Stock Analysis: Decent Value Stocks

Fundamental Rating

Taking everything into account, ASO scores 6 out of 10 in our fundamental rating. ASO was compared to 121 industry peers in the Specialty Retail industry. ASO scores excellent on profitability, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ASO. With these ratings, ASO could be worth investigating further for value investing!.

1. Profitability

1.1 Basic Checks

In the past year ASO was profitable.

ASO had a positive operating cash flow in the past year.

ASO had positive earnings in each of the past 5 years.

Each year in the past 5 years ASO had a positive operating cash flow.

1.2 Ratios

ASO's Return On Assets of 8.54% is fine compared to the rest of the industry. ASO outperforms 79.34% of its industry peers.

ASO's Return On Equity of 20.88% is fine compared to the rest of the industry. ASO outperforms 79.34% of its industry peers.

The Return On Invested Capital of ASO (10.67%) is better than 72.73% of its industry peers.

The Average Return On Invested Capital over the past 3 years for ASO is in line with the industry average of 13.57%.

		Industry Rank	Sector Rank
ROA	8.54%
ROE	20.88%
ROIC	10.67%

ROA(3y)11.1%

ROA(5y)11%

ROE(3y)28.67%

ROE(5y)31.91%

ROIC(3y)14.39%

ROIC(5y)14.77%

1.3 Margins

The Profit Margin of ASO (7.05%) is better than 83.47% of its industry peers.

ASO's Profit Margin has improved in the last couple of years.

Looking at the Operating Margin, with a value of 9.08%, ASO belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.

ASO's Operating Margin has improved in the last couple of years.

Looking at the Gross Margin, with a value of 33.90%, ASO is in line with its industry, outperforming 43.80% of the companies in the same industry.

ASO's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	9.08%
PM (TTM)	7.05%
GM	33.9%

OM growth 3Y-12.18%

OM growth 5Y19.57%

PM growth 3Y-10.73%

PM growth 5Y23.2%

GM growth 3Y-0.79%

GM growth 5Y2.73%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ASO is creating some value.

Compared to 1 year ago, ASO has less shares outstanding

The number of shares outstanding for ASO has been reduced compared to 5 years ago.

ASO has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.77 indicates that ASO is not a great score, but indicates only limited risk for bankruptcy at the moment.

ASO's Altman-Z score of 2.77 is fine compared to the rest of the industry. ASO outperforms 66.12% of its industry peers.

ASO has a debt to FCF ratio of 1.48. This is a very positive value and a sign of high solvency as it would only need 1.48 years to pay back of all of its debts.

Looking at the Debt to FCF ratio, with a value of 1.48, ASO is in the better half of the industry, outperforming 72.73% of the companies in the same industry.

ASO has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.

ASO has a Debt to Equity ratio of 0.24. This is in the better half of the industry: ASO outperforms 61.16% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.24
Debt/FCF	1.48
Altman-Z	2.77

ROIC/WACC1.15

WACC9.25%

2.3 Liquidity

ASO has a Current Ratio of 1.78. This is a normal value and indicates that ASO is financially healthy and should not expect problems in meeting its short term obligations.

ASO has a Current ratio of 1.78. This is in the better half of the industry: ASO outperforms 75.21% of its industry peers.

A Quick Ratio of 0.42 indicates that ASO may have some problems paying its short term obligations.

ASO has a Quick ratio of 0.42. This is in the lower half of the industry: ASO underperforms 61.16% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.78
Quick Ratio	0.42

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ASO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -13.32%.

The Earnings Per Share has been growing by 33.32% on average over the past years. This is a very strong growth

ASO shows a decrease in Revenue. In the last year, the revenue decreased by -3.67%.

Measured over the past years, ASO shows a small growth in Revenue. The Revenue has been growing by 4.20% on average per year.

EPS 1Y (TTM)-13.32%

EPS 3Y-7.28%

EPS 5Y33.32%

EPS Q2Q%-11.31%

Revenue 1Y (TTM)-3.67%

Revenue growth 3Y-4.32%

Revenue growth 5Y4.2%

Sales Q2Q%-6.57%

3.2 Future

The Earnings Per Share is expected to grow by 7.17% on average over the next years.

ASO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.62% yearly.

EPS Next Y0.29%

EPS Next 2Y5.6%

EPS Next 3Y8.11%

EPS Next 5Y7.17%

Revenue Next Year3.91%

Revenue Next 2Y5.55%

Revenue Next 3Y6.76%

Revenue Next 5Y5.62%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 6.10, which indicates a rather cheap valuation of ASO.

ASO's Price/Earnings ratio is rather cheap when compared to the industry. ASO is cheaper than 93.39% of the companies in the same industry.

ASO is valuated cheaply when we compare the Price/Earnings ratio to 28.33, which is the current average of the S&P500 Index.

The Price/Forward Earnings ratio is 6.08, which indicates a rather cheap valuation of ASO.

Compared to the rest of the industry, the Price/Forward Earnings ratio of ASO indicates a rather cheap valuation: ASO is cheaper than 91.74% of the companies listed in the same industry.

When comparing the Price/Forward Earnings ratio of ASO to the average of the S&P500 Index (21.37), we can say ASO is valued rather cheaply.

		Industry Rank	Sector Rank
PE	6.1
Fwd PE	6.08

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ASO indicates a rather cheap valuation: ASO is cheaper than 82.64% of the companies listed in the same industry.

Based on the Price/Free Cash Flow ratio, ASO is valued cheaper than 85.12% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	7.54
EV/EBITDA	4.05

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.

The decent profitability rating of ASO may justify a higher PE ratio.

PEG (NY)20.72

PEG (5Y)0.18

EPS Next 2Y5.6%

EPS Next 3Y8.11%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.22%, ASO has a reasonable but not impressive dividend return.

The stock price of ASO dropped by -34.54% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.

ASO's Dividend Yield is a higher than the industry average which is at 5.62.

With a Dividend Yield of 1.22, ASO pays less dividend than the S&P500 average, which is at 2.51.

		Industry Rank	Sector Rank
Dividend Yield	1.22%

5.2 History

ASO has been paying a dividend for less than 5 years, so it still needs to build a track record.

Dividend Growth(5Y)N/A

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

7.52% of the earnings are spent on dividend by ASO. This is a low number and sustainable payout ratio.

DP7.52%

EPS Next 2Y5.6%

EPS Next 3Y8.11%

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Nasdaq / Consumer Discretionary / Specialty Retail

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

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