Report
Valens Research

B - Embedded Expectations Analysis - 2019 12 13

Barnes Group Inc. (B:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 18.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about sales, EPS, and capex.

Specifically, management may lack confidence in their ability to sustain recent EPS improvements and meet their capex guidance. Furthermore, they may be concerned about further sales declines in their Force & Motion Control division, and they may be concerned about the sustainability of spares volume growth quarter-over-quarter.
Underlying
Barnes Group Inc.

Barnes Group provides engineered products, industrial technologies, and solutions. The company's products and services are used in applications including aerospace, transportation, manufacturing, automation, healthcare, and packaging. The company's segments are: Industrial, which provides precision components, products and systems for critical applications serving various customer base in end-markets such as transportation, industrial equipment, automation, personal care, packaging, electronics, and medical devices; and Aerospace, which manufactures fabricated and precision machined components and assemblies for turbine engines, nacelles and structures for both commercial and military aircraft.

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
  • Stock analyst recommendations are not grounded in disciplined financial analysis
  • Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
  • Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available

We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.

  • Corporate credit ratings remain years behind the fundamental underpinnings of company performance
  • Stock analysts continue to make recommendations with deeply inherent biases
  • Research firms have failed to break down the walls between credit, equity, and macroeconomic research
  • The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming

The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.

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