WOR is WORth a bet

$Worthington(WOR)$ is a US steel company with two main businesses - steel processing and pressure cylinders. The former accounted for about 2/3 of the Group revenue. The steel sector is cyclical. Any valuation of WOR should then be based on its performance over the steel cycle. The chart below shows such a valuation. The price of WOR has since declined to USD 43 giving a better margin of safety.

Valuation 

Not only is WOR underpriced, but it is also a fundamentally sound company.

  • It has a low DE ratio
  • It had been able to generate cash flow from operations yearly from 2010 to 2021. 
  • Its average ROA of 4.5 % for the past 12 years is reasonable compared to its peers.

Refer to my blog i4value.asia for the details of the fundamental analysis.   

I am a stock-picking value investor. I look for underpriced stocks with the goal of holding onto them for 6 to 8 years in order to generate both capital gains and dividends. WOR meets my criteria. 

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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