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KNSL Stock Study (11-24-25)

Posted by on April 29, 2025 at 07:08 | Last modified: November 24, 2025 08:34

I recently did a stock study on Kinsale Capital Group, Inc. (KNSL, $384.90).

M* writes:

     > Kinsale Capital Group Inc is an insurance holding company.
     > The company is engaged in offering property, casualty, and
     > specialty insurance products. It offers specialty insurance
     > products for allied health, healthcare, life sciences,
     > professional, and a public entity. The company operates in
     > only one reportable segment which is the Excess and Surplus
     > Lines Insurance segment, which includes commercial excess
     > and surplus lines liability and property insurance products
     > through its underwriting divisions. The company generates
     > revenues in the form of premiums and investment income.

Over the past decade, this medium-size company has grown sales and earnings at eye-popping annualized rates of 37.8% and 40.0%, respectively. Lines are up, straight, and parallel except for a YOY EPS dip in ’17. Historical data audit (BI website) is perfectly clean and Value Line (VL) gives an Earnings Predictability score of 75.

Over the past decade, PTPM leads peer and industry averages despite falling from 41.6% (’15) to 32.4% (’24) with a last-5-year mean of 27.8%. ROE leads peer and industry averages while increasing from 12.4% (’15) to 28.8% (’24) with a last-5-year mean of 25.4%. Debt-to-Capital is lower than peer and industry averages while falling from 20.7% (’15) to 11.0% (’24) with a last-5-year mean of 11.8%.

Interest Coverage is 59.5 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

Per Google AI, 2024 combined ratio is 76.4%. Any number below 100% indicates underwriting profit. With most specialty insurers ranging from 90-95%, Kinsale is considered “industry-leading.”

With regard to sales growth:

I am forecasting below the range at 7.0%/year.

With regard to EPS growth:

My 9.0% forecast is below the long-term-estimate range (mean of six: 13.4%). Initial value is ’24 EPS of $17.78/share (up 34.5% YOY) instead of 2025 Q3 EPS of $20.36/share (TTM).

My Forecast High P/E is 28.0. Since 2016, high P/E ranges from 28.2 in ’16 to 48.7 in ’22 (excluding 65.3 outlier in ’20) with a last-5-year mean of 37.8 and a last-5-year-mean average P/E of 29.7. I am below the range.

My Forecast Low P/E is 14.0. Since 2016, low P/E increases from 14.5 to 18.8 (’24) with a last-5-year mean of 21.6. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $248.90 is default given initial value from above. This is 35.3% less than the previous closing price and 31.5% less than the 52-week low.

Since 2016, Payout Ratio (PR) ranges from 3.4% (’24) to 20.7% (’17) with a last-5-year mean of 6.2%. I am forecasting below the range at 3.0%.

These inputs land KNSL in the HOLD zone with a U/D ratio of 2.8. Total Annualized Return (TAR) is 14.9%.

PAR (using Forecast Average—not High—P/E) of 8.5% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 231 studies done in the past 90 days (122 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 11.3%, 11.7%, 28.7, 20.5, and 6.2%, respectively. I am lower across the board. VL projects a future average annual P/E of 25.0 that is greater than MS (24.6) and greater than mine (21.0).

MS high / low EPS are $33.78 / $19.02 versus my $27.36 / $17.78 (per share). My high EPS is less due to a lower initial value and growth rate. VL is in the middle at $30.00.

MS LSPF of $347.30 implies a Forecast Low P/E of 18.3: less than the above-stated 20.5. MS LSPF is 10.9% less than the default $19.02/share * 20.5 = $389.91 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 39.5% greater than mine.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges and MS averages. MS TAR being 3.2%/year greater than mine along with a much greater MS LSPF also support the assessment.

With regard to valuation, PEG is 1.4 and 1.9 per Zacks and my projected P/E, respectively: fairly valued (0.41 per M* is quite undervalued, however). Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.64.

Per U/D, KNSL is a BUY under $378/share. BI TAR criterion is met [766.1 / ((14.77 / 100 ) +1 ) ^ 5] ~ $384.00 with a forecast high price ~$766. A rare instance where latter exceeds the former is because I chose to stick with an extremely [possibly unreasonable] low default LSPF.

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BAH Stock Study (11-24-25)

Posted by on April 24, 2025 at 06:48 | Last modified: November 24, 2025 07:26

I recently did a stock study on Booz Allen Hamilton Holding Corp. (BAH, $80.78).

M* writes:

     > Booz Allen Hamilton Holding Corp provides technology
     > solutions in areas such as artificial intelligence,
     > cybersecurity, and related fields. The company serves
     > U.S. federal government agencies, commercial clients,
     > and select international customers. It also provides
     > technologies to evolve defense missions and delivers
     > solutions to warfighters in the digital battlespace.

Over the past decade, this large-size company has grown sales and earnings at annualized rates of 9.0% and 12.6%, respectively [references to year from Value Line (VL) and BI website incremented by 1 to align with FY ending Mar 31]. Lines are up, straight, and parallel except for YOY EPS declines in ’22 and ’23. Ten- (Five-) year EPS R^2 is 0.20 (0.59), but Value Line (VL) gives an impressive Earnings Predictability score of 100.

Over the past decade, PTPM trails industry averages [no peers available] while edging higher from 7.0% (’16) to 10.2% (’25) with a last-5-year mean of 7.6%. ROE leads industry averages while ranging from 22.2% in ’23 to 75.4% (’16) with a last-5-year mean of 50.0%. Debt-to-Capital is much higher than industry averages while ranging from 71.4% in ’21 to 80.8% in ’25 with a last-5-year mean of 76.0%.

Quick Ratio is 1.7 and Interest Coverage is 5.8 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a C grade for Financial Health (per BI website). VL gives a B+ grade for Financial Strength.

With regard to sales growth:

My flat forecast is about middle of the range.

With regard to EPS growth:

My 1.0% forecast is below the long-term-estimate range (mean of five: 4.1%). Initial value is 2026 Q2 EPS of $6.55/share (TTM and still up 43% versus 2025) rather than ’24 EPS of $4.59.

My Forecast High P/E is 20.0. Over the past 10 years, high P/E increases from 16.2 (’16) to 26.3 (’25) with a last-5-year mean (excluding 55.4 outlier in ’23) of 27.1 and a last-5-year-mean average P/E of 22.2 (also excluding ’23 low P/E). I am near bottom of the range (only ’16 is less).

My Forecast Low P/E is 9.0. Over the past 10 years, low P/E increases from 12.3 (’16) to 13.9 (’25) with a last-5-year mean (excluding 37.7 outlier in ’23) of 17.3. I am forecasting near bottom of the range (only ’16 is less).

My Low Stock Price Forecast (LSPF) of $58.90 is default given initial value from above. This is 27.1% less than the previous closing price and 25.6% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) ranges from 28.7% in ’25 to 44.8% in ’22 (excluding 86.7% outlier in ’23) with a last-5-year mean of 36.3%. I am forecasting below the range at 27.0%.

These inputs land BAH in the HOLD zone with a U/D ratio of 2.6. Total Annualized Return (TAR) is 12.6%.

PAR (using Forecast Average—not High—P/E) of 6.2% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 65 studies done in the past 90 days (31 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 6.0%, 6.5%, 22.2, 14.9, and 45.9%, respectively. I am lower across the board. VL projects a future average annual P/E of 18.0 that is greater than MS (16.6) and greater than mine (14.5).

MS high / low EPS are $10.05 / $7.85 versus my $6.88 / $6.55 (per share). My high EPS is less due to a lower initial value and minuscule growth rate. VL is in the middle at $8.15.

MS LSPF of $81.00 (INVALID on today’s date) implies a Forecast Low P/E of 10.3: much less than the above-stated 14.9. MS LSPF is 30.8% less than the default $7.85/share * 14.9 = $116.97 (also INVALID) resulting in more conservative zoning. MS LSPF is still 37.5% greater than mine.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges and MS averages. MS TAR being 8.3%/year greater than mine along with a much greater MS LSPF also support the MOS.

With regard to valuation, PEG is 1.4 and 1.0 per Zacks and M*: fairly valued. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.55 and the “quick and dirty DCF” indicates 14% undervalued.

I think this company could become higher quality by paying down debt and improving liquidity ratios. I would also like to see more consistent estimates of growth (including long-term) rather than contraction. Despite not being a “quality growth stock” right now, though, value could be in play.

Per U/D, BAH is a BUY under $78.70/share. BI TAR criterion is met [137.6 / ((13.47 / 100 ) +1 ) ^ 5] ~ $73.00 with a forecast high price ~$138.

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SAIC Stock Study (11-21-25)

Posted by on April 21, 2025 at 07:01 | Last modified: November 21, 2025 10:48

I recently did a stock study on Science Applications International Corp. (SAIC, $85.01).

M* writes:

     > Science Applications International Corp provides technical,
     > engineering, and enterprise IT services mainly to the U.S.
     > government. Specifically, it offers end-to-end solutions
     > spanning the design, development, integration, deployment,
     > management and operations, sustainment, and security of the
     > customer’s entire IT infrastructure. The company has two
     > reportable segments which include Defense and Intelligence and
     > the Civilian segment. Maximum revenue is generated from its
     > Defense and Intelligence segment, which provides a diverse
     > portfolio of national security solutions to the Department
     > of Defense (DoD) and the Intelligence Community of the U.S.
     > Government. The Civilian segment provides solutions to civilian
     > markets, encompassing federal, state, and local governments.

Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 8.1% and 12.4%, respectively [references to year from Value Line (VL) and BI website incremented by 1 to align with FY ending Jan 31]. Lines are mostly up, straight, and parallel except for a sales dip in ’24 and EPS dips in ’19, ’21, and ’25. Five- and 10-year EPS R^2 are 0.81 and VL gives an Earnings Predictability score of 95.

Over the past decade, PTPM lags peer and industry averages while ranging from 3.6% in ’19 to 8.3% in ’24 with a last-5-year mean of 5.5%. ROE slightly leads peers and the industry while ranging from 13.8% in ’21 to 53.4% in ’18 with a last-5-year mean of 18.8%. Debt-to-Capital is greater than peer and industry averages despite falling from 73.8% (’16) to 60.3% (’25) with a last-5-year mean of 60.5%.

Quick Ratio is 0.69 and Interest Coverage 4.5 per M* who gives a C grade for Financial Health (per BI website). VL gives a B+ grade for Financial Strength.

With regard to sales growth:

My flat forecast is about middle of the range.

With regard to EPS growth:

My flat growth forecast is below the long-term-estimate range (mean of two: 3.8%). Initial value is ’25 EPS of $7.17/share (down 19.3% YOY) rather than 2026 Q2 EPS of $8.26 (TTM).

My Forecast High P/E is 18.0. Over the past 10 years, high P/E ranges from 15.3 in ’24 to 30.0 in ’19 with a last-5-year mean of 21.8 and a last-5-year-mean average P/E of 17.8. I am near bottom of the range (only ’24 is less).

My Forecast Low P/E is 9.0. Over the past 10 years, low P/E ranges from 18.7 in ’19 to 10.7 in ’24 with a last-5-year mean of 13.8. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $64.50 is default based on initial value given above. That is 24.1% less than the previous close and 23.9% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) decreases from 49.0% to 29.6% (’25) with a last-5-year mean of 27.5%. I am forecasting below the range (16.7% in ’24) at 16.0%.

These inputs land SAIC in the HOLD zone with a U/D ratio of 2.1. Total Annualized Return (TAR) is 9.6%.

PAR (using Forecast Average–not High–P/E) of 3.8% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can focus on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 13 studies done in the past 90 days (five outliers including my study excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 3.5%, 5.6%, 19.5, 13.7, and 27.5%. Although sample size is too small for a statistically-relevant comparison, I am lower across the board. VL projects a future average annual P/E of 17.0: greater than MS (16.6) and greater than mine (13.5).

MS high / low EPS are $10.00 / $7.94 versus my $7.17 / $7.17 (per share). My high EPS is less due largely to zero growth rate. VL’s $11.60 high EPS exceeds both.

MS LSPF of $94.70 (INVALID on today’s date) implies Forecast Low P/E of 11.9: less than the above-stated 13.7. MS LSPF is 12.9% less than the default $7.94/share * 13.7 = $108.78 resulting in more conservative zoning. MS LSPF is 46.8% greater than mine, however.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. I have discounted growth to zero! Tiny sample size aside, MS TAR (14.8%) exceeding mine by 6.7% per year and my lower LSPF also support MOS.

With regard to valuation, PEG is 0.54 per M*: significantly undervalued. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.58. “Quick and dirty DCF” has stock undervalued by 35%. CFRA is the dissenter with a 12-month stock price target of $80.

Part of me feels like I’ve been duped into finding Fool’s Gold for the second straight study. Visual inspection looks encouraging only to find a company with little consistent growth projections (low-single-digits among a paucity of estimates and what projections are available offset one another with VL extremely bullish versus CFRA bearish, YF and Zacks trading one positive YOY forecast for another negative one, etc.). Financial strength also seems weak with high debt and low liquidity ratios.

The company is hardly a “quality growth stock” but Value is attractive, right? Academics say so. I still wonder but it’s not typically how we at BI prefer to find stocks. And sometimes Value progresses to being a trap.

Per U/D, SAIC is a BUY under $80.60/share. BI TAR criterion would be met [129.1 / ((13.97 / 100 ) +1 ) ^ 5] ~ $67 given a forecast high price ~$129.

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FSV Stock Study (11-20-25)

Posted by on April 17, 2025 at 07:19 | Last modified: November 21, 2025 09:12

I recently did a stock study on FirstService Corp. (FSV, $152.27).

M* writes:

     > FirstService Corp operates in two business divisions: FirstService
     > Residential and FirstService Brands. FirstService Residential has
     > service contracts to manage thousands of residential communities,
     > including high-, medium-, and low-rise condominiums and co-
     > operatives. FirstService Brands generates the majority of the
     > company’s revenue and provides property services to residential
     > and commercial customers through the following brands: California
     > Closets; Paul Davis Restoration; CertPro Painters; Pillar to Post;
     > Floor Coverings International; College Pro Painters; and Service
     > America. The company earns the majority of its revenue in the
     > United States, with the remaining revenue generated in Canada.

Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 17.0% and 16.9%, respectively (excluding 2019 from the full analysis due to overwhelming one-time accounting charge for settlement of long-term incentive arrangement paid to founder). Lines are mostly up, straight, and parallel except for EPS dips in ’22 and ’23. Five- (10-) year EPS R^2 is 0.16 (0.80) and Value Line (VL) gives an Earnings Predictability score of 30.

Over the past decade, PTPM leads peer and industry averages while ranging from 4.7% in ’23 to 6.4% in ’21 with a last-5-year mean of 5.3%. ROE leads peer and industry averages while ranging from 9.8% in ’23 to 27.7% in ’18 with a last-5-year mean of 13.3%. Debt-to-Capital is greater than peer and industry averages while ranging from 50.7% in ’21 to 58.6% in ’18 with a last-5-year mean of 54.0%.

Quick Ratio is 1.3 and Interest Coverage is 4.4 per M* who assigns “Narrow” Economic Moat and gives an A grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

With regard to sales growth:

My 4.0% forecast is below the range.

With regard to EPS growth:

My 7.0% per year forecast is below the long-term-estimate range (mean of five: 10.6%; I only see two unique numbers and am a bit concerned about data duplication). Initial value is ’24 EPS of $2.97/share rather than 2025 Q3 $3.02 (TTM).

My Forecast High P/E is 40.0. Over the past 10 years, high P/E ranges from 50.1 in ’18 to 74.2 in ’23 with a last-5-year mean of 70.5 and a last-5-year-mean average P/E of 56.8. I am well below the range but at top of my comfort zone.

My Forecast Low P/E is 32.0. Over the past 10 years, low P/E increases from 37.4 to 47.6 (’24) with a last-5-year mean of 43.0. I am forecasting near bottom of the range [only ’20 (28.4) is less].

My Low Stock Price Forecast is $106.00. Default ($95.00) based on initial value from above seems unreasonably low. My [arbitrary] projection is 30.4% and 38.9% less than the previous closing price and 52-week low, respectively.

Payout Ratio over the last 10 years decreases from 50.8% to 33.7% in ’24 with a last-5-year mean of 32.0%. I am forecasting at bottom of the range (23.0%).

These inputs land FSV in the SELL zone with a U/D ratio of 0.3. Total Annualized Return (TAR) is 2.4%.

PAR (using Forecast Average–not High–P/E) of 0.4% is unthinkable as an investment prospect. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR but even that is less than the risk-free rate (T-bills).

To assess MOS, I would normally compare my inputs with those of Member Sentiment (MS). Only one other study exists besides mine making this a non-starter.

VL’s projected average annual P/E of 35.0 is less than my 36.0 but its high EPS of $7.90/share (versus $4.17) is much greater.

I think MOS is robust because my inputs are near or below respective analyst/historical ranges.

With regard to valuation, PEG is 2.7 and 6.7 per Zacks and my projected P/E, respectively: quite overvalued (5.0 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is slightly encouraging at 0.89. The “quick and dirty DCF” has stock overvalued by 3%.

Despite being encouraged by a bullish VL and impressive visual inspection for a stock near its 52-week low, I now see an inexplicably high multiple [no competitors listed by M* is unique] and expensive valuation, lack of [high-growth] estimates, no MS (unique), no CFRA report (unique), high debt—an overall dearth, I must say.

Per U/D, FSV is a BUY under $121/share. BI TAR criterion is met [166.8 / ((14.27 / 100 ) +1 ) ^ 5] = $85.60 with a forecast high price ~$167.

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AFYA Stock Study (11-19-25)

Posted by on April 15, 2025 at 07:08 | Last modified: November 19, 2025 10:40

I recently did a stock study on Afya Ltd. (AFYA, $14.77).

M* writes:

     > Afya Ltd is a medical education group based in Brazil. Its education
     > portfolio has several courses in addition to Medicine, such as
     > Management, Dentistry, Law, Engineering, Nursing, Psychology, and
     > Accounting Sciences, among others. It has three segments; Undergrad
     > provides educational services through undergraduate courses related
     > to medical school, undergraduate health science and other ex-health
     > undergraduate programs, Continuing Education provides medical
     > education, specialization and graduate courses in medicine, delivered
     > through digital and in-person content; and Medical practice solution
     > provides clinical decision, clinical management and doctor-patient
     > relationships for physicians and provide access, demand and
     > efficiency for the healthcare players.

Since 2019 when public trading begins, this small-size company grows sales and earnings at annualized rates of 29.0% and 19.5%, respectively. Lines are mostly up, straight, and parallel except for EPS decline in ’21. 5-year EPS R^2 is 0.73. The company is not covered by Value Line.

Since 2019, PTPM leads peer and industry averages despite falling from 24.9% to 20.5% (’24) with a last-5-year mean of 19.5%. ROE leads peer and industry averages while increasing from 9.2% to 17.5% (’24) with a last-5-year mean of 11.7%. Debt-to-Capital is greater than peer and industry averages while increasing from from 14.3% to 42.6% (’24) with a last-5-year mean of 40.5%.

Quick Ratio is 0.95 and Interest Coverage is 2.8 per M* who assigns “Narrow” Economic Moat and gives a B grade for Financial Health (per BI website).

With regard to sales growth:

My 7.0% forecast is below the range.

With regard to EPS growth:

My 8.0% per year forecast is near bottom of the long-term-estimate range (mean of three: 16.2%). Initial value is ’24 EPS of $1.29/share (up 52% YOY) rather than 2025 Q3 $1.40 (TTM).

My Forecast High P/E is 17.0. Since 2019, high P/E decreases from 68.1 to 17.5 (’24) with a last-5-year mean of 36.1 and a last-5-year-mean average P/E of 26.6. I am below the range.

My Forecast Low P/E is 9.0. Since 2019, low P/E falls from 41.6 to 11.3 (’24) with a last-5-year mean of 17.1. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $11.60 is default based on initial value given above: 21.5% less than the previous close and 14.1% less than the 52-week low.

These inputs land AFYA in the BUY zone with a U/D ratio of 6.4. Total Annualized Return (TAR) is 18.7%.

PAR (using Forecast Average–not High–P/E) of 12.5% is less than I seek in a small-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 8 studies (my study and 4 outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 10.2%, 11.0%, 20.3, and 11.0, respectively. I am lower across the board (although MS sample is too small for statistically meaningful comparison).

MS high / low EPS are $2.23/ $1.29 versus my $2.05 / $1.29 (per share). My high EPS is less due to a lower growth rate.

MS LSPF of $11.20 implies Forecast Low P/E of 8.7: less than the above-stated 11.0. MS LSPF is 21.1% less than the default $1.29/share * 11.0 = $14.19 resulting in more conservative zoning. MS LSPF is also 3.5% less than mine.

MOS is robust because my inputs are near or below respective analyst/historical ranges (especially EPS growth rate). Also suggestive of MOS are my inputs being lower than MS and MS TAR being 6.6%/year greater than mine.

With regard to valuation, PEG is 0.42 and 1.2 per Zacks and my projected P/E, respectively: slightly undervalued (0.55 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is extremely cheap at 0.40.

Couple caveats to this study include scant analyst estimates (along with MS studies) and underwhelming financial strength with regard to liquidity ratios. I do feel MOS to be quite strong in the study with TAR undeterred, however.

Per U/D, AFYA is a BUY under $17.40/share. BI TAR criterion is met at same price [34.8 / ((14.87 / 100 ) +1 ) ^ 5].

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

† — 2024 stated EPS omitted that would otherwise inflate to 99% and 87% for ’24-’26 and ’24-’27, respectively.

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AXTA Stock Study (11-18-25)

Posted by on April 10, 2025 at 07:26 | Last modified: November 17, 2025 23:52

I recently did a stock study on Axalta Coating Systems Ltd. (AXTA, $28.18). The previous study is here.

M* writes:

     > Axalta Coating Systems Ltd is a manufacturer, marketer and
     > distributor of high-performance coatings systems. It operates in
     > two segments. The Performance Coatings segment provides liquid
     > and powder coatings solutions to a fragmented and local customer
     > base. Its end markets include refinish and industrial. The Mobility
     > Coatings segment relates to the provision of coating technologies
     > to original equipment manufacturers of light and commercial
     > vehicles. The company operates in the geographic areas of North
     > America, EMEA countries, Asia-Pacific and Latin America.

Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 2.5% and 24.6%, respectively. Lines are somewhat up, straight, and narrowing except for YOY sales declines in’16, ’19, and ’20 along with EPS declines in ’16, ’17, ’20, and ’22. Visual inspection barely clears the barbed-wire fence. Sales growth is subbornly low while EPS appears somewhat cyclical but certainly growing. Ten- (Five-) year EPS R^2 is 0.63 (0.76), and Value Line (VL) gives an Earnings Predictability score of 45.

Over the past decade, PTPM trails peer and industry averages while increasing from 3.9% (’15) to 9.4% (’24) with a last-5-year mean of 6.5%. ROE also trails peer and industry averages despite increasing from 9.0% (’15) to 20.4% (’24) with a last-5-year mean of 15.8%. Debt-to-Capital is higher than peer and industry averages despite falling from 76.2% (’15) to 64.3% (’24) with a last-5-year mean of 69.8%.

Quick Ratio is 1.4 and Interest Coverage is 4.1 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL gives a B+ grade for Financial Strength.

With regard to sales growth:

My forecast of zero is toward bottom end of the range.

With regard to EPS growth:

My 7.0% per year forecast is below the long-term-estimate range (mean of five: 9.9%). Initial value is ’24 EPS of $1.78/share (up 47% YOY) rather than 2025 Q3 EPS of $2.09 (TTM).

My Forecast High P/E is 23.0. Over the past 10 years, high P/E falls from 93.6 (’15) to 23.4 (’24) with a last-5-year mean of 36.3 and a last-5-year-mean average P/E of 29.1. I am below the range.

My Forecast Low P/E is 16.0. Over the past 10 years, low P/E falls from 61.4 (’15) to 17.1 (’24) with a last-5-year mean of 22.0. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $20.00. Default ($28.50) given initial value from above is INVALID on today’s date. My [arbitrary] projection is 29.0% less than the previous closing price and 24.0% less than the 52-week low.

These inputs land AXTA in the BUY zone with a U/D ratio of 3.2. Total Annualized Return (TAR) is 14.7%.

PAR (using Forecast Average—not High—P/E) of 11.0% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only nine studies done in the past 90 days (four outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 2.6%, 8.0%, 25.0, and 17.2, respectively. Although the sample is too small for anything but anecdotal comparison, I am lower across the board. VL projects a future average annual P/E of 25.0 that is greater than MS (21.1) and greater than mine (19.5).

MS high / low EPS are $3.00 / $2.04 versus my $2.50 / $1.78 (per share). My high EPS is less due to a lower growth rate and initial value. VL’s $3.00 equals MS.

MS LSPF of $23.10 implies a Forecast Low P/E of 11.3: much less than the above-stated 17.2. MS LSPF is 34.2% less than the default $2.04/share * 17.2 = $35.09 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 15.5% greater than mine.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges. Also suggestive of MOS is MS TAR being 6.7%/year greater than mine along with a greater MS LSPF.

With regard to valuation, PEG is 1.1 and 1.8 per Zacks and my projected P/E, respectively: fairly valued on average (although M* is only 0.4). Relative Value [(current P/E) / 5-year-mean average P/E] is extremely low at 0.47 and the “quick and dirty DCF” indicates 47% [no intentional relation to previous] undervalued.

I am concerned that sales may eventually be a drag on EPS growth, but the former is not material to this analysis.

Per U/D, AXTA is a BUY under $29.40/share. BI TAR criterion is met [57.5 / ((14.87 / 100 ) +1 ) ^ 5] = $28.75 with a forecast high price under $58 (no dividend).

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EOG Stock Study (11-17-25)

Posted by on April 7, 2025 at 07:06 | Last modified: November 17, 2025 09:52

I recently did a stock study on EOG Resources, Inc. (EOG, $110.40). Previous study is here.

M* writes:

     > EOG Resources is an oil and gas producer with acreage in several
     > US shale plays, primarily in the Permian Basin and the Eagle
     > Ford. At the end of 2024, it reported net proven reserves of
     > 4.7 billion barrels of oil equivalent. Net production averaged
     > roughly 1,062 thousand barrels of oil equivalent per day in 2024
     > at a ratio of 65% oil and natural gas liquids and 31% natural gas.

I usually avoid energy companies because visual inspection sometimes fails due to cyclicality. I’m not convinced we should blacklist the entire sector, however, because I do think it possible to realize phenomenal returns every now and then.

Visual inspection for EOG cleans up relatively well with the exclusion of 2015, ’16, and ’20 from the full analysis (negative EPS). ’20 probably makes sense due to COVID-19. Rather than dig to figure out plausible excuses for ’15-’16, I will note this is a capital-intensive business due to high costs of exploration, extraction, and refining that requires continuous investment in equipment, infrastructure, and technology.

Pressing onward with stated exclusions, since 2017 the large-size company has grown sales and earnings at annualized rates of 10.5% and 17.6%, respectively. Lines are somewhat up, straight, and parallel with YOY sales+EPS declines in ’19 and ’23 and EPS dip in ’24. 5- (8-) year EPS R^2 is 0.31 (0.83), and Value Line (VL) gives an Earnings Predictability score of 45.

Since 2017, PTPM leads peer and industry averages while increasing from 5.9% to 35.2% in ’24 with a last-4-year mean of 35.2%. ROE also leads peer and industry averages while ranging from 13.0% in ’19 to 32.6% in ’22 with a last-4-year mean of 25.6%. Debt-to-Capital is less than peer and industry averages while falling from 28.2% to 14.7% (’24) with a last-4-year mean of 16.2%.

Quick Ratio is 1.3 and Interest Coverage 35 per M* who assigns “Narrow” Economic Moat, rrates the company “Exemplary” for Capital Allocation, and gives a B grade for Financial Health (per BI website). VL gives an A grade for Financial Strength.

With regard to sales growth:

My 1.0% per year forecast is near bottom of the range.

With regard to EPS growth:

My 2.0% per year forecast is toward bottom of the long-term-estimate range (mean of seven: 5.9%). Initial value is ’24 EPS of $11.25/share rather than 2025 Q3 EPS of $10.04 (TTM).

My Forecast High P/E is 11.0. Since 2017, high P/E falls from 24.6 to 12.4 (’24) with a last-4-year mean of 11.7 and a last-4-year-mean average P/E of 9.6. I am near bottom of the range (only ’23 is less).

My Forecast Low P/E is 6.5. Since 2017, low P/E falls from 18.4 to 9.7 (’24) with a last-4-year mean of 7.5. I am forecasting toward bottom of the range [only ’21 (6.1) is less].

My Low Stock Price Forecast (LSPF) of $84.20 is default based on initial value from above. This is 23.7% less than the previous closing price and 17.9% less than the 52-week low.

Since 2017, Payout Ratio (PR) increases from 15.0% to 32.4% in ’24 with a last-4-year mean of 25.2%. I am forecasting below the range at 12.0%.

These inputs land EOG in the HOLD zone with a U/D ratio of 1.0. Total Annualized Return (TAR) is 5.4%.

PAR (using Forecast Average—not High—P/E) of 1.1% is less than the current risk-free rate (T-bills). If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR albeit still less than I seek from any size company.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 13 studies (my study and seven other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.0%, 5.8%, 11.7, 7.5, and 23.8%, respectively. I am lower across the board (although sample is too small for statistically valid comparison). VL’s future annual P/E of 14.0 is higher than MS (9.6) and higher than mine (8.8).

MS high / low EPS are $14.11/ $10.29 versus my $12.42 / $11.25 (per share). My high EPS is less due to a lower growth rate. VL eclipses both at $15.00.

MS LSPF of $82.30 implies a Forecast Low P/E of 8.0 versus the above-stated 7.5. MS LSPF is 6.6% greater than the default $10.29/share * 7.5 = $77.18 resulting in more aggressive zoning. MS LSPF is 2.3% less than mine, however.

MOS is robust because my inputs are near or below respective analyst/historical ranges and (anecdotally) MS averages. MS TAR 6.3%/year greater than mine is also suggestive of MOS.

With regard to valuation, PEG is 8.5 and 5.4 per Zacks and my projected P/E: both significantly overvalued (only 0.14 per M* suggests some calculation disconnect). Relative Value [(current P/E) / 5-year-mean average P/E] is expensive at 1.15. On the other hand, CFRA and M* calculate undervalued by 12% and 20%, respectively.

Per U/D, EOG is a BUY under $97/share. BI TAR criterion is met [136.6 / ((13.77 / 100 ) +1 ) ^ 5] ~ $72 with a forecast high price ~$137.

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FDS Stock Study (11-17-25)

Posted by on April 4, 2025 at 06:48 | Last modified: November 16, 2025 09:13

I recently did a stock study on FactSet Research Systems Inc. (FDS, $273.91). Previous studies are here and here.

M* writes:

     > FactSet provides financial data and portfolio analytics to the
     > global investment community. The company aggregates data from
     > third-party data suppliers, news sources, exchanges, brokerages,
     > and contributors into its workstations. In addition, it
     > provides essential portfolio analytics that companies use to
     > monitor portfolios and address reporting requirements. Buy-side
     > clients (including wealth and corporate clients) account for
     > over 80% of FactSet’s annual subscription value. In 2015, the
     > company acquired Portware, a provider of trade execution
     > software. In 2017, it acquired BISAM, a risk management and
     > performance measurement provider. In 2022, it completed
     > its purchase of CUSIP Global Services.

Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 8.6% and 9.1%, respectively (FY ends 8/31). Lines are mostly up, straight, and parallel except for EPS declines in ’17 and ’22. 10-year EPS R^2 is 0.87 and Value Line (VL) gives an impressive Earnings Predictability score of 100.

Over the past decade, PTPM trails peer and industry averages while falling from 40.9% (’16) to 31.1% (’25) with a last-5-year mean of 28.4%. ROE leads peer averages but trails the industry while falling from 60.3% (’16) to 27.3% (’25) with a last-5-year mean of 30.2%. Debt-to-Capital is less than peer and industry averages despite increasing from from 36.7% (’16) to 41.6% (’25) with a last-5-year mean of 49.7%.

Quick Ratio is 1.2 and Interest Coverage is 13.8 per M* who assigns “Narrow” Economic Moat, “Standard” rating for Capital Allocation, and gives an A grade for Financial Health (per BI website). VL gives an B++ grade for Financial Strength.

With regard to sales growth:

My 4.0% per year forecast is below the range.

With regard to EPS growth:

My 5.0% per year forecast is below the long-term-estimate range (mean of six: 6.7%). Initial value is ’25 EPS of $15.55/share.

My Forecast High P/E is 28.0. Over the past 10 years, high P/E increases from 21.9 (’16) to 32.1 (’25) with a last-5-year mean of 38.4 and a last-5-year-mean average P/E of 33.7. I am near bottom of the range (only ’16 is less).

My Forecast Low P/E is 16.0. Over the past 10 years, low P/E increases from 16.6 (’16) to 23.5 (’25) with a last-5-year mean of 29.0. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) is $190.00. Default ($248.80) based on initial value from above is only 9.2% (0.7%) less than the previous close (52-week low). My [arbitrary] projection is 30.6% and 24.2% less, respectively.

Payout Ratio (PR) over the last 10 years ranges from 23.0% in ’16 to 35.4% in ’18 with a last-5-year mean of 30.3%. I am forecasting at bottom of the range (23.0%).

These inputs land FDS in the BUY zone with a U/D ratio of 3.4. Total Annualized Return (TAR) is 16.0%.

PAR (using Forecast Average–not High–P/E) of 10.8% is less than I seek in a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 142 studies (my study and 56 other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.5%, 7.4%, 30.0, 19.1, and 30.3%, respectively. I am lower across the board. VL’s projected average annual P/E of 25.0 is greater than MS (24.6) and greater than mine (22.0).

MS high / low EPS are $21.81/ $14.97 versus my $19.85 / $15.55 (per share). My high EPS is less due to a lower growth rate. VL’s $22.60 is greater than both.

MS LSPF of $233.30 implies Forecast Low P/E of 15.6: less than the above-stated 19.1. MS LSPF is 18.4% less than the default $14.97/share * 19.1 = $285.93 resulting in more conservative zoning. MS LSPF is still 22.6% greater than mine, however.

MOS is robust because my inputs are near or below respective analyst/historical ranges and MS averages. MS TAR 3.3%/year greater than mine and a much higher LSPF also support the MOS.

With regard to valuation, PEG is 2.8 and 3.4 per Zacks and my projected P/E, respectively: both overvalued (1.8 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is extremely cheap at 0.52 and the “quick and dirty DCF” has stock undervalued by 32%. CFRA calculates undervalued by 25% (but maintains a HOLD rating).

Per U/D, FDS is a BUY under $281/share. BI TAR criterion is met [555.8 / ((14.07 / 100 ) +1 ) ^ 5] ~ $288 with a forecast high price ~$556.

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CMG Stock Study (11-17-25)

Posted by on April 1, 2025 at 07:13 | Last modified: November 15, 2025 09:46

I recently did a stock study on Chipotle Mexican Grill, Inc. (CMG, $31.57).

M* writes:

     > Chipotle Mexican Grill is the largest fast-casual chain restaurant in
     > the United States, with systemwide sales of $11.3 billion in 2024.
     > The Mexican concept is almost exclusively company-owned, with just
     > three license stores operated through a master franchise relationship
     > with Alshaya Group in the Middle East. It had a footprint of 3,726
     > stores at the end of 2024, heavily indexed to the United States,
     > although it maintains a small presence in Canada, the UK, France,
     > and Germany. Chipotle sells burritos, burrito bowls, tacos,
     > quesadillas, and beverages, with a selling proposition built
     > around competitive prices, high-quality food sourcing, speed of
     > service, and convenience. The company generates its revenue
     > entirely from restaurant sales and delivery fees.

Over the past decade, this large-size company has grown sales and EPS at annualized rates of 12.5% and 37.4%, respectively. Lines are mostly up, straight, and narrowing except for a sales dip in ’16 and larger EPS decline (food safety scare) in ’16. Ten-year EPS R^2 is 0.59 and Value Line (VL) gives an Earnings Predictability score of 70.

Over the past decade, PTPM trails peer and industry averages while ranging from 1.0% in ’16 to 17.8% in ’24 with a last-5-year mean of 12.7%. ROE leads peer and industry averages while increasing from 19.2% (’15) to 41.7% (’24) with a last-5-year mean of 33.8%. Debt-to-Capital is lower than peer and industry averages despite increasing from 0% (’15) to 55.4% (’24) with a last-5-year mean of 59.0%. The company has no long-term debt (annual rentals only).

Quick Ratio is 1.4 per M* who assigns “Wide” Economic Moat, gives “Exemplary” rating for Capital Allocation, and a B grade for Financial Health (per BI website). VL gives an A grade for Financial Strength.

With regard to sales growth:

My 5.0% forecast is below the range.

With regard to EPS growth:

My 8.0% forecast is below the long-term-estimate range (mean of seven: 14.1%). Initial value is ’24 EPS of $1.11/share rather than 2025 Q3 $1.13 (TTM).

My Forecast High P/E is 40.0. Over the past 10 years, high P/E ranges from 50.2 in ’15 to 115 in ’20 (excluding 723 upside outlier in ’16) with a last-5-year mean of 74.1 and a last-5-year-mean average P/E of 56.6. I am below the range and at upper end of my comfort zone.

My Forecast Low P/E is 20.0. Over the past 10 years, low P/E ranges from 30.3 in ’23 to 54.9 in ’21 (excluding upside outlier of 478 in ’16) with a last-5-year mean of 39.1. I am forecasting well below the range.

My Low Stock Price Forecast (LSPF) of $22.20 is default based on initial value given above. That is 29.7% and 25.5% less than the previous closing price and 52-week low, respectively.

These inputs land CMG in the BUY zone with a U/D ratio of 3.7. Total Annualized Return (TAR) is 15.7%.

PAR (using Forecast Average—not High—P/E) of 9.3% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 186 studies done in the past 90 days (36 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 10.5%, 13.9%, 45.0, and 31.4, respectively. I am lower across the board. VL projects a future average annual P/E of 32.0 that is less than MS (38.2) and greater than mine (30.0).

MS high / low EPS are $2.16 / $1.12 versus my $1.63 / $1.11 (per share). My high EPS is less due to a lower growth rate. VL’s $2.16 is equal to MS.

MS LSPF of $31.20 implies a Forecast Low P/E of 27.9: less than the above-stated 31.4. MS LSPF is 11.3% less than the default $1.12/share * 31.4 = $35.17 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 40.5% greater than mine.

MOS is robust in the current study because my inputs are less than MS and respective analyst/historical ranges. As further support, MS TAR is [5.3%/year] greater than mine along with MS LSPF.

With regard to valuation, PEG is 3.2 (overvalued) per Zacks and my projected P/E but undervalued (0.6) per M*. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.49 along with the “Quick and Dirty DCF” that has it substantially undervalued by 56%.

Per U/D, CMG is a BUY under $32.90/share. BI TAR criterion is met [65.2 / ((14.87 / 100 ) +1 ) ^ 5] = $32.60 with a forecast high price of ~$65 (no dividend).

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