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Fundamental analysis: Commercial Metals Company (CMC)

Awarener score: 7.8

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Modest) and growth (Very good), and the company's inclination to return cash to the stockholders (Average).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

  • Business has been growing at a very good pace. It's been below average when measured against peer companies.
  • Commercial Metals Company business trend isn't so stable. The higher the stability, the lower the risk. It looks top-notch against rivals.

Margins score: 6.3

  • CMC profit margins -on goods and services sold- are usually very poor. They stand slightly worse than rival companies.
  • Business profit on sales tends to be very good. It's almost average when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain close to average when compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be good in relation to total revenues. They're still slightly worse than similar companies.
  • Profits -before income taxes- are usually good considering total sales, and remain almost average when measured against rivals.
  • Total net profit tends to be good when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 8.9

  • Commercial Metals Company profit -on goods and services sold- has been growing at a very good pace. It's been lacking compared to competitors.
  • In recent years, earnings -on operations- have been growing at an excellent step, which has been somewhat worse than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares weak when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at an excellent tempo. It turns to be lacking compared to similar stocks.
  • In past years, profits -before income taxes- grew at an excellent speed. It was somewhat worse than rivals.
  • In the previous years, growth trend on total net profit has been excellent, and below average when measured against peer companies.
  • Earnings per share have grown at an excellent rhythm in past years. It's been lacking compared to industry peers.

Miscellaneous score: 5.0

  • CMC had to pay some income taxes in relation to profits made in the past years. It's been mediocre against peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.2

  • Commercial Metals Company usually gets huge returns on the resources it controls. It proves almost average when measured against peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
  • There's usually excellent profitability -in relation to owned resources-. It ranks encouraging in relation to competitors.
  • In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's almost average when measured against comparable enterprises.

Usage of Funds score: 6.8

  • CMC usually uses almost no genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is non-significant. It stands almost average when measured against rival firms.
  • The company is usually investing in new property, plant, and equipment, to improve its operating capabilities, which is almost average when measured against industry peers.
  • In the past twelve months it paid somewhat low dividends, considering the current stock price. It came slightly better than competitors.
  • In recent years, has slightly cut back dividend payments. The company has behaved lacking compared to similar firms.
  • Dividend payments usually represent a minor portion of genuine funds generation and are most likely safe. Sustainability looks slightly worse than comparable companies.
  • The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains lacking compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks encouraging in relation to competitors.

Balance Sheet score: 5.8

  • Commercial Metals Company intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
  • The company has more than enough short-term resources to face short-term obligations. Liquidity concerns are non-significant. It turns to be close to average when compared to similar firms.
  • Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains mediocre against rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks below average when measured against rivals.
  • For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's in good shape compared to peer firms.
  • For every dollar of short-term obligations, the company has almost another of cash and equivalents, which is slightly worse than similar enterprises.
  • Usually, sales are on a two-months credit. It still ranks substantially worse when measured against peers.
  • Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as in good shape compared to competitors.
  • On average, it takes higher than four months from the purchase to charging customers. It happens to be slightly better than peers.
  • On average pays suppliers before a month from the purchase. It ranks substantially worse when measured against industry peers.
  • The company pays its suppliers roughly three months before charging its customers, so there's sufficient money invested in working capital. It's a slight improvement compared to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly better than rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks almost average when measured against comparable enterprises.
  • Revenues are reasonable in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks close to average when compared to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 7.8

  • Commercial Metals Company looks very cheap in relation to profits and financial position. It happens to be almost average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands worse than most similar companies.
  • The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still substantially worse when measured against industry firms.
  • In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up in a weak position compared to peer ventures.
  • The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks somewhat worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks very cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be very attractive. It ranks below average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
  • The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business earned huge money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still in a weak position compared to peer companies.

Total score: 7.0


CMC logos

Company at a glance: Commercial Metals Company (CMC)

Sector, industry: Basic Materials, Steel

Market Cap: 6.56 billions

Revenues TTM: 9.16 billions

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including rebar, merchant bar, light structural, and other special sections, as well as semi-finished billets for re-rolling and forging applications. In addition, the company provides fabricated steel products used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.

Awarener score: 7.8

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Modest) and growth (Very good), and the company's inclination to return cash to the stockholders (Average).