper limit ($) :
$136.57
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$128.96
This week:
$120.45
This month :
$105.04
Other Primary facts
Market Cap:
9.14B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
66.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.17%
-16.47%
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:
$167.79
$152.95
$103.91
$118.75
Medium risk (<10%) entry points
Buy Call
Sell Call
$148.12
Buy Put:
Sell Put:
$144.96
$123.54
$126.74
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RRX
Sharpe Ratio:
3.74%
Comparison:
RRX, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 97.50% higher than the industry
& ratio is 64.17% higher than the market/S&P 500 average
Average Returns/Yield of
RRX
Daily returns:
0.10%
Weekly returns:
0.52%
Monthly returns:
2.06%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 52.30% above industry average
Classification:
RRX, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.78
Statistical test of Returns:
RRX has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.52%
Weekly Volatility:
5.63%
Monthly Volatility:
11.27%
Yearly Volatility:
39.03%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.63%
Volatility in last five trading days has been -74.83% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.07%
Weekly VaR:
-11.34%
Monthly VaR:
-22.68%
How Much Can the price of
RRX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-78.55%
This translates to price declining to:
$110.22
This translates to price declining to:
$29.14
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RRX is a 60.05% riskier investment compared to the market/S&P 500 & is 37.11% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.92% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RRX
Beta in relation to market/S&P 500--1.24
Expected beta in 1 year's time:
0.972
Expected beta in 3 year's time:
1.375
Unlevered (debt free) Beta:
0.987
Beta in relation to Nasdaq (XNAS):
0.844
Beta in relation to all global stocks::
0.844
Beta Comparison & Analysis
Beta of competitors/peers::
-
-
Average Industry Beta:
1.281
Beta is -3.31% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.131
Alpha is 203.43% above industry average alpha yield
Alpha is 835% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RRX
Equity cost of capital:
0.116
Equity cost of capital is -2.44% below industry mean WACC
Unlevered (without debt) cost of capital:
9.27%
Before-tax cost of debt:
2.49%
After-tax cost of debt:
1.97%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.97%
WACC is -75.14% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$62.67
Revenue growth rate per share of (3Y):
1.41
-
EPS:
-
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$4.22
-
-
Debt per share
$32.33
EBITDA per share
$9.19
Valuation Analysis Today of
RRX
P/E Ratio:
24.3
P/E Ratio of Competitors/Peers:
-
- & is -11.67% lower than the industry
-
-
-
-
P/S (Price to Sales ratio):
2.17
Price to sales ratio is -47.76% below the industry mean
P/B (Price to book value ratio):
1.41
Price to free cash flow: 32.20
Price to free cash flow ratio is -44.35% lower than the industry
Net income growth rate (3Y):
-
Dividend Analysis
Dividend payout rate: 8.73%
Dividend yeild: 5.89%
Previous Dividend: $0.35
Previous adjusted dividend: $0.35
Previous Dividend: $8.00
Expected next dividend best case: $2.03
Expected next dividend worst case: -$1.33
Average dividend payment (long-term): $0.92
Average dividend increase/decrease (growth rate) % per period: 176.27%
Expected next dividend payment date: 10/12/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 14/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$0.35
2021-12-30--$0.33
2021-09-30--$6.99
2022-03-30--$0.33
2021-10-05--$6.99
2021-07-01--$0.33
Dividend growth rate is 4955.10% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
33.66%
Net debt to equity ratio:
24.36%
Debt to assets ratio:
20.52%
Net debt to assets ratio:
14.85%
Debt-to-asset ratio is -61.97% below industry average
Ability to repay debt:
Interest coverage ratio:
11.25
Interest coverage ratio is -42.33% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 51.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.715
Statistical significance of correlation:
RRX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is 12.59% 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):
0.005
Covariance of price movement with the market:
0.008
Kurtosis
6.335
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:
-0.287
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RRX
Gross Profit Margin Ratio:
118%
Operating Profit Margin Ratio:
9.27%
Operating profit margin is -138.28% lower than the industry
Net Profit Margin Ratio:
118%
Effective Tax Rate:
23.97%
Effective tax rate is 28.30% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.00%
Return on equity (ROE) is 19.02% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.44%
Return on assets (ROA) is -48.05% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
2.81
Current ratio is -6.87% below industry average
Cash Conversion Cycle (days):
-51.4
Cash conversion cycle is -183.58% below industry average
The remaining useful life of property plant & equipment is: 0.1 years
Stock based compensation to net income ratio:
2.47%
In-depth Efficiency Analysis
Revenue generated per employee:
138.9K
Each employee generates -96% less revenue than industry average revenue per employee
EBITDA generated per employee:
20.4K
Each employee generates -97% less EBITDA than industry average revenue per employee
Profit generated per employee:
8.5K
Each employee generates -98% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.6K
Each employee generates -101% less free cash flow than industry average revenue per employee
Assets/Capital per employee
250.0K
Each employee generates -101% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RRX
-
-
-
-
-
-
-
-
-
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.17B
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:
2.93B
1.23B
-
-
-
-
809.80M
809.80M
6.60M
54.30M
219.10M
611.10M
386.20M
255.30M
343.70M
82.40M
255.30M
Statement of Cash Flow
Date:
Period:
77.90M
Differed Income Tax :
-
Stock Based Compensation :
6.30M
Change in Working Capital :
- 227700.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
10.50M
Net Cash Provided by Operating Activities:
- 5900.00K
Investments in PP&E:
- 13400.00K
Net Acquisitions:
- 35000.00K
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
624.70M
-
624.70M
832.20M
1.34B
178.60M
2.97B
969.20M
4.05B
2.40B
-
35.70M
39.80M
7.50B
-
10.47B
641.30M
30.70M
-
-
384.60M
1.06B
2.15B
180.10M
2.99B
-
4.05B
700.00K
1.93B
- 175600.0K
-
March 31, 2022 at 6:00:00 AM
3.74B
6.38B
10.43B
-
2.18B
1.6B
-
1.40M
- 47000.00K
- 2236700.00K
-
- 117000.00K
- 22300.00K
2.38B
3.70M
1.10M
- 48100.00K
624.70M
672.80M
- 5900.00K
- 13400.00K
- 19300.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
RRX
2023
2024
2025
2026
2027
$110.37
$119.56
$129.51
$140.30
$151.98