Kadant Story

<div class='circular--portrait' style='background:#800000;color: #F8F8FF;font-size:3em;'>KAI</div>
KAI -- USA Stock  

USD 107.18  0.64  0.59%

As many baby boomers are still indifferent towards industrials space, it makes sense to concentrate on Kadant Inc. What exactly are Kadant shareholders getting in August? Is the entity current valuation justified? We will cover the stock valuation to give you a better outlook on taking a position in the stock.
Published over a month ago
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Is Kadant (NYSE:KAI) ready for a correction?
Kadant has 296.65 M in debt with debt to equity (D/E) ratio of 0.7, which is OK given its current industry classification. This firm has 296.65 M in debt with debt to equity (D/E) ratio of 0.7, which is OK given its current industry classification. The company has a current ratio of 2.17, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. On a scale of 0 to 100, Kadant holds a performance score of 10. The company secures a Beta (Market Risk) of 1.5849, which conveys a somewhat significant risk relative to the market. Let's try to break down what Kadant's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Kadant will likely underperform. Although it is vital to follow Kadant Inc price patterns, it is good to be conservative about what you can do with the information regarding equity historical price patterns. The philosophy towards estimating future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Kadant Inc technical indicators, you can presently evaluate if the expected return of 0.49% will be sustainable into the future. Please exercises Kadant Inc coefficient of variation, maximum drawdown, skewness, as well as the relationship between the total risk alpha and downside variance to make a quick decision on whether Kadant Inc current price movements will revert.
We determine the current worth of Kadant Inc using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Kadant Inc based exclusively on its fundamental and basic technical indicators. By analyzing Kadant's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Kadant's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Kadant. We calculate exposure to Kadant's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Kadant's related companies.

Kadant Inc Investment Alerts

Kadant investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Kadant Inc performance across your portfolios.Please check all investment alerts for Kadant

Kadant Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Kadant value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Kadant competition to find correlations between indicators driving the intrinsic value of Kadant.

How Kadant utilizes its cash?

To perform a cash flow analysis of Kadant, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Kadant is receiving and how much cash it distributes out in a given period. The Kadant cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Kadant Net Cash Flow from Operations is most likely to increase significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at 51 Million

Sale by John Albertine of 3500 shares of Kadant

Legal trades by Kadant insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Kadant insider trading alert for sale of common stock by John Albertine, the corporate stakeholder, on 25th of September 2020. This event was filed by Kadant Inc with SEC on 2020-09-25. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down a bit more

Kadant Inc reported the last year's revenue of 692.45 M. Total Income to common stockholders was 53.7 M with profit before taxes, overhead, and interest of 290.21 M.

Margins Breakdown

Kadant profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Kadant itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Kadant profit margins.
Operating Margin10.14
EBITDA Margin0.15
Gross Margin0.49
Profit Margin0.0811


Kadant Earnings Before Interest Taxes and Depreciation Amortization EBITDA is nearly stable at the moment. Further, Kadant Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 6 years.

Our Kadant analysis implies possible reversion in August

The sortino ratio is down to 0.17 as of today. Kadant Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Kadant Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Kadant future alpha.

Our Final Takeaway

While some other firms under the specialty industrial machinery industry are still a bit expensive, Kadant may offer a potential longer-term growth to stockholders. The bottom line, as of the 28th of July 2020, we believe Kadant is currently overvalued. It responds to the market and projects low chance of financial distress in the next two years. However, our primary 30 days buy vs. sell advice on the company is Strong Buy.

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 Raphi Shpitalnik do not own shares of Kadant Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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