Gates Story

GTES -- USA Stock

USD 15.00 0.64 4.09%

Macroaxis Story

Gates Industrial is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 8th of February 2021. Gates Industrial Earnings per Diluted Share are relatively stable at the moment as compared to the past year. Gates Industrial reported last year Earnings per Diluted Share of 0.26. As of 02/07/2021, Profit Margin is likely to grow to 0.0248, while Invested Capital is likely to drop slightly above 4.5 B. While some millenniums are indifferent towards industrials space, it makes sense to sum up Gates Industrial as a unique investment alternative.

Published over two weeks ago

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Continue to hold Gates (NYSE:GTES) based on its current debt obligations?

This firm currently holds 3.16 B in liabilities with Debt to Equity (D/E) ratio of 1.07, which is about average as compared to similar companies. The company has a current ratio of 3.07, suggesting that it is liquid enough and is able to pay its financial obligations when due. About 101.0% of the company shares are owned by institutional investors. Gates Industrial has price-to-book (P/B) ratio of 1.63. Some equities with similar Price to Book (P/B) outperform the market in the long run. The entity had not issued any dividends in recent years.

Gates Industrial financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Gates Industrial, including all of Gates Industrial's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Gates Industrial assets, the company is considered highly leveraged. Understanding the composition and structure of overall Gates Industrial debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.

Please read more on our technical analysis page.

Understanding Gates Total Liabilities

Gates Industrial Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Gates Industrial Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Gates Industrial balance sheet include debt obligations and money owed to different Gates Industrial vendors, workers, and loan providers. Below is the chart of Gates short long-term liabilities accounts currently reported on its balance sheet.

You can use Gates Industrial Corp financial leverage analysis tool to get a better grip on understanding its financial position

How important is Gates Industrial's Liquidity

Gates Industrial financial leverage refers to using borrowed capital as a funding source to finance Gates Industrial Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Gates 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 Gates Industrial's total debt and its cash.

Another Deeper Perspective

Gates Industrial reported the previous year's revenue of 2.72 B. Net Income was 74.8 M with profit before overhead, payroll, taxes, and interest of 1.15 B.

Asset Breakdown

5.8 B

Assets Non Current

3.7 B

Goodwill

2 B

Current Assets

	Total Assets	7.79 Billion
	Current Assets	1.99 Billion
	Assets Non Current	5.81 Billion
	Goodwill	3.65 Billion
	Tax Assets	48.39 Million

Gates may start a relapse in March

Value At Risk just dropped to -2.77, may connote upcoming price decrease. Gates Industrial has relatively low volatility with skewness of 0.25 and kurtosis of 0.49. However, we advise all investors to independently investigate Gates Industrial to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Final Take On Gates Industrial

While some other companies within the specialty industrial machinery industry are still a little expensive, even after the recent corrections, Gates Industrial may offer a potential longer-term growth to retail investors. Taking everything into account, as of the 7th of February 2021, our actual 30 days buy-or-sell advice on the enterprise is Strong Hold. We believe Gates Industrial is fairly valued with below average probability of distress for the next two years.

About Contributor

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

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 Vlad Skutelnik do not own shares of Gates Industrial Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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