Stanley Black & Decker’s Disastrous Q2: Is There an Opportunity?

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SWK Intrinsic Value – Stanley Black & Decker ($NYSE:SWK), Inc. reported disastrous second-quarter results, missing revenue estimates by 8% and seeing its profits plunge 80%. The company’s stock price has plummeted 60% since its January peak, and some investors are wondering if this could be an opportunity to buy. The company attributed its poor performance to the ongoing pandemic, which has led to a sharp decline in demand for its products. Stanley Black & Decker is a diversified industrial company with businesses in construction, security, and power tools, among other things. The pandemic has hit all of these businesses hard, leading to a 16% plunge in the stock price.

Since the initial drop, the stock has fallen an additional 22%, meaning it is now down 60% from its all-time high. Despite the challenges faced by the company, some analysts believe Stanley Black & Decker is well-positioned for the long term. The company has a strong balance sheet and a history of shareholder friendly actions, such as share repurchases and dividend increases. If you believe that Stanley Black & Decker can overcome the challenges posed by the pandemic and emerge stronger on the other side, then this could be an attractive opportunity.

Price History

On Tuesday, STANLEY BLACK & DECKER stock opened at $78.4 and closed at $77.3, up by 1.1% from last closing price of 76.5. The company blamed the loss on “unfavorable product and geographic mix” as well as “challenges in the global economic environment.” These challenges included Brexit, the U.S.-China trade war, and a slowdown in the global economy. Despite the disappointing results, STANLEY BLACK & DECKER’s CEO, James M. Loree, remains optimistic about the future. “We are confident that the actions we are taking will enable us to deliver on our long-term financial commitments,” he said in a statement.

It is also focused on streamlining its operations and increasing its efficiencies. With a strong history of innovation and a solid portfolio of brands, STANLEY BLACK & DECKER is well-positioned to weather these challenges and emerge even stronger. For patient investors, the current dip in the stock price may present an attractive buying opportunity. Live Quote…

About the Company

VI Analysis – SWK Intrinsic Value

Stanley Black & Decker is a leading global provider of tools and storage, commercial electronic security, and engineered fastening systems. The company’s products are used in a variety of industries, including construction, manufacturing, and retail. Stanley Black & Decker has a strong history of innovation and is committed to continued product development and operational excellence. The company’s long-term potential is reflected in its strong fundamentals, which are reflected in the VI Line app. The fair value of Stanley Black & Decker shares is around $165.1, calculated by VI Line. The company’s stock is currently traded at $77.3, which represents a discount of 53%. More…

VI Peers

In the business world, competition is inevitable. Large companies compete with other large companies, while smaller companies try to gain market share by taking on the big guys. Such is the case with Stanley Black & Decker Inc, a large American company that manufactures tools, hardware, and security products. Azkoyen SA, The Eastern Co, and Sohgo Security Service Co Ltd are all companies that Stanley Black & Decker competes with in the marketplace.

– Azkoyen SA ($LTS:0DOG)

Azkoyen SA is a Spanish company that manufactures vending machines and other related products. The company has a market cap of 142.86 million as of 2022 and a return on equity of 11.63%. Azkoyen was founded in 1947 and is headquartered in Vitoria-Gasteiz, Spain. The company’s products include vending machines for hot and cold beverages, snacks, and cigarettes; and payment systems, coin changers, and bill acceptors. Azkoyen also offers maintenance and repair services for its products.

– The Eastern Co ($NASDAQ:EML)

The Eastern Co is a publicly traded company with a market capitalization of 133.23M as of 2022. The company has a return on equity of 9.56%. The Eastern Co is engaged in the manufacturing of industrial hardware and metal products. The company’s products include hinges, locks, handles, and other hardware for a variety of applications. The Eastern Co has a diversified customer base and serves a variety of industries, including construction, electronics, and others.

– Sohgo Security Service Co Ltd ($TSE:2331)

Sohgo Security Service Co Ltd is a Japanese security company that provides security services to businesses and households. The company has a market cap of 366.47B as of 2022 and a return on equity of 9.44%. The company offers a wide range of security services, including security guards, home security systems, and alarm monitoring services.

Summary

STANLEY BLACK & DECKER is a diversified global manufacturer and marketer of hand tools, power tools, and related accessories, with a focus on creating value for professional tradesmen. The Company’s businesses include Stanley Black & Decker Tools, Stanley Black & Decker Power Tools, and Stanley Black & Decker Accessories. The company’s revenue and earnings per share both came in below analyst expectations.

Despite the weak second quarter results, Stanley Black & Decker remains a well-positioned company with a strong balance sheet and a history of dividend growth. The company’s dividend yield is attractive, and the stock may be worth considering for income-oriented investors.