NYSE:TXT
$19.02
(2/9 9:36AM)
+1.7%
| Open | $19.09 |
Mkt Cap | $5.1 Billion |
| High | $19.2 |
52Wk High | $23.46 |
| Low | $18.9 |
52Wk Low | $3.57 |
| Volume | 58,453 |
Avg Vol 10D | 7.6 Million |
Ockham's Rating/Recommendation Summary
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TXT Revenue
As a value investing shop, we are interested in seeing how TXT's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.02x and the low end of the range at 0.52x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for TXT of 0.51x is well below its normal historic Price to Sales levels. At a price of $18.91, TXT is 35% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
TXT Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently TXT is significantly above its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from TXT. For example, TXT's Cash Earnings ratio per share has fluctuated between 8.09 and 18.71 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where TXT is with respect to prior business periods.
Therefore, at the current price of $18.91 and a Price to Cash Earnings ratio of 21.25, TXT is significantly overvalued. This diminishes the attractiveness of TXT until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 58% is needed just to return to the historical cash earnings multiple.
TXT Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.
In TXT’s case, the estimated annual dividend is $0.08 resulting in a current dividend yield of 0.42%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from TXT against the historic high and low levels over the past 10 years. The highest dividend yield from TXT over this period was 9.07% while the lowest dividend yield was 0.34% With that range in mind, TXT’s current dividend yield is a full 91.07% below its median dividend yield historically. This is a negative from our perspective.
News Developing on Street Signs for TXT
News has broken via the television and viral blogs regarding TXT, so investors should take an interest in learning what was said.
At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; TXT has received less coverage from the financial media in business television and blogs.
“… Precision cass par, boeing, ge, goodrich, TEXTRON down a little bit. Hampton pearson for the latest beneficiaries from the so-called bad news. > > …”
Textron Inc. News Appeared on Mad Money
The latest news from Mad Money on TXT is available through Ockham's news analytics platform RazorWire.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Textron Inc. will perform just about the same as the index. At Ockham, we are not advising buying Textron Inc. at the current price level because according to our methodology it is not supported by the fundamentals. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, TXT has been less covered in the news compared to the rest of our universe of stocks.
“… TEXTRON. Let's call 16. 17, we buy. The boeing 787 liner is in the air and pin action is you. Consider presipgs cash parts,. …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
It has a lot of aerospace. It's not defensive. It needs a strong economy. It reported a great quarter. Tonight, the TEXTRON ceo lou campbell was released from the wall of shame. He's made us money. You know what? I think the man has more sense. After the break, i'll try to make you more money. >>> coming up, after reporting this morning, one security stock is down.
“… break, i'll try to make you more money. >>> coming up, after reporting this morning, one security stock is down. …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
The ceo that gave you this opportunity belongs on a wall of claim, not a wall of shame. I'm releasing TEXTRON from the sell block. It's now a buy especially given how much beating the stock took today, erasing much of the gain. Maybe it's a gift. A little bit lower, I want you to take it. Remember who the gift comes from, lou campbell. I welcome anyone on this gallery
“… bit lower, I want you to take it. Remember who the gift comes from, lou campbell. I welcome anyone on this gallery …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
End quote. Still, for a company that looked like it was struggling to survive, TEXTRON looks like it's ready to thrive. TEXTRON delivered a strong outlook for the fourth quarter. Earnings per share at the high end of the range between 33 and 66 cents. It's very bullish. Far from being cash strapped as it looked when I put it on the wall that has TEXTRON was when it sold 27 million shares at the end of april, they ended with $2.6 billion in cash. They are winding down through a liquid dags process and selecting sales. That makes so much sense to me.
“… s very bullish. Far from being cash strapped as it looked when I put it on the wall that has TEXTRON was when it sold 27 million shares at the end of april, they ended with $2.6 billion in cash. They are winding down through a liquid dags process and selecting sales. That makes so much sense to me. …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
The helicopter business looked like they might end up on the wrong end of the pentagon's repriortization. TEXTRON was in bad shape. Now, things have turned around. Not just because the economy started to recover. The economy is not hot. A better than expected third I was looking for a loss. There were higher than expected sales. Still, it's lower levels quarter
“… cted third I was looking for a loss. There were higher than expected sales. Still, it's lower levels quarter …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
Paging mr. Hobson. On june 10, we put him on the wall of shame for struggling to run TEXTRON, which was down huge since he took over in july of at the time, they did a secondary offering and a convertible bond offering as well as lowering the bar. Campbell was the most expensive ceo in the country in terms of air travel, even as the stock had gone lower and lower.
“… l was the most expensive ceo in the country in terms of air travel, even as the stock had gone lower and lower. …”
Textron Inc. (TXT) Discussed on CNBC's Mad Money
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
Usually, it adds to shareholder value. Not lou. He's created value. He deserves to be celebrated for turning around TEXTRON. It was saddled with a big financing business along with a private jet business and a think about it. Can you imagine, this man turned around a private plane business in an era where we are debating
“… ned around a private plane business in an era where we are debating …”
Textron Inc. (TXT) Discussed on Fox Business's The Opening Bell on Fox Business
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
With numbers. And also, both j.P. Morgan and also jeffries talking positively about the company and jeffries issuing a buy rating. And TEXTRON quarterly numbers, and up 5%. Baidu down 18%, tough outlook for them. And tough move for the stock as well and the steel stocks coming out with numbers and heard robert mentioning as well. The u.S. Steel, that was good. Good news, watching demand there and you can see, it's a mix, one is up, one is down there on
“… he steel stocks coming out with numbers and heard robert mentioning as well. The u.S. Steel, that was good. Good news, watching demand there and you can see, it's a mix, one is up, one is down there on …”
Textron Inc. (TXT) Discussed on CNBC's Squawk On The Street
Textron Inc. is in the news. Find out how this impacts TXT trading on Ockham Research.
>>> this is the final day of the look at the top three winners of the s&p 500 in the third quarter, led by wynn resort, up aig certainly a lot of focus on that over the past few months. Up almost 90%. And TEXTRON as well. By the way, we are in the midst of the biggest drop in the major averages right now since september 1st. So right now looks like we are of a whimper. >>> meantime, 7.6 magnitude earthquake hit indonesia earlier this morning. You're looking a t the first pictures from the scene just into our newsroom. The damage is wide spread. We'll get a live report in a few this comes after yesterday's massive quake in american and western is a mow iasamoa. >>> small caps have been doing better than large caps for this the russell 2,000, up 20%. S&p up 15%. As we said, 91% companies in the s&p are higher. If you had to make a billion dollar bet on one group, which we've got a large cap, michael, permanent portfolio, small cap
“… f the biggest drop in the major averages right now since september 1st. So right now looks like we are of a whimper. >>> meantime, 7.6 magnitude earthquake hit indonesia earlier this morning. You're looking a t the first pictures from the scene just into our newsroom. The damage is wide spread. We'll get a live report in a few this comes after yesterday's massive quake in american and western is a mow iasamoa. >>> small caps have been doing better than large caps for this the russell 2,000, up 20%. S&p up 15%. As we said, 91% companies in the s&p are higher. If you had to make a billion dollar bet on one group, which we've got a large cap, michael, permanent portfolio, small cap …”