Applied Story

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AIT -- USA Stock  

USD 54.72  0.18  0.33%

As many rational traders are trying to avoid industrials space, it makes sense to review Applied Industrial a little further and understand how it stands against Fastenal and other similar entities. We are going to break down some of the competitive aspects of both Applied and Fastenal.
Published over a month ago
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Should I short all of Fastenal and Applied?
By analyzing existing forward indicators between Applied Industrial and Fastenal, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Fastenal with a short position in Applied Industrial. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Applied Industrial has an asset utilization ratio of 569.67 percent. This implies that the company is making $5.7 for each dollar of assets. An increasing asset utilization means that Applied Industrial is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Applied or Fastenal is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

UNDERSTANDING Applied Industrial dividends

A dividend is the distribution of a portion of Applied Industrial earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Applied Industrial dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Applied one year expected dividend income is about $0.83 per share.
Dividend Yield is likely to gain to 0.0182 in 2020, whereas Payment of Dividends and Other Cash Distributions is likely to drop (52.7 M) in 2020.
Last ReportedProjected for 2020
Payment of Dividends and Other Cash Distributions-48.9 M-52.7 M
Dividend Yield 0.018  0.0182 
Dividends per Basic Common Share 1.26  1.24 
Investing in dividend-paying stocks, such as Applied Industrial is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Applied Industrial must own a stock before its ex-dividend date to receive its next dividend. This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Applied Industrial. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

How important is Applied Industrial's Liquidity

Applied Industrial financial leverage refers to using borrowed capital as a funding source to finance Applied Industrial ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Applied Industrial financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Applied Industrial's total debt and its cash.

Correlation Between Applied and Fastenal

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Applied Industrial together with similar or unrelated positions with a negative correlation. For example, you can also add Fastenal to your portfolio. If Fastenal is not perfectly correlated to Applied Industrial it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Applied Industrial for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between AIT and FAST for more information.

Breaking down the case for Applied Industrial

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me take a closer look at Applied Industrial revenue. Based on the latest financial disclosure, Applied Industrial reported 3.4 B of revenue. This is 2.82% lower than that of the Industrials sector and 7.26% lower than that of the Industrial Distribution industry. The revenue for all United States stocks is 63.96% higher than that of the firm. As for Fastenal we see revenue of 5.53 B, which is 50.85% higher than that of the Industrial Distribution

Applied3.4 Billion
Sector3.5 Billion
Fastenal5.53 Billion
3.4 B
3.5 B
5.5 B

Momentum Analysis of Applied Industrial suggests possible reversal in September

The market risk adjusted performance is down to 0.25 as of today. As of the 12th of August 2020, Applied Industrial shows the Mean Deviation of 2.31, risk adjusted performance of 0.2182, and Downside Deviation of 3.2. Applied Industrial technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to collect and analyze data for nineteen technical drivers for Applied Industrial, which can be compared to its rivals. Please confirm Applied Industrial coefficient of variation, treynor ratio, as well as the relationship between the Treynor Ratio and semi variance to decide if Applied Industrial is priced correctly, providing market reflects its regular price of 69.05 per share. Given that Applied Industrial has jensen alpha of 0.0784, we suggest you to validate Applied Industrial's prevailing market performance to make sure the company can sustain itself at a future point.

The Current Takeaway on Applied Industrial Investment

Whereas some firms under the industrial distribution industry are still a bit expensive, Applied Industrial may offer a potential longer-term growth to private investors. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to quit some or all of your Applied Industrial holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Applied Industrial.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Applied Industrial. Please refer to our Terms of Use for any information regarding our disclosure principles.

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