Spectrum Story

<div class='circular--portrait' style='background:#689CFD;color: #ffffff;font-size:4em;'>SB</div>
SPB -- USA Stock  

USD 56.59  0.49  0.86%

Spectrum Brands Hold is scheduled to announce its earnings today. The next earnings report is expected on the 11th of November 2020. Spectrum Brands Net Income Per Employee is projected to increase significantly based on the last few years of reporting. The past year's Net Income Per Employee was at 15,846.3. The current year Revenue Per Employee is expected to grow to about 402.5 K, whereas Average Assets are forecasted to decline to about 5.5 B. While some of us are becoming more enthusiastic about consumer defensive space, let's go over Spectrum Brands Holdings in greater detail to make a better estimate of its debt utilization. I will address a few possible reasons investors do not currently respect this stock.
Published over a month ago
View all stories for Spectrum Brands | View All Stories
How much will Spectrum Brands owe in August?
Spectrum Brands Hold has 3.11 B in debt with debt to equity (D/E) ratio of 2.55, meaning that Spectrum Brands heavily relies on borrowing funds for operations. The entity has a current ratio of 2.34, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. The company has Net Profit Margin of (6.2) %, which means that it does not effectively control expenditures or properly executes on its pricing strategies. This is way below average. In the same way, it shows Net Operating Margin of 13.82 %, which entails that for every 100 dollars of revenue, it generated 0.14 of operating income.
Spectrum Brands financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Spectrum Brands, including all of Spectrum Brands'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 Spectrum Brands assets, the company is considered highly leveraged. Understanding the composition and structure of overall Spectrum Brands 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 Spectrum Total Debt

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

How important is Spectrum Brands's Liquidity

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

Exercise or conversion by Ehsan Zargar of 13680 shares of Spectrum Brands subject to Rule 16b-3

Legal trades by Spectrum Brands 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:
Spectrum insider trading alert for exercise of restricted stock units by Ehsan Zargar, EVP GC & Corporate Secretary, on 29th of August 2020. This event was filed by Spectrum Brands Holdings with SEC on 2019-11-25. Statement of changes in beneficial ownership - SEC Form 4. Ehsan Zargar currently serves as executive vice president, general counsel, corporate secretary of Spectrum Brands Hold [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.

Detailed Perspective On Spectrum Brands

The current price build-up of Spectrum Brands created some momentum for investors as it was traded today as low as 51.73 and as high as 56.17 per share. The company management teams may have good odds in positioning the company resources to exploit market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.43. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Spectrum Brands Hold partners.

Liabilities Breakdown

Tax Liabilities
895.2 M
Current Liabilities
3.3 B
Long-Term Liabilities
Total Liabilities4.43 Billion
Current Liabilities895.24 Million
Long-Term Liabilities3.29 Billion
Tax Liabilities446.94 Million

Spectrum Brands implied volatility may change after the build-up

Total risk alpha is down to 0.17. It may suggest a possible volatility slip. Spectrum Brands Holdings shows above-average downside volatility for the selected time horizon. We advise investors to inspect Spectrum Brands Holdings further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Spectrum Brands future alpha.

Our Final Take On Spectrum Brands

Whereas some firms within the household & personal products industry are still a little expensive, even after the recent corrections, Spectrum Brands may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor trade any shares of Spectrum Brands at this time. The Spectrum Brands Holdings risk-reward trade off is not appealing enough to do any trading. 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 Spectrum Brands.

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 Spectrum Brands Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com