AXALTA COATING SYSTEMS LTD (NYSE:AXTA): A Prime Candidate for Value Investors

Investors looking for undervalued possibilities frequently use screening methods that find companies trading for less than their inherent worth and also having good basic financial condition. One method is the "Decent Value" screen, which selects for stocks with good valuation scores, usually above 7 on a 10-point scale, and also confirms acceptable results in profitability, financial condition, and growth. This process tries to find securities that the market might not notice even though they have basic financial soundness, matching the main ideas of value investing which involve purchasing good assets for less than their true worth.

AXALTA COATING SYSTEMS LTD (NYSE:AXTA) shows a notable example in this investment structure. The worldwide coatings producer works with industrial clients and automotive original equipment manufacturers via its Performance Coatings and Mobility Coatings divisions. The company's basic financial picture indicates it could be the kind of undervalued possibility value investors usually look for.

Valuation Metrics

The company's valuation picture is notable, receiving a 7 out of 10 in ChartMill's evaluation. A number of measurements suggest possible undervaluation:

• Price-to-Earnings ratio of 11.73 is better than the industry average of 19.58 and the S&P 500's 26.34
• Forward P/E ratio of 10.48 points to continued earnings expansion at sensible multiples
• Enterprise Value to EBITDA and Price/Free Cash Flow ratios are both lower than about two-thirds of industry competitors
• Low PEG ratio shows the present valuation properly accounts for anticipated expansion

For value investors, these valuation measurements are important because they help find the difference between market price and inherent worth, the basic idea of value investing.

Profitability Assessment

AXTA shows very good operational effectiveness with a profitability score of 9 out of 10:

• Return on Equity of 19.96% is better than 89% of chemical industry competitors
• Operating Margin of 15.97% is in the top fifth of the industry
• Profit Margin of 8.81% is higher than 82% of rivals
• All main margin groups have displayed improvement in recent years

Good profitability is necessary for value investments because it shows the company has lasting competitive benefits and effective operations, important elements in establishing long-term inherent worth.

Financial Health

With a health score of 5 out of 10, AXTA displays varied but acceptable financial traits:

• Current Ratio of 2.20 shows good short-term liquidity
• Quick Ratio of 1.59 suggests sufficient capacity to meet immediate responsibilities
• Debt/Equity ratio of 1.49, while higher, is still better than 74% of industry competitors
• Altman-Z score of 2.32 shows low near-term bankruptcy danger

Value investors look carefully at financial condition because it decides a company's capacity to survive economic declines and continue operating while the market realizes its inherent worth.

Growth Prospects

AXTA's growth score of 4 out of 10 shows a modest but getting better path:

• Earnings Per Share increased 20.77% in the last year
• Expected EPS expansion of 10.08% each year in the coming years
• Revenue expansion has been slight but steady in the past
• EPS expansion rate is speeding up compared to past patterns

While not a high-expansion story, the company displays the consistent, quantifiable expansion that value investors like, as it allows for more dependable inherent value calculations and lowers guesswork in the investment idea.

The full fundamental analysis report for AXTA gives more information on these measurements and their industry comparisons.

For investors wanting to find similar possibilities, the Decent Value Stocks screen consistently finds companies meeting these requirements of good valuation together with acceptable basic finances.

Disclaimer: This analysis is based on fundamental data and screening processes for informational purposes only. It does not form investment advice, and investors should do their own research and think about their personal financial situations before making investment choices. Past results do not ensure future outcomes, and all investments have risk including possible loss of original investment.