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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Valmont Industries, Inc. (XNYS:VMI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VMI
Name:
VALMONT INDUSTRIES, INC. (XNYS:VMI)
Sector:
- 24392.00K
Industry:
Conglomerates
CEO:
Mr. Stephen Kaniewski
Total Employees:
11,041
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -127.83% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VALMONT INDUSTRIES, INC.(VMI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONGLOMERATES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
270
One Month Price Target:
$271.69
Six Month Price Target :
$280.12
Likely Price in One Year's Time:
Ticker:
$290.25
Likely Trading Range Today Under (Normal Volatility)
$269.26
Price Upper limit ($) :
$271.38
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$257.52
This week:
$242.09
This month :
$214.19
Other Primary facts
Market Cap:
5.79B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
21.35M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.83%
-13.21%
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:
$327.84
$300.82
$212.16
$239.18
Medium risk (<10%) entry points
Buy Call
Sell Call
$292.03
Buy Put:
Sell Put:
$286.27
$247.89
$253.73
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VMI
Sharpe Ratio:
4.73%
Comparison:
VMI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 1049.63% higher than the industry
& ratio is 107.32% higher than the market/S&P 500 average
Average Returns/Yield of
VMI
Daily returns:
0.12%
Weekly returns:
0.59%
Monthly returns:
2.36%
Yearly returns:
4.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 507.99% above industry average
Classification:
VMI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.43
Statistical test of Returns:
VMI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.31%
Weekly Volatility:
5.16%
Monthly Volatility:
10.32%
Yearly Volatility:
35.76%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.42%
Volatility in last five trading days has been -81.89% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.62%
Weekly VaR:
-10.34%
Monthly VaR:
-20.67%
How Much Can the price of
VMI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-71.61%
This translates to price declining to:
$224.31
This translates to price declining to:
$76.67
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VMI is a 45.89% riskier investment compared to the market/S&P 500 & is 24.99% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.23% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VMI
Beta in relation to market/S&P 500--1.12
Expected beta in 1 year's time:
0.937
Expected beta in 3 year's time:
1.325
Unlevered (debt free) Beta:
0.719
Beta in relation to Nasdaq (XNAS):
0.698
Beta in relation to all global stocks::
0.632
Beta Comparison & Analysis
Beta of competitors/peers::
1.273
Beta is -12.32% lower than peers
Average Industry Beta:
0.865
Beta is 29.07% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.93%
Sustainable growth rate is 9.66% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.175
Alpha is -496.25% below industry average alpha yield
Alpha is 1114% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VMI
Equity cost of capital:
0.108
Equity cost of capital is 18.98% above industry mean WACC
Unlevered (without debt) cost of capital:
6.95%
Before-tax cost of debt:
3.91%
After-tax cost of debt:
3.09%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.09%
WACC is 20.79% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$173.65
Revenue growth rate per share of (3Y):
3.83
Annual revenue growth rate is 248.48% above the industry average
EPS:
$9.44
Expected Annual growth rate of EPS (3Y):
8.62%
Expected future EPS growth rate is -1040.32% lower than the Conglomerates industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 28.50%
Equity growth rate per share is -2277.49% lower than the industry
Debt per share
$51.97
EBITDA per share
$19.26
Valuation Analysis Today of
VMI
P/E Ratio:
26.79
P/E Ratio of Competitors/Peers:
19.1
P/E ratio is 40.31% higher than main peers & is -76.38% lower than the industry
Stock price/value with industry average P/E ratio: $1,070.91
VMI is -74.79% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $47.99
Present value of the expected future dividends only: $32.71
P/S (Price to Sales ratio):
1.55
Price to sales ratio is -5.67% below the industry mean
P/B (Price to book value ratio):
3.83
-
-
Net income growth rate (3Y):
116.98%
Net income growth rate is -123.07% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.23%
Dividend yeild: 0.78%
Previous Dividend: $0.55
Previous adjusted dividend: $0.55
Previous Dividend: $2.10
Expected next dividend best case: $0.59
Expected next dividend worst case: $0.51
Average dividend payment (long-term): $0.48
Average dividend increase/decrease (growth rate) % per period: 4.11%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 22/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 24/06/2022
-
Dividend History:
2022-06-23--$0.55
2021-12-22--$0.50
2021-06-24--$0.50
2022-03-24--$0.55
2021-09-23--$0.50
2021-03-25--$0.50
Dividend growth rate is -117.77% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
73.75%
Net debt to equity ratio:
64.64%
Debt to assets ratio:
30.98%
Net debt to assets ratio:
27.15%
Debt-to-asset ratio is -49.97% below industry average
Ability to repay debt:
Interest coverage ratio:
9.37
Interest coverage ratio is 278.52% more than industry average
Looking forward:
Debt growth rate:
31.50%
Annual debt growth is -523% lower than industry average debt growth rate
Debt repayment rate in last quarter: 6.92%
Analysis of Key Statistics
Correlation of price movement with the market:
0.639
Statistical significance of correlation:
VMI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.578
Stock price is 10.60% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.578
Correlation of price movement with Nasdaq (^IXIC):
0.018
Covariance of price movement with the market:
0.024
Kurtosis
6.112
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:
-0.292
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VMI
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
8.21%
Operating profit margin is 7.06% higher than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
25.05%
Effective tax rate is 48.94% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.49%
Return on equity (ROE) is -29.94% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.67%
Return on assets (ROA) is -3.43% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
2.25
Current ratio is -3.41% below industry average
Cash Conversion Cycle (days):
-11.7
Cash conversion cycle is -127.34% below industry average
The remaining useful life of property plant & equipment is: 5.6 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
335.8K
Each employee generates -17% less revenue than industry average revenue per employee
EBITDA generated per employee:
37.2K
Each employee generates -36% less EBITDA than industry average revenue per employee
Profit generated per employee:
18.4K
Each employee generates -43% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.2K
Each employee generates 61% more free cash flow than industry average revenue per employee
Assets/Capital per employee
157.7K
Each employee generates 61% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VMI
FLOWSERVE CORPORATION (XNYS:FLS)
MAXIMUS, INC. (XNYS:MMS)
Pacific Airport Group, S.A.B. de CV (XNYS:PAC)
ASGN Incorporated (XNYS:ASGN)
HAYWARD HOLDINGS, INC. (XNYS:HAYW)
CURTISS-WRIGHT CORPORATION (XNYS:CW)
TRINET GROUP, INC. (XNYS:TNET)
Southeast Airport Group (XNYS:ASR)
CRANE HOLDINGS, CO. (XNYS:CR)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/26/22
Revenue:
3.71B
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:
2.78B
928.52M
-
-
617.61M
-
-
617.61M
1.11M
43.88M
95.43M
411.27M
304.42M
202.93M
275.61M
69.03M
202.93M
Statement of Cash Flow
Date:
Period:
23.88M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 91929.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
7.84M
Net Cash Provided by Operating Activities:
2.70M
Investments in PP&E:
- 27095.00K
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):
3/26/22
2022
Q1
149.70M
-
149.70M
778.17M
807.47M
105.23M
1.84B
610.22M
-
-
-
-
-
1.74B
-
3.58B
404.41M
12.61M
6.07M
168.79M
232.88M
818.69M
1.11B
148.75M
1.26B
-
2.08B
-
-
- 232160.0K
-
March 26, 2022 at 6:00:00 AM
3.40B
1.50B
3.58B
-
1.12B
972.5M
-
- 2005.00K
- 29100.00K
- 82529.00K
-
-
- 10616.00K
89.62M
- 3521.00K
2.39M
- 27532.00K
149.70M
177.23M
2.70M
- 27095.00K
- 24392.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
VMI
2023
2024
2025
2026
2027
$299.05
$321.48
$345.58
$371.50
$399.36