MTD - Embedded Expectations Analysis - 2018 08 22
Mettler-Toledo International Inc. (MTD:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 27.5x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about growth rates and margins, as well as consumer trendsSpecifically, management may be concerned about declining product inspection growth rates, and their ability to maintain current margins. Additionally, they may be overstating the strength of their position to deliver a year of strong sales and earnings growth, as well as their satisfaction with the performance of the lab business. Moreover, they may have concerns about a lengthening of consumer replacement cycles. Finally, they may be exaggerating their happiness with the performance of their NIH and pipette businesses, and may have concerns about their ability to sustain strong progress going forward
Mettler-Toledo International is a supplier of precision instruments and services. The company manufactures weighing instruments for use in laboratory, industrial, packaging, logistics, and food retailing applications. The company also manufactures several related analytical instruments and provides automated chemistry solutions used in drug and chemical compound discovery and development. In addition, the company manufactures metal detection and other end-of-line inspection systems used in production and packaging and provides solutions for use in certain process analytics applications. The company has five segments: United States Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other.
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
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