Valhi Story

<div class='circular--portrait' style='background:#000000;color: #f2f2f2;font-size:3em;'>VHI</div>
VHI -- USA Stock  

USD 19.08  0.20  1.06%

Valhi Earnings Before Interest Taxes and Depreciation Amortization EBITDA are most likely to decrease significantly in the upcoming years. The last year's value of Earnings Before Interest Taxes and Depreciation Amortization EBITDA was reported at 202.3 Million. The current Average Equity is estimated to increase to about 538.6 M, while Revenue Per Employee is projected to decrease to roughly 789.7 K. The primary intention for this outlook is to break down Valhi potential for December. We are going to examine if Valhi is reasonably priced going into December.
Published over three weeks ago
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Are Valhi (NYSE:VHI) stockholders starting to hold back?
The company has a beta of 0.1957. Let's try to break down what Valhi'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, Valhi will likely underperform. The beta indicator helps investors understand whether Valhi moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Valhi deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Valhi Inc. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Valhi


How important is Valhi's Liquidity

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

How Valhi utilizes its cash?

To perform a cash flow analysis of Valhi, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Valhi is receiving and how much cash it distributes out in a given period. The Valhi cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Valhi 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 177.2 Million

Purchase by Robert Graham of tradable shares of Valhi

Legal trades by Valhi 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:
Valhi insider trading alert for perchase of common stock $0.01 par value per share by Robert Graham, President and CEO, on 17th of November 2020. This event was filed by Valhi Inc with SEC on 2020-11-17. Statement of changes in beneficial ownership - SEC Form 4. Robert Graham currently serves as executive vp, executive vp of timet - sub, general counsel of kronos worldwide - sub, general counsel of nl - sub, secretary of kronos worldwide - sub, vp of kronos worldwide - sub, vp- contran-hol, secretary of nl - sub and vp of nl - sub of Valhi Inc [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 down the case for Valhi

Valhi Inc currently demonstrates below-verage downside deviation. It has Information Ratio of 0.12 and Jensen Alpha of 0.44. However, we do advice investors to further question Valhi Inc expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Returns Breakdown

2.08
Return on Assets
10.2
Return on Equity
Return on Investment13.07
Return on Assets2.08
Return on Equity10.2
Return Capital0.009442
Return on Sales0.0177

Valhi is epected to finish above $13.31 in December

The value at risk is down to -3.91 as of today. As of the 7th of November, Valhi has the Risk Adjusted Performance of 0.1582, semi deviation of 2.2, and Coefficient Of Variation of 764.55. In relation to fundamental indicators, the technical analysis model makes it possible for you to check existing technical drivers of Valhi Inc, as well as the relationship between them. In other words, you can use this information to find out if the company will indeed mirror its model of past prices and volume data, or the prices will eventually revert. We were able to collect and analyze data for nineteen technical drivers for Valhi Inc, which can be compared to its competition. Please validate Valhi Inc standard deviation, maximum drawdown, as well as the relationship between the Maximum Drawdown and expected short fall to decide if Valhi is priced more or less accurately, providing market reflects its prevalent price of 13.58 per share. Given that Valhi Inc has jensen alpha of 0.4434, we advise you to double-check Valhi Inc's current market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Valhi

While some companies within the chemicals industry are still a little expensive, even after the recent corrections, Valhi may offer a potential longer-term growth to stockholders. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither purchase new shares of Valhi nor exit your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. 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 Valhi.

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 Valhi Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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