MHK - Embedded Expectations Analysis - 2018 04 24
Mohawk Industries, Inc. (MHK:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 18.6x Uniform P/E, suggesting bearish expectations for the firm. Moreover, management has concerns about their financials, market position, and recent acquisitionSpecifically, management may be concerned about high restructuring, acquisition, and other charges, and may lack confidence in the sustainability of improving financial results going forward, particularly with regards to their operating margin. Additionally, they may be concerned about their ability to expand their market position and geographical scope through their planned $60mn-$70mn in investments this year, and may lack confidence in their claim that Godfrey Hirst will be accretive to EPS by $0.35 to $0.40 per share in the first year of its acquisition
Mohawk Industries is a global flooring manufacturer for residential and commercial spaces around the world. The company has three segments: Global Ceramic, which designs, manufactures, sources, distributes and markets a line of ceramic, porcelain and natural stone tile products used for floor and wall applications; Flooring North America, which designs, manufactures, sources and distributes broadloom carpet, carpet tile, rugs and mats, carpet pad, laminate, medium-density fiberboard, luxury vinyl tile (LVT) and sheet vinyl; and Flooring Rest of the World, which designs, manufactures, sources and distributes laminate, LVT and sheet vinyl, wood flooring, broadloom carpet and carpet tile collections.
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- 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
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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