Industrial Industry Research & Analysis
Industrial Industry Research Report
Industrial Industry Research & Analysis: The industrial industry includes companies whose sales originate from the manufacturing of materials into finished goods and services. Industrial Trading Strategy: The industrial industry tends to be sensitive to economic cycles. Look for undervalued industrial investments during economic recessions when stock prices are low and sell industrial investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase industrial investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.
Industry Analysis evaluates the major industry characteristics that affect investments. Company specific factors drive the performance of individual companies, but macro-economic factors can affect the performance, stock prices, growth rates, and chart movements of any stock, currency, or commodity. Review industry research before trading.
Warren Buffett Quote: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." No matter the quality of your business, industry economics is an important factor in any value investing decision.
|Stock Research Rating||Hold||…|
|Potential (safety margin)||18%||…|
|WACC Discount Rate||9%||…|
|Revenue EV Multiple||1.1x||…|
|EBITDA EV Multiple||3.9x||Low ~ Good for investors|
|EBIT EV Multiple||6.1x||Low ~ Good for investors|
|Cash Flow EV Multiple||9.0x||Low ~ Good for investors|
|Book Value EV Multiple||1.2x||…|
|Discounted Cash Flow (DCF)||Ratios||Notes|
|Cash Flow Margin||8%||…|
|Reinvestment Rate||7%||High ~ Bad for Investors|
|WACC Discount Rate||Rates||Notes|
|Risk Free Rate||4%||Low ~ Good for Investors|
|Cost of Debt||7%||Low ~ Good for Investors|
|Equity Risk Premium||5%||…|
|Debt Required Return of Debt||5%||…|
|Required Return of Equity||10%||…|
1 WikiWealth only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies.
2 Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), the enterprise value (EV) market multiple, and the Warren Buffett investment method.
Description: The industrial industry includes companies whose sales originate from the manufacturing of materials into finished goods and services (see full industrial description: competitors, industry ratios, best stocks, market leaders, aggregate SWOT Analysis, and streaming industry news).
Profit Analysis: The best way to profit from industrial stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, industrial stocks tend to outperform the general stock market, because consumers and businesses quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually industrial company investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell industrial stocks, because they are likely to decrease in price the fastest. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments.
Trading Strategy: During economic recessions, consumers tend to cut back on spending to save money and businesses tend to cut back on investments. Less spending decreases industrial business revenue and eventually decreases stock prices. During economic recoveries, consumers and businesses spend quickly to replace or catch up with quickly increasing demand. Higher spending increases industrial business revenue and eventually increases stock prices. During economic expansions, industrial business revenue increases, but at a slower pace than during the recovery stage.