Is Anixter International Undervalued?

Anixter International Free Cash Flow is expected to increase significantly based on the last few years of reporting. The past year's Free Cash Flow was at 187.9 Million. The current year Market Capitalization is expected to grow to about 3.3 B, whereas Revenue Per Employee is expected to decline to about 881.8 K. Anixter International is scheduled to anounce its earnings . Next fiscal quarter end is expected on the 30th of June 2020. The stock experiences delisting process. Anixter International was delisted on 22nd of June 2020. As many millenniums are trying to avoid wholesale, it makes sense to digest Anixter International a little further and try to understand its current market patterns. We will analyze why Anixter International investors may still consider a stake in the business. What is Anixter International chance of financial distress for July 2020? We consider Anixter International very steady. Anixter International secures Sharpe Ratio (or Efficiency) of 0.2, which signifies that the company had 0.2% of return per unit of risk over the last 1 month. Our philosophy towards foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Anixter International, which you can use to evaluate future volatility of the firm. Please confirm Anixter International mean deviation of 1.02, risk adjusted performance of 0.4427, and downside deviation of 1.4 to double-check if the risk estimate we provide is consistent with the expected return of 0.15%.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Anixter International has 1.34 B in debt with debt to equity (D/E) ratio of 76.6, demonstrating that the entity may be unable to create cash to meet all of its financial commitments. The entity has a current ratio of 1.87, which is typical for the industry and considered as normal. Anixter International is UNDERVALUED at 102.99 per share with modest projections ahead. Lets now check Anixter International Cash per Share. In accordance with recently published financial statements Anixter International has Cash per Share of 5.05 times. This is 74.74% higher than that of the Industrials sector, and 234.44% higher than that of Industrial Distribution industry, This indicator is about the same for all stocks average (which is currently at 5.01).
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 entities, such as Victory or USCF is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

Correlation Between Victory and USCF Gold Strategy

In general, Fund analysis is a method for investors and traders to make individual buying and selling decisions. Mutual Fund 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 Victory Sycamore together with similar or unrelated positions with a negative correlation. For example, you can also add USCF Gold to your portfolio. If USCF Gold is not perfectly correlated to Victory Sycamore 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 Victory Sycamore, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Victory Sycamore and USCF Gold in your portfolio? Please note if you are using this as a pair-trade strategy between Victory Sycamore and USCF Gold, 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. Please check pair correlation details between VSOYX and USG for more information.

Sector Allocation

Exchange-Traded Funds use many different techniques to achieve diversification. One of the ways Victory Sycamore ETF is managing risk is by picking assets from different sectors and across various asset classes. It helps to ensure that returns are uncorrelated, and risk is spread across the underlying asset classes and industries. Within the same asset class, diversification can be achieved by investing in various investment styles through cross-sector allocation. Below map breaks down Victory Sycamore sector allocation.
Volatility

Instrument Allocation

The asset allocation of funds such as Victory Sycamore usually varies among a different mix of asset classes. Balanced mutual funds invest not only in bonds, which focus primarily on income, and stocks, which aim for investment growth, but also keep some reserve in cash or even exotic instruments. Below we show the current asset allocation of Victory Sycamore Small
Details

Details

The company reported last year revenue of 8.71 B. Total Income to common stockholders was 203.7 M with profit before taxes, overhead, and interest of 1.66 B. The firm has a beta of 0.2594. Let's try to break down what Anixter'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, Anixter International will likely underperform. The beta indicator helps investors understand whether Anixter International 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 Anixter deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. Anixter International reported last year revenue of 8.71 B. Total Income to common stockholders was 203.7 M with profit before taxes, overhead, and interest of 1.66 B. Anixter International Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 4 years. The ongoing value of Anixter International Earnings Before Interest Taxes and Depreciation Amortization USD is 373,315,789. Moreover, Anixter International Net Income Per Employee is increasing over the last 5 years. The ongoing value of Anixter International Net Income Per Employee is 26,562.
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Our Conclusion on Anixter International

While many of the other players under industrial distribution industry are still a little expensive, even after the recent corrections, Anixter International may offer a potential longer-term growth to investors. Taking everything into account, as of 24th of June 2020, our analysis shows that Anixter International slowly supersedes the market. The firm is undervalued and projects low chance of financial distress for the next 2 years. Our primary 30 days 'Buy/Hold/Sell' recommendation on the firm is Strong Buy. With an optimistic outlook on your 30 days horizon, it may be a good time to take in new shares of Anixter or increase your existing holdings in the Stock as it seems the potential growth 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 Anixter International.

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Editorial Staff

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