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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Transcat, Inc. (XNAS:TRNS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TRNS
Name:
TRANSCAT, INC. (XNAS:TRNS)
Sector:
852.00K
Industry:
Industrial Distribution
CEO:
Mr. Lee Rudow
Total Employees:
918
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 292.94% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TRANSCAT, INC.(TRNS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INDUSTRIAL DISTRIBUTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
71.43
One Month Price Target:
$71.75
Six Month Price Target :
$73.37
Likely Price in One Year's Time:
Ticker:
$75.3
Likely Trading Range Today Under (Normal Volatility)
$71.16
Price Upper limit ($) :
$71.94
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$66.8
This week:
$61.07
This month :
$50.72
Other Primary facts
Market Cap:
557.01M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
7.55M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
25.56%
-27.64%
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:
$92.89
$82.87
$49.97
$59.99
Medium risk (<10%) entry points
Buy Call
Sell Call
$79.61
Buy Put:
Sell Put:
$77.47
$63.23
$65.39
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TRNS
Sharpe Ratio:
4.84%
Comparison:
TRNS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 57.19% higher than the industry
& ratio is 112.46% higher than the market/S&P 500 average
Average Returns/Yield of
TRNS
Daily returns:
0.17%
Weekly returns:
0.83%
Monthly returns:
3.31%
Yearly returns:
22.00%
Comparison of returns:
Average annual returns/yield (last 3 years) is 80.71% above industry average
Classification:
TRNS, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.33
Statistical test of Returns:
TRNS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.24%
Weekly Volatility:
7.24%
Monthly Volatility:
14.48%
Yearly Volatility:
50.16%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.43%
Volatility in last five trading days has been -55.79% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.48%
Weekly VaR:
-14.50%
Monthly VaR:
-29.00%
How Much Can the price of
TRNS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$54.47
This translates to price declining to:
$10.71
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TRNS is a 104.66% riskier investment compared to the market/S&P 500 & is 75.33% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 18.87% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TRNS
Beta in relation to market/S&P 500--0.81
Expected beta in 1 year's time:
0.655
Expected beta in 3 year's time:
0.926
Unlevered (debt free) Beta:
0.617
Beta in relation to Nasdaq (XNAS):
0.556
Beta in relation to all global stocks::
0.826
Beta Comparison & Analysis
Beta of competitors/peers::
1.653
Beta is -51.18% lower than peers
Average Industry Beta:
1.265
Beta is -36.23% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.63%
Sustainable growth rate is -13.15% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.311
Alpha is 205.22% above industry average alpha yield
Alpha is 1978% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TRNS
Equity cost of capital:
0.087
Equity cost of capital is -26.57% below industry mean WACC
Unlevered (without debt) cost of capital:
6.64%
Before-tax cost of debt:
3.24%
After-tax cost of debt:
2.56%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.56%
WACC is -16.93% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$27.16
Revenue growth rate per share of (3Y):
7.03
Annual revenue growth rate is -50.08% below industry average
EPS:
$1.50
Expected Annual growth rate of EPS (3Y):
15.36%
Expected future EPS growth rate is -31.43% lower than the Industrial Distribution industry
Free cash flow (FCF) per share:
$1.00
-
-
Debt per share
$3.62
EBITDA per share
$3.14
Valuation Analysis Today of
TRNS
P/E Ratio:
50.45
P/E Ratio of Competitors/Peers:
8.5
P/E ratio is 493.28% higher than main peers & is 95.35% higher than the industry
Stock price/value with industry average P/E ratio: $38.74
TRNS is 84.37% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.63
Price to sales ratio is 45.64% above the industry mean
P/B (Price to book value ratio):
7.03
Price to free cash flow: 71.73
Price to free cash flow ratio is 8.43% higher than the industry
Net income growth rate (3Y):
26.26%
Net income growth rate is -227.17% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
35.64%
Net debt to equity ratio:
38.04%
Debt to assets ratio:
20.85%
Net debt to assets ratio:
22.25%
Debt-to-asset ratio is -51.86% below industry average
Ability to repay debt:
Interest coverage ratio:
24.88
Interest coverage ratio is -76.07% less than industry average
Looking forward:
Debt growth rate:
-9.31%
Annual debt growth is -144% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.18%
Analysis of Key Statistics
Correlation of price movement with the market:
0.34
Statistical significance of correlation:
TRNS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.554
Stock price is -38.65% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.554
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.027
Kurtosis
18.792
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.33
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TRNS
Gross Profit Margin Ratio:
114%
Operating Profit Margin Ratio:
6.90%
Operating profit margin is 7.33% higher than the industry
Net Profit Margin Ratio:
114%
Effective Tax Rate:
13.72%
Effective tax rate is -31.17% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.84%
Return on equity (ROE) is -42.61% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.68%
Return on assets (ROA) is -12.37% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
2.37
Current ratio is -5.07% below industry average
Cash Conversion Cycle (days):
40.7
Cash conversion cycle is 27.73% above industry average
The remaining useful life of property plant & equipment is: 8.3 years
Stock based compensation to net income ratio:
3.84%
In-depth Efficiency Analysis
Revenue generated per employee:
223.3K
Each employee generates -60% less revenue than industry average revenue per employee
EBITDA generated per employee:
25.8K
Each employee generates -59% less EBITDA than industry average revenue per employee
Profit generated per employee:
12.4K
Each employee generates -68% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.9K
Each employee generates -847% less free cash flow than industry average revenue per employee
Assets/Capital per employee
89.8K
Each employee generates -847% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TRNS
YELLOW CORPORATION (XNAS:YELL)
CBAK ENERGY TECHNOLOGY, INC. (XNAS:CBAT)
ATLAS TECHNICAL CONSULTANTS, INC. (XNAS:ATCX)
Hunter Group ASA (XOSL:HUNT)
PREFORMED LINE PRODUCTS COMPANY (XNAS:PLPC)
OFSSL
P.A.M. TRANSPORTATION SERVICES, INC. (XNAS:PTSI)
MESA AIR GROUP, INC. (XNAS:MESA)
COVENANT LOGISTICS GROUP, INC. (XNAS:CVLG)
Current Analyst Ratings
Strong buy�8%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/26/22
Revenue:
204.96M
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:
146.52M
58.44M
-
23.65M
44.30M
20.65M
-
44.30M
-
953.00K
9.57M
23.71M
14.14M
11.38M
13.19M
1.81M
11.38M
Statement of Cash Flow
Date:
Period:
1.99M
Differed Income Tax :
22.00K
Stock Based Compensation :
437.00K
Change in Working Capital :
- 4422.00K
Accounts Receivables:
-
Other Working Capital:
- 2880.00K
Other Non-Cash Items:
340.00K
Net Cash Provided by Operating Activities:
2.06M
Investments in PP&E:
- 1203.00K
Net Acquisitions:
- 931.00K
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):
6/30/21
2022
Q1
254.00K
-
254.00K
33.70M
11.64M
3.14M
48.74M
30.64M
43.90M
6.90M
-
-
956.00K
82.40M
-
131.14M
11.20M
2.09M
-
-
7.31M
20.60M
27.34M
3.26M
33.83M
-
54.43M
3.73M
53.61M
- 269.0K
-
June 30, 2021 at 6:00:00 AM
190.82M
76.71M
131.14M
-
29.43M
29.2M
-
-
- 2134.00K
- 608.00K
699.00K
- 3377.00K
-
3.24M
- 43.00K
- 184.00K
- 306.00K
254.00K
560.00K
2.06M
- 1203.00K
852.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
TRNS
2023
2024
2025
2026
2027
$72.57
$76.50
$80.65
$85.02
$89.63