Stocks to invest in

This is a collection of listed companies with the potential to let you make some money if you invest in them. The companies should have been identified through…
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Stocks to invest in - Others

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The present form of Trane Technologies plc came from its 2020 restructuring to focus on the heating, ventilation, air-conditioning, and related operations. This restructuring was the right move as the company delivered double-digit returns and growth since then. The company is financially sound with improving operating efficiencies. I would rate TT as fundamentally sound. However, there is no margin of safety even when valuing TT based on a 2-stage growth model.
Is Trane Technologies an investment opportunity?
The present form of Trane Technologies plc came from its 2020 restructuring to focus on the heating, ventilation, air-conditioning, and related operations. This restructuring was the right move as the company delivered double-digit returns and growth since then. The company is financially sound with improving operating efficiencies. I would rate TT as fundamentally sound. However, there is no margin of safety even when valuing TT based on a 2-stage growth model.
STLD had announced its plans to venture into the aluminum sector to be funded internally. I valued STLD using a sum-of-part approach. For the aluminum project, I assumed that the STLD would achieve the same performance as the other aluminum companies. On such a basis, I found that there is no margin of safety at the current price. Any margin of safety must come from getting better returns from the aluminum project compared to keeping the USD 2.3 billion as cash and short-term investments.
Is Steel Dynamics an investment opportunity?
STLD had announced its plans to venture into the aluminum sector to be funded internally. I valued STLD using a sum-of-part approach. For the aluminum project, I assumed that the STLD would achieve the same performance as the other aluminum companies. On such a basis, I found that there is no margin of safety at the current price. Any margin of safety must come from getting better returns from the aluminum project compared to keeping the USD 2.3 billion as cash and short-term investments.
Over the past 6 years, Sealed Air Corp’s revenue only grew at 3.1 % CAGR. This was despite having both organic and acquisition growths.  Despite being a low-growth company, SEE was able to deliver double-digit operating returns. It also led its peers when it came to ROA. It may not be a wonderful company when looking at how it performed under its 2018 Reinvent SEE strategy. But this was looking at improvements from a high starting bar. There is currently more than a 30% margin of safety.
Is Sealed Air Corp an investment opportunity?
Over the past 6 years, Sealed Air Corp’s revenue only grew at 3.1 % CAGR. This was despite having both organic and acquisition growths. Despite being a low-growth company, SEE was able to deliver double-digit operating returns. It also led its peers when it came to ROA. It may not be a wonderful company when looking at how it performed under its 2018 Reinvent SEE strategy. But this was looking at improvements from a high starting bar. There is currently more than a 30% margin of safety.
PGT Innovations revenue has grown by about 5-fold over the past 10 years. However, this growth was driven more by acquisitions than organic growth. Moreover, the growth was at an unsustainable Reinvestment rate. At the same time, while bigger, there were hardly any improvements in the operating efficiencies. PGTI is now being acquired by Miter Brands at USD 42 per share to be paid in cash. I estimated that at this price, there is a margin of safety for Miter Brands.
Is PGT Innovations an investment opportunity
PGT Innovations revenue has grown by about 5-fold over the past 10 years. However, this growth was driven more by acquisitions than organic growth. Moreover, the growth was at an unsustainable Reinvestment rate. At the same time, while bigger, there were hardly any improvements in the operating efficiencies. PGTI is now being acquired by Miter Brands at USD 42 per share to be paid in cash. I estimated that at this price, there is a margin of safety for Miter Brands.
Mueller Industries achieved extraordinary profit growth over the past 8 years. But these growths were driven by extraordinary copper and aluminum prices over the past 3 years. Ignoring these price growths, there was no organic growth. Growth seemed to be from its acquisitions. While I would not rate its operations as wonderful, it is a cash cow and financially strong. However, there is no margin of safety based on its performance over both the Housing Starts and product price cycle.
Is Mueller Industries an investment opportunity?
Mueller Industries achieved extraordinary profit growth over the past 8 years. But these growths were driven by extraordinary copper and aluminum prices over the past 3 years. Ignoring these price growths, there was no organic growth. Growth seemed to be from its acquisitions. While I would not rate its operations as wonderful, it is a cash cow and financially strong. However, there is no margin of safety based on its performance over both the Housing Starts and product price cycle.
Over the past decade, Core Molding Technologies’s revenue and earnings more than doubled. However, this growth rate is not sustainable. There was no significant improvement in operating efficiencies over the past decade. But it is financially strong so there is a performance gap. CMT is a cyclical company and a valuation based on its performance over the cycle did not show any margin of safety. Its performance gap and poor margin of safety meant that this is not an investment opportunity.
Is Core Molding Technologies an investment opportunity?
Over the past decade, Core Molding Technologies’s revenue and earnings more than doubled. However, this growth rate is not sustainable. There was no significant improvement in operating efficiencies over the past decade. But it is financially strong so there is a performance gap. CMT is a cyclical company and a valuation based on its performance over the cycle did not show any margin of safety. Its performance gap and poor margin of safety meant that this is not an investment opportunity.
Century Aluminum is a cyclical company in a low-growth sector. At the same time, more than 2/3 of its sales are to its controlling shareholder, Glencore. This is a company with poor fundamentals. Its returns are lower than its cost of funds. It also faced declining operating performance. All points to a company that needs to be turned around. Together with its negative Earnings Power Value due to the low returns, I would not consider this an investment opportunity.
Is Centure Aluminum an investment opportunity?
Century Aluminum is a cyclical company in a low-growth sector. At the same time, more than 2/3 of its sales are to its controlling shareholder, Glencore. This is a company with poor fundamentals. Its returns are lower than its cost of funds. It also faced declining operating performance. All points to a company that needs to be turned around. Together with its negative Earnings Power Value due to the low returns, I would not consider this an investment opportunity.
WestRock revenue grew at 7.8 % CAGR over the past 9 years. This was due to a combination of organic growth, acquisitions and past 2 years high product price tailwinds. At the same time, it incurred significant goodwill impairments. This suggests issues with its ability to negotiate good prices for the acquisitions. While there are signs of operating improvements, this has yet to translate into better returns. In addition to these fundamental issues, there is not enough margin of safety. Company Financials, Dividend Investing, Listed Company, Money Strategy, Fundamental Analysis, Behavioral Issues, Business Analysis, Investing In Stocks, Asset Management
Westrock
WestRock revenue grew at 7.8 % CAGR over the past 9 years. This was due to a combination of organic growth, acquisitions and past 2 years high product price tailwinds. At the same time, it incurred significant goodwill impairments. This suggests issues with its ability to negotiate good prices for the acquisitions. While there are signs of operating improvements, this has yet to translate into better returns. In addition to these fundamental issues, there is not enough margin of safety.
Tempur Sealy (TPX) is a leading bedding company in the US. In its announcement on the acquisition of Mattress Firm, TPX projected annual run rate synergies of at least USD 100 million by year 4. But TPX did not deliver revenue growth or improved margins for its past 2 major acquisitions. So I have concerns about it achieving the USD 100 million synergies. A valuation of TPX even assuming full achievement of the USD 100 million suggests that there is currently no margin of safety. Value Investing, Technical Analysis, Revenue Growth, Sealy
Tempur Sealy acquires Mattress Firm
Tempur Sealy (TPX) is a leading bedding company in the US. In its announcement on the acquisition of Mattress Firm, TPX projected annual run rate synergies of at least USD 100 million by year 4. But TPX did not deliver revenue growth or improved margins for its past 2 major acquisitions. So I have concerns about it achieving the USD 100 million synergies. A valuation of TPX even assuming full achievement of the USD 100 million suggests that there is currently no margin of safety.
SKG is fundamentally sound. Its returns are greater than its cost of funds and there are signs of improving operating efficiencies. The challenge is that there is not enough margin of safety at the current price based on historical results. This is set to change with the proposed acquisition of WestRock that would double the size of SKG. There would be a margin of safety if SKG could improve WestRock's operations making SKG an investment opportunity. Investment Books, Intrinsic Value, Stock Exchange, Stock Trading
Smurfit Kappa (SKG)
SKG is fundamentally sound. Its returns are greater than its cost of funds and there are signs of improving operating efficiencies. The challenge is that there is not enough margin of safety at the current price based on historical results. This is set to change with the proposed acquisition of WestRock that would double the size of SKG. There would be a margin of safety if SKG could improve WestRock's operations making SKG an investment opportunity.
Over the past 8 years, Sleep Number revenue grew at 11.1 % CAGR. But this was driven more by price growth than volume growth. In this context, I would not consider SNBR a high-growth company. From a fundamental perspective, the company is an average performer. There were both plusses and minuses in the performances of the various metrics. But I believe there is more than a 30 % margin of safety even when valuing SNBR based on the Earnings Power Value Growth Company, Fixed Cost
Sleep Number
Over the past 8 years, Sleep Number revenue grew at 11.1 % CAGR. But this was driven more by price growth than volume growth. In this context, I would not consider SNBR a high-growth company. From a fundamental perspective, the company is an average performer. There were both plusses and minuses in the performances of the various metrics. But I believe there is more than a 30 % margin of safety even when valuing SNBR based on the Earnings Power Value
Simpson Manufacturing Co is a fundamentally sound company. Over the past 12 years, it has been able to improve its returns. Apart from growing revenue, there were improving operating efficiencies. It achieved growth mainly through acquisitions. The company is also financially sound with a good capital allocation plan. These will support its acquisitions. Unfortunately, there is not enough margin of safety even when valuing it using a 2-stage-growth model. Sound Company, Grow Revenue
Simpson Manufacturing
Simpson Manufacturing Co is a fundamentally sound company. Over the past 12 years, it has been able to improve its returns. Apart from growing revenue, there were improving operating efficiencies. It achieved growth mainly through acquisitions. The company is also financially sound with a good capital allocation plan. These will support its acquisitions. Unfortunately, there is not enough margin of safety even when valuing it using a 2-stage-growth model.
Carpenter Technology is not a growth company. Over the past 11 years, its revenue only grew at 1.2 % CAGR. Sales volume declined. Its earnings have been very volatile and I have concerns about its business fundamentals. The company has set a goal to double the 2019 operating profits by 2027. However, it did not have a track record of improving capital efficiency. It is a cyclical company and my valuation on such a basis showed that there is no margin of safety.
Carpenter Technology
Carpenter Technology is not a growth company. Over the past 11 years, its revenue only grew at 1.2 % CAGR. Sales volume declined. Its earnings have been very volatile and I have concerns about its business fundamentals. The company has set a goal to double the 2019 operating profits by 2027. However, it did not have a track record of improving capital efficiency. It is a cyclical company and my valuation on such a basis showed that there is no margin of safety.
BlueLinx did not achieve any revenue growth over the 2005 to 2023 peak-to-peak Housing Starts cycle. The company is fundamentally sound with improving margins and returns. The Housing Starts currently is at the long-term annual average level. As such BlueLinx’s Sep 2023 LTM performance represents its performance over the cycle. Based on this and assuming that the company can continue to deliver 5% improved operations and a 5% lower WACC, there is a 30 % margin of safety. Peak To Peak
BlueLinx
BlueLinx did not achieve any revenue growth over the 2005 to 2023 peak-to-peak Housing Starts cycle. The company is fundamentally sound with improving margins and returns. The Housing Starts currently is at the long-term annual average level. As such BlueLinx’s Sep 2023 LTM performance represents its performance over the cycle. Based on this and assuming that the company can continue to deliver 5% improved operations and a 5% lower WACC, there is a 30 % margin of safety.
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Tredegar has undergone a business transition, shifting from mainly a plastic company to mainly an aluminum extrusion company. The company has shown improving operating efficiencies and financial soundness, with a low reinvestment rate and good capital allocation. However, the company operates in a cyclical sector and current valuations do not offer enough margin of safety. But the declining market price may present an opportunity later. Plastic Company
Tredegar
Tredegar has undergone a business transition, shifting from mainly a plastic company to mainly an aluminum extrusion company. The company has shown improving operating efficiencies and financial soundness, with a low reinvestment rate and good capital allocation. However, the company operates in a cyclical sector and current valuations do not offer enough margin of safety. But the declining market price may present an opportunity later.
Ternium is a South American steel company. Although it has some mining operations, these serve mainly in-house and are a small component relative to the steel output. It achieved revenue and profit growth through organic growth and acquisitions over the past 11 years. It has a strong financial position and a good capital allocation plan, creating value for shareholders. A Valuation based on the steel price cycle shows a sufficient margin of safety, making it an investment opportunity. Financial Position
Ternium
Ternium is a South American steel company. Although it has some mining operations, these serve mainly in-house and are a small component relative to the steel output. It achieved revenue and profit growth through organic growth and acquisitions over the past 11 years. It has a strong financial position and a good capital allocation plan, creating value for shareholders. A Valuation based on the steel price cycle shows a sufficient margin of safety, making it an investment opportunity.
SLGN is a leading manufacturer of sustainable rigid packaging solutions for the world. Its revenue and earnings have grown through acquisitions and price growth, rather than organic growth or volume growth. It has a high debt-equity ratio and no signs of strong fundamentals as there were no uptrends in ROE and operating parameters. There is no margin of safety at the current high product selling prices. With an unsustainable Reinvestment rate, it is not an investment opportunity. Debt Equity, Debt To Equity Ratio
Silgan (SLGN)
SLGN is a leading manufacturer of sustainable rigid packaging solutions for the world. Its revenue and earnings have grown through acquisitions and price growth, rather than organic growth or volume growth. It has a high debt-equity ratio and no signs of strong fundamentals as there were no uptrends in ROE and operating parameters. There is no margin of safety at the current high product selling prices. With an unsustainable Reinvestment rate, it is not an investment opportunity.
Boise Cascade or BCC is one of the largest producers of engineered wood products and plywood in North America. Its growth in PAT over the past decade was driven mostly by the past 2 years' outlier product prices, which have since declined. The company is fundamentally sound with strong financials. BCC is a cyclical company heavily influenced by the housing sector, and valuations based on probability-weighting the outlier prices show no margin of safety. Boise Cascade
Boise Cascade
Boise Cascade or BCC is one of the largest producers of engineered wood products and plywood in North America. Its growth in PAT over the past decade was driven mostly by the past 2 years' outlier product prices, which have since declined. The company is fundamentally sound with strong financials. BCC is a cyclical company heavily influenced by the housing sector, and valuations based on probability-weighting the outlier prices show no margin of safety.
Avery is a global materials science and digital identification solutions company. Despite its acquisitions, its revenue only grew at 4.4% CAGR over the past 10 years. As such, productivity and efficiency improvements may be more important for growth. While ROE and net margins have been trending up, there were no improvements in other operating parameters, but the company is fundamentally sound. I think that the stock is fully priced
Avery Dennison
Avery is a global materials science and digital identification solutions company. Despite its acquisitions, its revenue only grew at 4.4% CAGR over the past 10 years. As such, productivity and efficiency improvements may be more important for growth. While ROE and net margins have been trending up, there were no improvements in other operating parameters, but the company is fundamentally sound. I think that the stock is fully priced
Aptar is a global leader in drug delivery, consumer product dispensing, and active material science solutions. It achieved revenue and profit growth over the past 11 years, but its ROE in 2022 was what it was in 2012. This was because its operating efficiencies have been declining. Its historical Reinvestment rate was also much higher than the fundamental rate. Despite its financial strength and good capital allocation, there is no margin of safety at the current price.
Aptar
Aptar is a global leader in drug delivery, consumer product dispensing, and active material science solutions. It achieved revenue and profit growth over the past 11 years, but its ROE in 2022 was what it was in 2012. This was because its operating efficiencies have been declining. Its historical Reinvestment rate was also much higher than the fundamental rate. Despite its financial strength and good capital allocation, there is no margin of safety at the current price.
WMS is the leading manufacturer of innovative water management solutions. WMS achieved 12.7% CAGR revenue growth over the past 9 years, driven by acquisitions and the past 2 years of high product prices. This led to growing ROE and gross profitability. The growth in revenue and profitability is not sustainable. I also have concerns about the company's financial strengths. A valuation assuming that the high price situation persists did not provide a margin of safety Water Management
Advance Drainage (WMS)
WMS is the leading manufacturer of innovative water management solutions. WMS achieved 12.7% CAGR revenue growth over the past 9 years, driven by acquisitions and the past 2 years of high product prices. This led to growing ROE and gross profitability. The growth in revenue and profitability is not sustainable. I also have concerns about the company's financial strengths. A valuation assuming that the high price situation persists did not provide a margin of safety
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The Buyer's Guide to the KB Home Design Studio
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