Quanex Story

NX -- USA Stock

USD 25.20 0.15 0.60%

Macroaxis Story

It looks like Armstrong Flooring will continue to recover faster as its price went down 2.02% today to Quanex Building's 0.55%. As many rational traders are trying to avoid industrials space, it makes sense to break down Quanex Building Products a little further and understand how it stands against Armstrong Flooring and other similar entities. We are going to inspect some of the competitive aspects of both Quanex and Armstrong.

Published over a month ago

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Should we be acquiring Armstrong or Quanex Building?

By analyzing existing technical and fundamental indicators between Quanex Building and Armstrong, 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 Armstrong with a short position in Quanex Building. 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. Quanex Building has an asset utilization ratio of 107.2 percent. This suggests that the company is making $1.07 for each dollar of assets. An increasing asset utilization means that Quanex Building Products 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 Quanex or Armstrong is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

UNDERSTANDING Quanex Building dividends

A dividend is the distribution of a portion of Quanex Building 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. Quanex Building 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. Quanex one year expected dividend income is about $0.16 per share.

Payment of Dividends and Other Cash Distributions is likely to drop to about (10.2 M) in 2021. Dividend Yield is likely to drop to 0.0172 in 2021.

	Last Reported	Projected for 2021
Payment of Dividends and Other Cash Distributions	-9.5 M	-10.2 M
Dividend Yield	0.0207	0.0172
Dividends per Basic Common Share	0.37	0.31

Investing in dividend-paying stocks, such as Quanex Building Products is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Quanex Building 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 Quanex Building. 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 Quanex Building's Liquidity

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

Correlation Between Quanex and Armstrong Flooring

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 Quanex Building together with similar or unrelated positions with a negative correlation. For example, you can also add Armstrong Flooring to your portfolio. If Armstrong Flooring is not perfectly correlated to Quanex Building 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 Quanex Building 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 NX and AFI for more information.

Note

Are you currently holding both Quanex Building and Armstrong Flooring in your portfolio? Please note if you are using this as a pair-trade strategy between Quanex Building and Armstrong Flooring, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Exercise or conversion by Scott Zuehlke of 8300 shares of Quanex Building subject to Rule 16b-3

Legal trades by Quanex Building 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:

Quanex insider trading alert for exercise of stock options (right to buy) by Scott Zuehlke, Senior VP CFO & Treasurer, on 15th of January 2021. This event was filed by Quanex Building Products with SEC on 2021-01-15. Statement of changes in beneficial ownership - SEC Form 4. Scott Zuehlke currently serves as interim chief financial officer, vice president -investor relations, treasurer of Quanex Building Prod [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.

What is driving Quanex Building Investor Appetite?

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

Now, let's check Quanex Building revenue. Based on the latest financial disclosure, Quanex Building Products reported 836.54 M of revenue. This is 76.09% lower than that of the Industrials sector and significantly higher than that of the Building Products & Equipment industry. The revenue for all United States stocks is 91.13% higher than that of the firm. As for Armstrong Flooring we see revenue of 582.2 M, which is much higher than that of the Building Products & Equipment

	Quanex	836.54 Million
	Sector	0.0
	Armstrong	582.2 Million

836.5 M

Quanex

Sector

582.2 M

Armstrong

Quanex Building is projected to stay under $22 in January

Treynor ratio is down to 4.32. It may suggest a possible volatility slide. As of the 10th of December, Quanex Building holds the Risk Adjusted Performance of 0.1696, semi deviation of 1.84, and Coefficient Of Variation of 691.83. Compared to fundamental indicators, the technical analysis model allows you to check existing technical drivers of Quanex Building, as well as the relationship between them. Put it differently, you can use this information to find out if the company will indeed mirror its model of past market data, or the prices will eventually revert. We were able to analyze and collect data for nineteen technical drivers for Quanex Building Prod, which can be compared to its competitors. Please check Quanex Building Prod market risk adjusted performance, variance, as well as the relationship between the Variance and potential upside to decide if Quanex Building Prod is priced some-what accurately, providing market reflects its current price of 21.86 per share. Given that Quanex Building has jensen alpha of 0.2808, we recommend you to check out Quanex Building Prod's recent market performance to make sure the company can sustain itself at a future point.

Our Final Perspective on Quanex Building

While many other companies under the building products & equipment industry are still a bit expensive, Quanex Building may offer a potential longer-term growth to investors. To conclude, as of the 10th of December 2020, we believe that at this point, Quanex Building is very steady with low chance of financial distress within the next 2 years. From a slightly different point of view, the entity appears to be fairly valued. Our ongoing 30 days advice on the company is Strong Hold.

About Contributor

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in 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 Ellen Johnson do not own shares of Quanex Building Products. Please refer to our Terms of Use for any information regarding our disclosure principles.

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