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FAST Graphs

FAST Graphs

FAST Graphs

F.A.S.T. Graphs™ is a powerful research tool providing "essential fundamentals at a glance" on over 17,000 symbols. F.A.S.T. Graphs™ empowers the user to research stocks…

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Carlisle Companies, Inc: Fundamental Stock Research

With this article we are going to examine Carlisle Companies Inc (CSL) through the lens of FAST Graphs™ - fundamentals analyzer software tool. The 12-year historical chart on Carlisle Companies Inc shows the company being undervalued. The prudent investor may want to do his own thorough due diligence on his company for possible addition to their own portfolio.

Earnings Determine Market Price: The following earnings and price correlated FAST Graphs™ clearly illustrates the importance of earnings. The Earnings Growth Rate Line or True Worth™ Line (orange line with white triangles) is correlated with the historical stock price line. On graph after graph the lines will move in tandem. If the stock price strays away from the earnings line (over or under), inevitably it will come back to earnings.


Earnings & Price Correlated Fundamentals-at-a-Glance

A quick glance at the historical earnings and price correlated FAST Graphs™ on Carlisle Companies, Inc shows a picture of undervaluation based upon the historical earnings growth rate of 15.9% and a current P/E of 13.8. Analysts are forecasting the earnings growth to continue at about 12%, and when you look at the forecasting graph below, the stock appears undervalued (it's inside of the value corridor of the five orange lines - based on future growth).

Carlisle Companies, Inc: Historical Earnings, Price, Dividends and Normal P/E Since 2002

Carlisle Cos Inc (CSL)


Performance Table Carlisle Companies, Inc

The associated performance results with the earnings and price correlated graph, validates the principles regarding the two components of total return: capital appreciation and dividend income. Dividends are included in the total return calculation and are assumed paid, but not reinvested.

When presented separately like this, the additional rate of return a dividend paying stock produces for shareholders becomes undeniably evident. In addition to the 18.8% capital appreciation (green circle), long-term shareholders of Carlisle Companies, Inc , assuming an initial investment of $1,000, would have received an additional $325.55 in dividends (blue highlighting) that increased their total return from 10.8% to 11.8% per annum versus 3.5% (red circle) in the S&P 500.

Carlisle Cos Inc (CSL)

The following graph plots the historical P/E ratio (the dark blue line) in conjunction with 10-year Treasury note interest. Notice that the current price earnings ratio on this quality company is as normal as it has been since 2002.

Carlisle Cos Inc (CSL)

A further indication of valuation can be seen by examining a company's current P/S ratio relative to its historical P/S ratio. The current P/S ratio for Carlisle Companies, Inc is 1.00 which is historically normal.

Carlisle Cos Inc (CSL)


Looking to the Future

Extensive research has provided a preponderance of conclusive evidence that future long-term returns are a function of two critical determinants:

  1. The rate of change (growth rate) of the company's earnings

  2. The price or valuation you pay to buy those earnings

Forecasting future earnings growth, bought at sound valuations, is the key to safe, sound and profitable performance.

The Estimated Earnings and Return Calculator Tool is a simple yet powerful resource that empowers the user to calculate and run various investing scenarios that generate precise rate of return potentialities. Thinking the investment through to its logical conclusion is an important component towards making sound and prudent commonsense investing decisions.

The consensus of 7 leading analysts reporting to Capital IQ forecast Carlisle Companies, Inc's long-term earnings growth at 12% (orange circle). Carlisle Companies, Inc has low long-term debt at 19% of capital (red circle). Carlisle Companies, Inc is currently trading at a P/E of 13.8, which is inside the value corridor (defined by the five orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, based upon forecasted earnings growth of 12%, Carlisle Companies, Inc's share price would $106.33 at the end of 2018 (brown circle on EYE Chart), which would represent a 14.5% annual rate of total return which includes dividends paid (yellow highlighting).

Carlisle Cos Inc (CSL)


Earnings Yield Estimates

Discounted Future Cash Flows: All companies derive their value from the future cash flows (earnings) they are capable of generating for their stakeholders over time. Therefore, because Earnings Determine Market Price in the long run, we expect the future earnings of a company to justify the price we pay.

Since all investments potentially compete with all other investments, it is useful to compare investing in any prospective company to that of a comparable investment in low risk Treasury bonds. Comparing an investment in Carlisle Companies, Inc to an equal investment in 10-year Treasury bonds illustrates that Carlisle Companies, Inc's expected earnings would be 6.9 (purple circle) times that of the 10-year T-bond interest (see EYE chart below). This is the essence of the importance of proper valuation as a critical investing component.

Carlisle Cos Inc (CSL)


Summary & Conclusions

This report presented essential "fundamentals at a glance" illustrating the past and present valuation based on earnings achievements as reported. Future forecasts for earnings growth are based on the consensus of leading analysts. Although with just a quick glance you can know a lot about the company, it's imperative that the reader conducts their own due diligence in order to validate whether the consensus estimates seem reasonable or not.

 


Disclosure: No position at the time of writing.

 

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