|
Related Topics
|
Category: Stock Market and Badger Meter
Date: 5 February 2020 Stock Price: $62.31 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Badger Meter a provider of flow measurement, control and communications solutions whose clients include water utilities and municipalities.
|
About Badger Meter
Badger Meter is an innovator in flow measurement, control and communications solutions, serving water utilities, municipalities, and commercial and industrial customers worldwide. The company’s products measure water, oil, chemicals, and other fluids, and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data.
Overview of Badger Meter's 4th quarter 2019 earnings report
- Net sales: $107.566 million (down from $104.413 million for the same quarter of the previous year)
- Net sales: decreased by % over the last 12 months
- Cost of sales: $66.431 million (up from $64.262 million for the same quarter of the previous year)
- Cost of sales increased by % over the last 12 months
- Net income: $12.274 million (up from $11.239 million for the same quarter of the previous year)
- Diluted earnings per share: $0.42 (up from $0.39 for the same quarter of the previous year)
- PE ratio of Badger Meter: 37.01
- Dividend declared: $0.17
- Dividend yield: 1.1%
- Diluted weighted-average shares outstanding: 29.227 million (down from 29.178 million for the same quarter of the previous year)
- Cash and cash equivalents: $48.871 million
- Cash and cash equivalents per share: $1.67
- Cash and cash equivalents makes up 2.68% of Badger Meter's market capital
- Cash and cash equivalents makes up 11.58% of Badger Meter's total assets
- Accounts receivable: $61.364 million
- Accounts receivable makes up 14.54% of Badger Meter's total assets
- Inventories: $81.984 million
- Inventories makes up 19.4% of Badger Meter's total assets
- Stockholders equity in Badger Meter: $331.068 million
- Stockholders equity per share: $11.32
- So Badger Meter is trading at 5.51 times its stockholders equity which is outside the expected range of between 2 and 4 which most firms ten to trade at.
- Cash generated from operations: $19.575 million
- Cash generated from operations per share: $0.67
Badger Meter's management commentary on their 4th quarter 2019 earnings
MILWAUKEE--(BUSINESS WIRE)-- Badger Meter, Inc. (NYSE: BMI) today reported results for the fourth quarter ended December 31, 2019.
“We are very pleased with the strong growth in our domestic municipal water revenue and continued interest in our newer technology products. Flow instrumentation demand was tepid, as global industrial activity was soft in the quarter. Our operating margins improved year-over-year and cash flow remains strong. Overall, it was a solid finish to the year and I want to express my appreciation to all of our Badger Meter colleagues across the globe for the progress made this year,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer of Badger Meter.
“We are very pleased with the strong growth in our domestic municipal water revenue and continued interest in our newer technology products. Flow instrumentation demand was tepid, as global industrial activity was soft in the quarter. Our operating margins improved year-over-year and cash flow remains strong. Overall, it was a solid finish to the year and I want to express my appreciation to all of our Badger Meter colleagues across the globe for the progress made this year,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer of Badger Meter.
Full Year Recap and Outlook
Bockhorst continued, “As I reflect on our 2019 results and look ahead to 2020, a number of accomplishments stand out. We launched multiple, successful new products in 2019. Despite the innovation pause that it created mid-year, we grew domestic municipal sales for the full year and exited the year with momentum. We made significant progress improving gross margins, consistently delivering in the upper half of our normalized range. Our SEA was well managed, and we launched a number of processes to strengthen our working capital management, leading to outstanding cash flow and earnings conversion for the year.”
“As we move into 2020, municipal water spending remains healthy and we continue to experience favorable feedback from installation and pilot testing of our leading technologies. We have several new products that will be launching, including the next generation of our residential ultrasonic meters and our flow restriction meter. While we expect a modest potential headwind from higher brass costs, our profit margins should continue to benefit from positive product and software sales mix and continuous improvement activities across all aspects of our operations. We have extensive available capital to deploy on internal research and development and disciplined, strategic acquisitions with an active funnel of opportunities.” Bockhorst concluded, “As we embark on our 115th year in business, we believe that our comprehensive portfolio of smart water solutions and commitment to innovation will continue to solve customer challenges and preserve the world’s most precious resource.”
Bockhorst continued, “As I reflect on our 2019 results and look ahead to 2020, a number of accomplishments stand out. We launched multiple, successful new products in 2019. Despite the innovation pause that it created mid-year, we grew domestic municipal sales for the full year and exited the year with momentum. We made significant progress improving gross margins, consistently delivering in the upper half of our normalized range. Our SEA was well managed, and we launched a number of processes to strengthen our working capital management, leading to outstanding cash flow and earnings conversion for the year.”
“As we move into 2020, municipal water spending remains healthy and we continue to experience favorable feedback from installation and pilot testing of our leading technologies. We have several new products that will be launching, including the next generation of our residential ultrasonic meters and our flow restriction meter. While we expect a modest potential headwind from higher brass costs, our profit margins should continue to benefit from positive product and software sales mix and continuous improvement activities across all aspects of our operations. We have extensive available capital to deploy on internal research and development and disciplined, strategic acquisitions with an active funnel of opportunities.” Bockhorst concluded, “As we embark on our 115th year in business, we believe that our comprehensive portfolio of smart water solutions and commitment to innovation will continue to solve customer challenges and preserve the world’s most precious resource.”
Badger Meter (NYSE: BMI) stock price history
The image below, obtained from Google, shows the stock price history of Badger Meter over the last 5 years. And it's been a very good time for Badger Meter stockholders.5 years ago the stock was trading at around $29.90 a stock and its currently trading at $62.31 a stock. That's a very strong return of 108.4% provided to Badger Meter stockholders over the last 5 years.
The stock of Badger Meter is trading at a lot closer to its 52 week high of $66.64 than it is to its 52 week low if $49.66. This is a clear indication to us that the short term sentiment and momentum of Badger Meter stock is very positive at this point in time.
The stock of Badger Meter is trading at a lot closer to its 52 week high of $66.64 than it is to its 52 week low if $49.66. This is a clear indication to us that the short term sentiment and momentum of Badger Meter stock is very positive at this point in time.
Recent coverage of Badger Meter
The following extract covering Badger Meter was obtained from newswelcome.com
Technical Indicators of Badger Meter Stock:
The share price of BMI is currently down -2.15% from its 20 days moving average and trading -2.59% down the 50 days moving average. The stock price has been seen performing along above drift from its 200 days moving average with 7.40%. Moving averages are an important analytical tool used to identify current price trends and the potential for a change in an established trend. The simplest form of using a simple moving average in analysis is using it to quickly identify if a security is in an uptrend or downtrend.
RSI momentum oscillator is the most common technical indicator of a stock to determine about the momentum of the shares price and whether the stock trading at normal range or its becoming oversold or overbought. It also helps to measure Speed and change of stock price movement. RSI reading varies between 0 and 100. Commonly when RSI goes below 30 then stock is oversold and stock is overbought when it goes above 70. So as currently the Relative Strength Index (RSI-14) reading of Badger Meter stock is 44.97.
Although it is important to look for trades in a direction of bigger trends when stocks are indicating an opposite short-term movement. Like looking for overbought conditions when bigger trend remained down and oversold conditions when bigger trend is up. In order to check a bigger trend for BMI a 14-day RSI can fell short and considered as a short-term indicator. So in that situation a Simple moving average of a stock can also be an important element to look in addition to RSI. Looking into the Profitability indicators on Badger Meter stock we analyze the stock’s Profitability ratios.
Badger Meter Profitability Spotlight:
Gross margin is detected at 38.60% that represents the percent of total sales revenue that the company retains after direct cost of goods sold. Operating Margin which tells about what proportion of a company’s revenue is left over after paying for variable costs of production such as wages & raw materials is noted at 14.30%. Net profit margin of the company is 10.90% that shows how much the company is actually earning by every dollar of sales.
Return on Investment (ROI) of stock is 9.00%. ROI ratio tells about the efficiency of a number of investments in a company. Return on Assets (ROA) which shows how much the company is profitable as compared to its total assets is observed at 11.40%. Return on Equity (ROE), which tells about the profitability of the corporation by evaluating the profit it generates in ratio to the money shareholders have invested, is noted at 14.70%.
Read the full article here
Technical Indicators of Badger Meter Stock:
The share price of BMI is currently down -2.15% from its 20 days moving average and trading -2.59% down the 50 days moving average. The stock price has been seen performing along above drift from its 200 days moving average with 7.40%. Moving averages are an important analytical tool used to identify current price trends and the potential for a change in an established trend. The simplest form of using a simple moving average in analysis is using it to quickly identify if a security is in an uptrend or downtrend.
RSI momentum oscillator is the most common technical indicator of a stock to determine about the momentum of the shares price and whether the stock trading at normal range or its becoming oversold or overbought. It also helps to measure Speed and change of stock price movement. RSI reading varies between 0 and 100. Commonly when RSI goes below 30 then stock is oversold and stock is overbought when it goes above 70. So as currently the Relative Strength Index (RSI-14) reading of Badger Meter stock is 44.97.
Although it is important to look for trades in a direction of bigger trends when stocks are indicating an opposite short-term movement. Like looking for overbought conditions when bigger trend remained down and oversold conditions when bigger trend is up. In order to check a bigger trend for BMI a 14-day RSI can fell short and considered as a short-term indicator. So in that situation a Simple moving average of a stock can also be an important element to look in addition to RSI. Looking into the Profitability indicators on Badger Meter stock we analyze the stock’s Profitability ratios.
Badger Meter Profitability Spotlight:
Gross margin is detected at 38.60% that represents the percent of total sales revenue that the company retains after direct cost of goods sold. Operating Margin which tells about what proportion of a company’s revenue is left over after paying for variable costs of production such as wages & raw materials is noted at 14.30%. Net profit margin of the company is 10.90% that shows how much the company is actually earning by every dollar of sales.
Return on Investment (ROI) of stock is 9.00%. ROI ratio tells about the efficiency of a number of investments in a company. Return on Assets (ROA) which shows how much the company is profitable as compared to its total assets is observed at 11.40%. Return on Equity (ROE), which tells about the profitability of the corporation by evaluating the profit it generates in ratio to the money shareholders have invested, is noted at 14.70%.
Read the full article here
Badger Meter (NYSE: BMI) latest stock valuation
So what is Badger Meter stock worth based on the release of their latest earnings report? Based on the group's latest earnings provided our valuation model provides a target price (full value price) at $49.70 a Badger Meter stock (down slightly from our 3rd quarter 2019 earnings release valuation of Badger Meter). We therefore believe that the stock is overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target price (full value price) which in this case is $49.70. Thus we see a good entry point into Badger Meter stock at $44.70 or below. We expect the stock to pull back from current levels to levels closer to our target price in coming weeks and months as we cannot see how Badger will be able to maintain its current lofty valuation levels.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target price (full value price) which in this case is $49.70. Thus we see a good entry point into Badger Meter stock at $44.70 or below. We expect the stock to pull back from current levels to levels closer to our target price in coming weeks and months as we cannot see how Badger will be able to maintain its current lofty valuation levels.
Next earnings release for Badger Meter
It is expected that Badger Meter will release their 1st quarter 2020 earnings report in early May 2020.