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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Schnitzer Steel Industries, Inc. (XNAS:SCHN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SCHN
Name:
SCHNITZER STEEL INDUSTRIES, INC. (XNAS:SCHN)
Sector:
- 73988.00K
Industry:
Steel
CEO:
Ms. Tamara Lundgren
Total Employees:
3,167
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -0.20% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SCHNITZER STEEL INDUSTRIES, INC.(SCHN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND STEEL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
32.27
One Month Price Target:
$32.55
Six Month Price Target :
$33.93
Likely Price in One Year's Time:
Ticker:
$35.59
Likely Trading Range Today Under (Normal Volatility)
$32.11
Price Upper limit ($) :
$32.5
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$29.97
This week:
$27.14
This month :
$22.
Other Primary facts
Market Cap:
891.20M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
27.45M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.72%
-18.12%
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:
$42.92
$37.99
$21.62
$26.55
Medium risk (<10%) entry points
Buy Call
Sell Call
$36.39
Buy Put:
Sell Put:
$35.34
$28.14
$29.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SCHN
Sharpe Ratio:
3.06%
Comparison:
SCHN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -18.99% lower than the industry
& ratio is 34.47% higher than the market/S&P 500 average
Average Returns/Yield of
SCHN
Daily returns:
0.12%
Weekly returns:
0.58%
Monthly returns:
2.34%
Yearly returns:
34.75%
Comparison of returns:
Average annual returns/yield (last 3 years) is -19.34% below industry average
Classification:
SCHN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.4
Statistical test of Returns:
SCHN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.52%
Weekly Volatility:
7.87%
Monthly Volatility:
15.75%
Yearly Volatility:
54.55%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.67%
Volatility in last five trading days has been -52.47% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.12%
Weekly VaR:
-15.91%
Monthly VaR:
-31.82%
How Much Can the price of
SCHN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$23.62
This translates to price declining to:
$4.84
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SCHN is a 124.59% riskier investment compared to the market/S&P 500 & is 92.40% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.45% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SCHN
Beta in relation to market/S&P 500--1.53
Expected beta in 1 year's time:
1.095
Expected beta in 3 year's time:
1.549
Unlevered (debt free) Beta:
1.144
Beta in relation to Nasdaq (XNAS):
0.92
Beta in relation to all global stocks::
0.917
Beta Comparison & Analysis
Beta of competitors/peers::
1.682
Beta is -9.00% lower than peers
Average Industry Beta:
1.33
Beta is 15.12% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
21.77%
Sustainable growth rate is -54.41% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.144
Alpha is -36.01% below industry average alpha yield
Alpha is 916% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SCHN
Equity cost of capital:
0.136
Equity cost of capital is 11.24% above industry mean WACC
Unlevered (without debt) cost of capital:
10.19%
Before-tax cost of debt:
1.64%
After-tax cost of debt:
1.29%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.29%
WACC is 12.38% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$125.22
Revenue growth rate per share of (3Y):
1.01
Annual revenue growth rate is -85.31% below industry average
EPS:
$6.76
Expected Annual growth rate of EPS (3Y):
48.25%
Expected future EPS growth rate is -18.82% lower than the Steel industry
Free cash flow (FCF) per share:
$1.47
Balance sheet equity growth per share: 1.29%
Equity growth rate per share is -107.23% lower than the industry
Debt per share
$13.31
EBITDA per share
$11.22
Valuation Analysis Today of
SCHN
P/E Ratio:
4.77
P/E Ratio of Competitors/Peers:
8.79
P/E ratio is -45.73% lower than main peers & is 10.21% higher than the industry
Stock price/value with industry average P/E ratio: $29.26
SCHN is 10.30% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $18.33
Present value of the expected future dividends only: $5.52
P/S (Price to Sales ratio):
0.26
Price to sales ratio is -57.54% below the industry mean
P/B (Price to book value ratio):
1.01
Price to free cash flow: 21.98
Price to free cash flow ratio is 165.91% higher than the industry
Net income growth rate (3Y):
4.26%
Net income growth rate is -97.01% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 2.77%
Dividend yeild: 2.33%
Previous Dividend: $0.19
Previous adjusted dividend: $0.19
Previous Dividend: $0.75
Expected next dividend best case: $0.19
Expected next dividend worst case: $0.19
Average dividend payment (long-term): $0.19
Average dividend increase/decrease (growth rate) % per period: 0.03%
Expected next dividend payment date: 08/01/2022
Expected next dividend record date: 18/07/2022
Expected next dividend declaration date: 07/04/2022
Previous dividend payment date: 05/02/2022
Previous dividend record date: 18/04/2022
Previous dividend declaration date: 04/04/2022
Dividend History:
2022-04-14--$0.19
2021-11-05--$0.19
2021-04-16--$0.19
2022-01-28--$0.19
2021-07-09--$0.19
2021-01-14--$0.19
Dividend growth rate is -100.10% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
41.97%
Net debt to equity ratio:
42.67%
Debt to assets ratio:
21.25%
Net debt to assets ratio:
21.60%
Debt-to-asset ratio is -57.04% below industry average
Ability to repay debt:
Interest coverage ratio:
48.17
Interest coverage ratio is 41.46% more than industry average
Looking forward:
Debt growth rate:
-15.91%
Annual debt growth is -2571% lower than industry average debt growth rate
Debt repayment rate in last quarter: 19.11%
Analysis of Key Statistics
Correlation of price movement with the market:
0.566
Statistical significance of correlation:
SCHN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.523
Stock price is 8.30% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.523
Correlation of price movement with Nasdaq (^IXIC):
0.007
Covariance of price movement with the market:
0.014
Kurtosis
2.96
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.002
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SCHN
Gross Profit Margin Ratio:
61%
Operating Profit Margin Ratio:
7.59%
Operating profit margin is -48.32% lower than the industry
Net Profit Margin Ratio:
61%
Effective Tax Rate:
19.48%
Effective tax rate is 5.95% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
23.11%
Return on equity (ROE) is -53.77% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.70%
Return on assets (ROA) is -39.58% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.93
Current ratio is -26.61% below industry average
Cash Conversion Cycle (days):
19.3
Cash conversion cycle is -49.75% below industry average
The remaining useful life of property plant & equipment is: 2.2 years
Stock based compensation to net income ratio:
2.18%
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates -89% less revenue than industry average revenue per employee
EBITDA generated per employee:
97.3K
Each employee generates -96% less EBITDA than industry average revenue per employee
Profit generated per employee:
63.5K
Each employee generates -97% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 23.4K
Each employee generates -112% less free cash flow than industry average revenue per employee
Assets/Capital per employee
330.7K
Each employee generates -112% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SCHN
AMYRIS, INC. (XNAS:AMRS)
SPDR BBGSASBUSCorpESGUCITSETFA (XLON:USCR)
CENTURY ALUMINUM COMPANY (XNAS:CENX)
FERROGLOBE PLC (XNAS:GSM)
Origin Materials Inc (XNAS:ORGN)
GEVO, INC. (XNAS:GEVO)
Hawkins, Inc. (XNAS:HWKN)
PIEDMONT LITHIUM INC. (XNAS:PLL)
MERCER INTERNATIONAL INC. (XNAS:MERC)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/31/22
Revenue:
3.44B
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:
2.91B
528.92M
-
-
270.55M
-
-
270.55M
-
6.39M
50.81M
307.99M
260.83M
201.23M
254.36M
49.55M
201.23M
Statement of Cash Flow
Date:
Period:
17.22M
Differed Income Tax :
11.23M
Stock Based Compensation :
4.39M
Change in Working Capital :
- 114633.00K
Accounts Receivables:
- 68490.00K
Other Working Capital:
- 3965.00K
Other Non-Cash Items:
1.33M
Net Cash Provided by Operating Activities:
- 34269.00K
Investments in PP&E:
-
Net Acquisitions:
- 113939.00K
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):
11/30/21
2022
Q1
19.08M
-
19.08M
304.18M
313.87M
35.30M
672.43M
707.74M
232.37M
23.10M
13.26M
26.58M
44.30M
1.05B
-
1.72B
196.85M
25.20M
2.87M
-
126.60M
348.64M
365.41M
79.70M
496.37M
-
845.01M
27.82M
834.50M
- 35279.0K
43.64M
November 30, 2021 at 12:00:00 AM
3.18B
870.69M
1.72B
-
390.60M
371.5M
-
- 29076.00K
- 143015.00K
- 86314.00K
-
-
- 5568.00K
260.49M
168.61M
- 59.00K
- 8737.00K
19.08M
27.82M
- 34269.00K
- 39719.00K
- 73988.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SCHN
2023
2024
2025
2026
2027
$35.77
$62.00
$68.38
$75.42
$83.18