NL Industries Story

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NL -- USA Stock  

USD 4.74  0.13  2.67%

The stock continues to experience an active upward rally. NL Industries Invested Capital is relatively stable at the moment as compared to the past year. The company's current value of Invested Capital is estimated at 354.68 Million. Invested Capital Average is expected to hike to about 362.5 M this year, although the value of Earnings Before Interest Taxes and Depreciation Amortization EBITDA will most likely fall to nearly 28.3 M. While some baby boomers are getting worried about industrials space, it is reasonable to summarize NL Industries as an investment alternative. We will summarize if it could be a much better year for NL Industries shareholders.
Published over three months ago
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Will new NL Industries (NYSE:NL) debt levels change in two weeks?
The company reports 500 K of total liabilities with total debt to equity ratio (D/E) of 0.0, which may suggest NL Industries is not taking enough advantage from financial leverage. We provide trade recommendation to complement the latest expert consensus on NL Industries. Our dynamic recommendation engine harnesses a multidimensional algorithm to analyze the entity's potential to grow using all technical and fundamental data available at this moment.
NL Industries financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of NL Industries, including all of NL Industries'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 NL Industries assets, the company is considered highly leveraged. Understanding the composition and structure of overall NL Industries 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 NL Industries Total Liabilities

NL Industries liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. NL Industries 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 NL Industries balance sheet include debt obligations and money owed to different NL Industries vendors, workers, and loan providers. Below is the chart of NL Industries short long-term liabilities accounts currently reported on its balance sheet.
You can use NL Industries financial leverage analysis tool to get a better grip on understanding its financial position

How important is NL Industries's Liquidity

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

Breaking it down a bit more

The new price hike of NL Industries may encourage stakeholders to take a closer look at the firm as it is trading at a share price of 4.60 on slow start in trading volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in October. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.51. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the NL Industries partners.

Asset Breakdown

388.3 M
Assets Non Current
Goodwill
151.3 M
Current Assets
Total Assets521.99 Million
Current Assets151.29 Million
Assets Non Current388.32 Million
Goodwill26.41 Million
Tax Assets10,160.53

Are NL Industries technical ratios showing a throwback?

The skewness is down to 0.62 as of today. NL Industries shows above-average downside volatility for the selected time horizon. We advise investors to inspect NL Industries further and ensure that all market timing and asset allocation strategies are consistent with the estimation of NL Industries future alpha.

The Bottom Line

While some companies within the security & protection services industry are still a little expensive, even after the recent corrections, NL Industries may offer a potential longer-term growth to stakeholders. To summarize, as of the 19th of September 2020, our final 30 days 'Buy-vs-Sell' recommendation on the company is Sell. We believe NL Industries is currently overvalued with below average chance of distress for the next two years.

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 NL Industries. Please refer to our Terms of Use for any information regarding our disclosure principles.

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