RPM International, a key player in the specialty chemicals industry, presents an intriguing opportunity for retail investors. With a market capitalization of
15B and a robust EBITDA of
1.08B, the company demonstrates solid financial health. The stock's price-to-earnings ratio of 29.64X suggests a premium valuation, which might be justified by its consistent performance and strategic market positioning. However, with a probability of bankruptcy at 9.68%, potential investors should weigh the risks alongside the company's growth prospects.
Key Takeaways
By examining key indicators for RPM International and FUL, you can assess how market fluctuations impact their stock prices and determine if combining them in a portfolio might reduce risk. Pair trading strategies, such as going long on FUL and short on RPM International, can also be explored. For more details, visit our [pair correlation module](#) to see how these stocks interact.
Now, let's look at asset utilization. This metric shows how much revenue a company generates per dollar of assets. RPM International boasts an asset utilization ratio of 111.37%, meaning it earns $1.11 for every dollar of assets. This high ratio indicates that RPM International is effectively using its assets in daily operations.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in RPM International. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its
performance over time. Several factors influence the investment perspective on RPM International, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.
How important is RPM International's Liquidity
RPM International
financial leverage refers to using borrowed capital as a funding source to finance RPM International ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. RPM International 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. Financial leverage can amplify the potential profits to RPM International's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of RPM International's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between RPM International's total debt and its cash.
RPM International Gross Profit
RPM International Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing RPM International previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show RPM International Gross Profit growth over the last 10 years. Please check RPM International's
gross profit and other
fundamental indicators for more details.
Going after RPM Financials
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Lets now take a look at RPM International revenue. Based on the latest financial disclosure, RPM International reported 7.34
B of revenue.
This is 6.66% lower than that of the Chemicals sector and 64.84% higher than that of the
Materials industry. The revenue for all United States stocks is 22.25% higher than that of RPM International. As for H B we see revenue of 3.57
B, which is 19.8% lower than that of the Materials
| RPM | 7.34 Billion |
| Sector | 4.45 Billion |
| FUL | 3.57 Billion |
"Buy low, sell high" is a classic mantra in investing, and when it comes to RPM International, retail investors might find this advice particularly relevant. With a current ratio of 1.99, RPM International demonstrates a solid ability to cover its short-term liabilities, which is a reassuring sign of financial health. Despite a modest operating margin of 0.13%, the company has managed to maintain a net income of 589.44 million, indicating effective cost management in a competitive specialty chemicals industry. However, with a price-to-earnings ratio of 29.64, the stock may be considered overvalued by some, suggesting that potential investors should weigh the company's growth prospects against its current valuation..
RPM may start a bounce back in May
RPM International's recent drop in its Treynor Ratio to -0.12 suggests its risk-adjusted returns are lagging behind the market, hinting at a potential dip in stock price. However, this could also signal a buying opportunity for investors looking to capitalize on a possible rebound by May, driven by RPM's solid fundamentals and strategic plans. While caution is warranted due to the current metric, there's still room for optimism if market conditions stabilize and RPM leverages its growth opportunities. The stock's low volatility, with a skewness of -0.27 and kurtosis of 0.44, can guide investors in timing their trades. Understanding these volatility trends is crucial, especially in bear markets, where increased volatility can affect RPM's stock price and prompt portfolio adjustments.
Our Final Take On RPM International
Although some companies within the specialty chemicals industry are still a little expensive, even after the recent corrections, RPM International may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither pick up nor short any shares of RPM International at this time. The RPM International risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to RPM International.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile 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 Ellen Johnson do not own shares of RPM International. Please refer to our
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