Fundamental Analysis $AME (AMETEK Inc)
1. Profitability and Valuation:
P/E Ratio: The current price-to-earnings (P/E) ratio of 29.79 is higher than the market average, which may indicate that the stock is relatively expensive relative to the earnings it generates.
Forward P/E: The forward P/E of 23.51 suggests that analysts expect an improvement in profitability, making the stock more attractive for future growth.
PEG Ratio: The PEG ratio of 3.50, which combines the P/E ratio with earnings growth, is on the high side. This may indicate that the stock is relatively expensive relative to its expected earnings growth.
EPS Growth: The expected earnings per share (EPS) to grow by 6.01% this year and 7.56% next year, indicating a solid, if modest, growth path for the company.
2. Dividend and Profitability:
Dividend Yield: With a dividend yield of 0.65% and a dividend payout ratio of 17.63%, the stock offers some income to investors, although the yield is low.
ROE & ROA: Return on Equity (ROE) of 15.37% and Return on Assets (ROA) of 9.64% indicate good profitability, which is positive for shareholders.
3. Balance Sheet and Financial Stability:
Debt/Equity Ratio: A low debt/equity ratio of 0.31 (and LT Debt/Equity of 0.22) indicates a solid balance sheet, which makes the company less vulnerable to interest rate fluctuations.
Current Ratio: With a current ratio of 1.26, AMETEK has sufficient liquidity to meet its short-term obligations.
4. Market Performance:
Market Cap: AMETEK has a market cap of $39.60 billion, making it a large, stable company.
Institutions: With 90.30% of the shares held by institutional investors, there is strong institutional confidence in the stock.
Technical Analysis
1. Price Movements:
52W High/Low: The stock price is currently 8.20% below its 52-week high, suggesting a slight pullback after a recent rally.
SMA (20, 50, 200): The stock price is above the 20-day, 50-day, and 200-day Simple Moving Averages (SMA), indicating a positive technical trend. The fact that the SMA20 is up 5.22% indicates a short-term positive move. RSI (14): The Relative Strength Index (RSI) of 63.07 indicates a strong but not yet overbought market, suggesting room for further gains.
2. Volatility and Risk:
Beta: With a Beta of 1.18, AMETEK is slightly more volatile than the broader market, meaning the stock tends to move in the same direction as the market but with slightly larger price swings.
ATR (14): The Average True Range (ATR) of 3.21 indicates the stock has experienced more price swings recently, which could indicate increased volatility.
Conclusion:
AMETEK, Inc. appears to be a solid investment for investors looking for a stable, growing company with a good balance sheet and profitability. Valuations are on the higher side, suggesting a potentially overvalued stock, but technical indicators suggest the stock is currently in an uptrend. Investors could benefit from further price increases, but should be aware of relative valuation and the possibility of market corrections.
The stock will be added to my portfolio next week.... Show More
