Encore Stock Story


USD 124.98  4.23  3.50%   

While some of us are excited about industrials space, it makes sense to digest Encore Wire Cp in greater detail to make a better assessment of its actual value. We will evaluate if Encore Wire shares are reasonably priced going into August. What is Encore Wire valuation so far in 2022? We are going to cover the firm perspective on valuation to give investors a better transparency on taking a position in it.
Published over two weeks ago
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Is Encore Wire growth trend slowing down?

As of July 25, 2022, Long Term Debt to Equity is expected to decline to 0.29. In addition to that, Average Equity is expected to decline to about 404.6 MThe entity has a current ratio of 6.08, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Encore Wire until it has trouble settling it off, either with new capital or with free cash flow. So, Encore Wire's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Encore Wire Cp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Encore to invest in growth at high rates of return. When we think about Encore Wire's use of debt, we should always consider it together with cash and equity.
Encore Wire has a performance score of 3 on a scale of 0 to 100. The firm shows a Beta (market volatility) of 1.5371, which means a somewhat significant risk relative to the market. Let's try to break down what Encore'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, Encore Wire will likely underperform. Although it is important to respect Encore Wire Cp historical returns, it is better to be realistic regarding the information on the equity's current trending patterns. The philosophy in predicting future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By reviewing Encore Wire Cp technical indicators, you can presently evaluate if the expected return of 0.15% will be sustainable into the future. Encore Wire Cp right now shows a risk of 3.59%. Please confirm Encore Wire Cp information ratio, as well as the relationship between the potential upside and kurtosis to decide if Encore Wire Cp will be following its price patterns.
We determine the current worth of Encore Wire Cp using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Encore Wire Cp based exclusively on its fundamental and basic technical indicators. By analyzing Encore Wire's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Encore Wire's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Encore Wire. We calculate exposure to Encore Wire's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Encore Wire's related companies.

Encore Wire Cp Investment Alerts

Encore investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Encore Wire Cp performance across your portfolios.Please check all investment alerts for Encore

Encore Wire Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Encore value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Encore Wire competition to find correlations between indicators driving the intrinsic value of Encore.

How does Encore utilize its cash?

To perform a cash flow analysis of Encore Wire, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Encore Wire is receiving and how much cash it distributes out in a given period. The Encore Wire cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Encore Wire Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 418.42 Million

A Deeper Perspective

The firm reported the previous year's revenue of 2.87 B. Net Income was 661.76 M with profit before overhead, payroll, taxes, and interest of 867.75 M.
 2010 2011 2021 2022 (projected)
Long Term Debt to Equity0.
Interest Coverage77.24919.01827.11892.41

Margins Breakdown

Encore profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Encore Wire itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Encore Wire profit margins.
Profit Margin
Operating Margin
Operating Margin29.1
EBITDA Margin29.1
Gross Margin36.11
Profit Margin22.53

Encore Wire Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. Further, Encore Wire Revenue Per Employee is rather stable at the moment. Encore Wire Earnings Before Interest Taxes and Depreciation Amortization USD is rather stable at the moment. Further, Encore Wire Revenue Per Employee is increasing over the last 8 years.

Encore may start a correction in August

Latest Sortino Ratio is up to 0.05. Price may dip again. Encore Wire Cp shows above-average downside volatility for the selected time horizon. We advise investors to inspect Encore Wire Cp further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Encore Wire future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Encore Wire's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Encore Wire's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Encore Wire Implied Volatility

Encore Wire's implied volatility exposes the market's sentiment of Encore Wire Cp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Encore Wire's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Encore Wire stock will not fluctuate a lot when Encore Wire's options are near their expiration.

Although few other entities under the electrical equipment & parts industry are still a bit expensive, Encore Wire may offer a potential longer-term growth to shareholders. On the whole, as of the 25th of July 2022, we see that Encore Wire responds to the market. The firm is undervalued with low probability of distress within the next 24 months. Our concluding 90 days buy vs. sell advice on the firm is Strong Hold.

Editorial Staff

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 Gabriel Shpitalnik do not own shares of Encore Wire Cp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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