AMETEK Inc (AME, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $151.23, AMETEK Inc has witnessed a daily gain of 0.28%, marked against a three-month change of -4.95%. A thorough analysis, underlined by the GF Score, suggests that AMETEK Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a moderate GF Value rank, GuruFocus assigned AMETEK Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding AMETEK Inc Business
AMETEK Inc, with a market cap of $34.90 billion and sales of $6.49 billion, operates as a diversified industrial conglomerate. The company's operating margin stands at a healthy 25.58%. AMETEK Inc is divided into two main segments: the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG). EIG focuses on advanced instruments for various end markets, while EMG supplies highly engineered automation solutions, among other products. Approximately half of the firm's sales are made in the United States. AMETEK Inc's long-standing asset-light strategy emphasizes growth through acquisitions, R&D, operational efficiencies, and market expansion.
Financial Strength Breakdown
AMETEK Inc's Financial Strength rating is a testament to its resilient balance sheet and prudent capital management. The company's Interest Coverage ratio of 20.58 indicates a strong ability to meet interest obligations, aligning with the principles of Benjamin Graham. An Altman Z-Score of 6.47 further demonstrates AMETEK Inc's defense against financial distress. The strategic Debt-to-Revenue ratio of 0.33 solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank of AMETEK Inc reflects its superior ability to generate profits. The company's Operating Margin has consistently increased over the past five years, indicating growing efficiency. Similarly, the Gross Margin has also shown a steady rise, showcasing AMETEK Inc's ability to convert revenue into profit. The Piotroski F-Score and a Predictability Rank of 4.5 stars further confirm the company's solid financial situation and consistent operational performance.
Growth Rank Breakdown
AMETEK Inc's high Growth Rank underscores its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 5.7% is competitive within the Industrial Products industry. The significant increase in EBITDA over the past few years highlights AMETEK Inc's growth capabilities.
Next Steps
Considering AMETEK Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking similar investment opportunities can explore more companies with strong GF Scores using the GF Score Screen.
With its strategic approach to growth and a solid financial foundation, AMETEK Inc stands as a compelling choice for value investors. Will this industrial powerhouse continue to outperform the market and reward its shareholders? The numbers certainly suggest so, but as with any investment, vigilance and further research are key to capitalizing on its potential.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
