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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The J. M. Smucker Company (XNYS:SJM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SJM
Name:
THE J. M. SMUCKER COMPANY (XNYS:SJM)
Sector:
69.80M
Industry:
Packaged Foods
CEO:
Mr. Mark Smucker
Total Employees:
6,700
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -110.49% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE J. M. SMUCKER COMPANY(SJM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
140
One Month Price Target:
$140.17
Six Month Price Target :
$141.02
Likely Price in One Year's Time:
Ticker:
$142.05
Likely Trading Range Today Under (Normal Volatility)
$139.67
Price Upper limit ($) :
$140.49
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$135.16
This week:
$129.18
This month :
$118.37
Other Primary facts
Market Cap:
14.92B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
106.56M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.38%
-10.49%
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:
$162.43
$152.05
$117.57
$127.95
Medium risk (<10%) entry points
Buy Call
Sell Call
$148.68
Buy Put:
Sell Put:
$146.46
$131.30
$133.54
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SJM
Sharpe Ratio:
2.83%
Comparison:
SJM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 116.21% higher than the industry
& ratio is 24.31% higher than the market/S&P 500 average
Average Returns/Yield of
SJM
Daily returns:
0.06%
Weekly returns:
0.29%
Monthly returns:
1.15%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 63.38% above industry average
Classification:
SJM, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.94
Statistical test of Returns:
SJM has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.71%
Weekly Volatility:
3.82%
Monthly Volatility:
7.65%
Yearly Volatility:
26.50%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.23%
Volatility in last five trading days has been -27.90% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.46%
Weekly VaR:
-7.73%
Monthly VaR:
-15.45%
How Much Can the price of
SJM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-13%
Worst case (decline):
-53.53%
This translates to price declining to:
$121.79
This translates to price declining to:
$65.06
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SJM is a 9.06% riskier investment compared to the market/S&P 500 & is -6.57% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -25.23% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SJM
Beta in relation to market/S&P 500--0.22
Expected beta in 1 year's time:
0.435
Expected beta in 3 year's time:
0.615
Unlevered (debt free) Beta:
0.159
Beta in relation to Nasdaq (XNAS):
0.201
Beta in relation to all global stocks::
0.292
Beta Comparison & Analysis
Beta of competitors/peers::
0.641
Beta is -66.02% lower than peers
Average Industry Beta:
0.586
Beta is -62.83% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.26%
Sustainable growth rate is -52.95% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.091
Alpha is 625.97% above industry average alpha yield
Alpha is 580% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SJM
Equity cost of capital:
0.046
Equity cost of capital is -35.20% below industry mean WACC
Unlevered (without debt) cost of capital:
3.39%
Before-tax cost of debt:
3.37%
After-tax cost of debt:
2.66%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.66%
WACC is -28.27% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$62.21
Revenue growth rate per share of (3Y):
1.83
Annual revenue growth rate is -72.02% below industry average
EPS:
$5.84
Expected Annual growth rate of EPS (3Y):
5.52%
Expected future EPS growth rate is -69.42% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$6.24
Balance sheet equity growth per share: 16.33%
Equity growth rate per share is 236.35% higher than the industry
Debt per share
$33.99
EBITDA per share
$11.64
Valuation Analysis Today of
SJM
P/E Ratio:
25.68
P/E Ratio of Competitors/Peers:
22.05
P/E ratio is 16.49% higher than main peers & is -33.54% lower than the industry
Stock price/value with industry average P/E ratio: $225.66
SJM is -37.96% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $150.04
Present value of the expected future dividends only: $117.49
P/S (Price to Sales ratio):
2.25
Price to sales ratio is -2.96% below the industry mean
P/B (Price to book value ratio):
1.83
Price to free cash flow: 22.44
Price to free cash flow ratio is -44.08% lower than the industry
Net income growth rate (3Y):
-33.84%
Net income growth rate is -414.52% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 15.39%
Dividend yeild: 2.83%
Previous Dividend: $0.99
Previous adjusted dividend: $0.99
Previous Dividend: $3.96
Expected next dividend best case: $1.03
Expected next dividend worst case: $0.95
Average dividend payment (long-term): $0.93
Average dividend increase/decrease (growth rate) % per period: 1.23%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 20/07/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 21/04/2022
Dividend History:
2022-05-12--$0.99
2021-11-10--$0.99
2021-05-13--$0.90
2022-02-10--$0.99
2021-08-12--$0.99
2021-02-11--$0.90
Dividend growth rate is -439.29% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
44.32%
Net debt to equity ratio:
56.44%
Debt to assets ratio:
22.34%
Net debt to assets ratio:
28.44%
Debt-to-asset ratio is -58.56% below industry average
Ability to repay debt:
Interest coverage ratio:
7.71
Interest coverage ratio is -96.87% less than industry average
Looking forward:
Debt growth rate:
-12.73%
Annual debt growth is -105% lower than industry average debt growth rate
Debt repayment rate in last quarter: 10.10%
Analysis of Key Statistics
Correlation of price movement with the market:
0.325
Statistical significance of correlation:
SJM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is -24.34% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.019
Kurtosis
7.539
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:
-0.095
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SJM
Gross Profit Margin Ratio:
791%
Operating Profit Margin Ratio:
15.44%
Operating profit margin is 219.95% higher than the industry
Net Profit Margin Ratio:
791%
Effective Tax Rate:
16.83%
Effective tax rate is -58.71% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.73%
Return on equity (ROE) is -30.01% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.90%
Return on assets (ROA) is -12.75% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
0.71
Current ratio is -74.24% below industry average
Cash Conversion Cycle (days):
-27.4
Cash conversion cycle is -155.76% below industry average
The remaining useful life of property plant & equipment is: 8.4 years
Stock based compensation to net income ratio:
0.84%
In-depth Efficiency Analysis
Revenue generated per employee:
989.4K
Each employee generates 26% more revenue than industry average revenue per employee
EBITDA generated per employee:
185.1K
Each employee generates 64% more EBITDA than industry average revenue per employee
Profit generated per employee:
94.3K
Each employee generates 81% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.4K
Each employee generates -380% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.1M
Each employee generates -380% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SJM
ALBERTSONS COMPANIES, INC. (XNYS:ACI)
CONAGRA BRANDS, INC. (XNYS:CAG)
CAMPBELL SOUP COMPANY (XNYS:CPB)
Coca-Cola Femsa SAB de CV (XNYS:KOF)
MOLSON COORS BEVERAGE COMPANY (XNYS:TAP)
TAP-A
DARLING INGREDIENTS INC. (XNYS:DAR)
LAMB WESTON HOLDINGS, INC. (XNYS:LW)
THE CLOROX COMPANY (XNYS:CLX)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�42%
Sell�8%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
6.63B
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:
20.50M
6.61B
-
193.70M
1.01B
466.30M
669.20M
1.68B
-
160.90M
235.50M
1.24B
1.02B
631.70M
1.26B
212.10M
631.70M
Statement of Cash Flow
Date:
Period:
113.90M
Differed Income Tax :
-
Stock Based Compensation :
5.30M
Change in Working Capital :
- 139200.00K
Accounts Receivables:
- 32900.00K
Other Working Capital:
47.40M
Other Non-Cash Items:
3.90M
Net Cash Provided by Operating Activities:
137.80M
Investments in PP&E:
- 68000.00K
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):
7/31/21
2022
Q1
168.80M
-
168.80M
566.00M
1.11B
112.60M
1.95B
2.12B
6.02B
5.99B
-
-
130.70M
14.26B
-
16.21B
1.04B
1.16B
-
-
563.20M
2.76B
3.62B
308.00M
5.28B
-
8.04B
27.10M
2.89B
- 281600.0K
5.53B
July 31, 2021 at 6:00:00 AM
5.45B
8.17B
16.21B
-
4.78B
4.6B
-
- 12000.00K
- 80000.00K
- 407000.00K
-
- 6800.00K
- 97200.00K
287.70M
- 223300.00K
-
- 165500.00K
168.80M
334.30M
137.80M
- 68000.00K
69.80M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SJM
2023
2024
2025
2026
2027
$162.31
$164.68
$167.09
$169.54
$172.02