SNA - Embedded Expectations Analysis - 2021 05 25
Snap-on Incorporated (SNA:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 18.8x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain stable, but management may have concerns about franchisee inventory, RS&I segment growth, and gross and operating marginsSpecifically, management may have concerns about FX rate volatility, franchisee inventory levels, and the sustainability of big-ticket item growth. Additionally, they may lack confidence in their ability to sustain growth in education and heavy-duty industry sales, Repairs System & Information (RS&I) revenues, and operational cash flow. Moreover, management may have concerns about their investment priorities and seasonal headwinds in the Financial Services segment. Furthermore, they may lack confidence in their ability to adapt to changing vehicle complexity, keep expanding gross margins, and continue growing operating earnings
Snap-on is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. Products and services include hand and power tools, tool storage, diagnostics software, handheld and PC-based diagnostic products, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, such as aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education. The company also provides financing programs designed to facilitate the sales of its products and support its franchise business.
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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
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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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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