Will Ferguson (NYSE:FERG) continue to grow in October?

FERG
 Stock
  

USD 117.23  0.59  0.51%   

Ferguson Plc is scheduled to announce its earnings today. While some millenniums are indifferent towards industrials space, it makes sense to digest Ferguson Plc as a unique investment alternative. Let's discuss the possibilities of Ferguson Plc maintaining its debt level in October. Here we also measure the ability of Ferguson Plc to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over two months ago
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The company currently holds 4.69 B in liabilities with Debt to Equity (D/E) ratio of 1.04, which is about average as compared to similar companies.
The firm shows a Beta (market volatility) of -0.1055, which means not very significant fluctuations relative to the market. Let's try to break down what Ferguson's beta means in this case. As returns on the market increase, returns on owning Ferguson Plc are expected to decrease at a much lower rate. During the bear market, Ferguson Plc is likely to outperform the market. Even though it is essential to pay attention to Ferguson Plc historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy towards predicting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Ferguson Plc exposes twenty-eight different technical indicators, which can help you to evaluate its performance. Ferguson Plc has an expected return of -0.0645%. Please be advised to confirm Ferguson Plc semi variance, and the relationship between the maximum drawdown and accumulation distribution to decide if Ferguson Plc performance from the past will be repeated at some point in the near future.
Ferguson Plc financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Ferguson Plc, including all of Ferguson Plc's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Ferguson Plc assets, the company is considered highly leveraged. Understanding the composition and structure of overall Ferguson Plc debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

How important is Ferguson Plc's Liquidity

Ferguson Plc financial leverage refers to using borrowed capital as a funding source to finance Ferguson Plc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ferguson Plc financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Ferguson Plc's total debt and its cash.

How does Ferguson utilize its cash?

To perform a cash flow analysis of Ferguson Plc, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Ferguson Plc is receiving and how much cash it distributes out in a given period. The Ferguson Plc cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

A Deeper Perspective

Ferguson Plc reported the previous year's revenue of 27.16 B. Net Income was 2.2 B with profit before overhead, payroll, taxes, and interest of 6.98 B.

Ferguson Plc has 86 percent chance to stay above $111 in 2 months

Latest semi variance is at 2.32. Ferguson Plc has relatively low volatility with skewness of 0.95 and kurtosis of 1.61. However, we advise all investors to independently investigate Ferguson Plc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Ferguson Plc's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Ferguson Plc's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Bottom Line

Although some other companies in the industrial distribution industry are either recovering or due for a correction, Ferguson may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 27th of September 2022, our overall 90 days buy-or-sell advice on the firm is Hold. We believe Ferguson Plc is currently undervalued with below average chance of bankruptcy for the next two years.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Ferguson Plc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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