DB:AL3

Stock Analysis Report

Executive Summary

Alamo Group Inc. designs, manufactures, distributes, and services agricultural and infrastructure maintenance equipment for governmental and industrial use worldwide.

Rewards

Trading at 53.7% below its fair value

Earnings are forecast to grow 19.53% per year

Earnings grew by 16.3% over the past year

Risk Analysis

No risks detected for AL3 from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has Alamo Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AL3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

AL3

0.09%

DE Machinery

0.06%

DE Market


1 Year Return

59.0%

AL3

-6.0%

DE Machinery

14.8%

DE Market

Return vs Industry: AL3 exceeded the German Machinery industry which returned -4.1% over the past year.

Return vs Market: AL3 exceeded the German Market which returned 16.8% over the past year.


Shareholder returns

AL3IndustryMarket
7 Day3.6%0.09%0.06%
30 Day11.5%0.7%1.8%
90 Day9.4%9.3%7.1%
1 Year59.8%59.0%-3.0%-6.0%18.4%14.8%
3 Yearn/a-10.7%-17.2%17.4%7.0%
5 Yearn/a11.9%-0.8%27.9%10.4%

Price Volatility Vs. Market

How volatile is Alamo Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Alamo Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AL3 (€110) is trading below our estimate of fair value (€237.81)

Significantly Below Fair Value: AL3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AL3 is poor value based on its PE Ratio (21.1x) compared to the Machinery industry average (16.7x).

PE vs Market: AL3 is poor value based on its PE Ratio (21.1x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: AL3 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: AL3 is overvalued based on its PB Ratio (2.7x) compared to the DE Machinery industry average (1.5x).


Next Steps

Future Growth

How is Alamo Group forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

19.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AL3's forecast earnings growth (19.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: AL3's earnings (19.5% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: AL3's earnings are forecast to grow, but not significantly.

Revenue vs Market: AL3's revenue (13.3% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: AL3's revenue (13.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AL3's Return on Equity is forecast to be high in 3 years time (25.2%)


Next Steps

Past Performance

How has Alamo Group performed over the past 5 years?

13.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AL3 has high quality earnings.

Growing Profit Margin: AL3's current net profit margins (6.5%) are higher than last year (6%).


Past Earnings Growth Analysis

Earnings Trend: AL3's earnings have grown by 13.6% per year over the past 5 years.

Accelerating Growth: AL3's earnings growth over the past year (16.3%) exceeds its 5-year average (13.6% per year).

Earnings vs Industry: AL3 earnings growth over the past year (16.3%) exceeded the Machinery industry -13.7%.


Return on Equity

High ROE: AL3's Return on Equity (12.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Alamo Group's financial position?


Financial Position Analysis

Short Term Liabilities: AL3's short term assets ($524.5M) exceed its short term liabilities ($120.2M).

Long Term Liabilities: AL3's short term assets ($524.5M) exceed its long term liabilities ($185.2M).


Debt to Equity History and Analysis

Debt Level: AL3's debt to equity ratio (27.2%) is considered satisfactory.

Reducing Debt: AL3's debt to equity ratio has reduced from 56.5% to 27.2% over the past 5 years.

Debt Coverage: AL3's debt is well covered by operating cash flow (35.7%).

Interest Coverage: AL3's interest payments on its debt are well covered by EBIT (18.5x coverage).


Balance Sheet

Inventory Level: AL3 has a high level of physical assets or inventory.

Debt Coverage by Assets: AL3's debt is covered by short term assets (assets are 3.5x debt).


Next Steps

Dividend

What is Alamo Group's current dividend yield, its reliability and sustainability?

0.40%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%1.4%markettop25%3.5%industryaverage2.2%forecastin3Years0.4%

Current dividend yield vs market & industry

Notable Dividend: AL3's dividend (0.41%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: AL3's dividend (0.41%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: AL3 is not paying a notable dividend for the German market, therefore no need to check if payments are stable.

Growing Dividend: AL3 is not paying a notable dividend for the German market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: AL3 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AL3's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Alamo Group's salary, the management and board of directors tenure and is there insider trading?

8.9yrs

Average management tenure


CEO

Ron Robinson (67yo)

20.5yrs

Tenure

US$2,770,809

Compensation

Mr. Ronald A. Robinson, also known as Ron, has been the Chief Executive Officer and President of Alamo Group Inc. since July 7, 1999 and served as its Interim Chairman of the Board from November 30, 2017 t ...


CEO Compensation Analysis

Compensation vs Market: Ron's total compensation ($USD2.77M) is above average for companies of similar size in the German market ($USD1.50M).

Compensation vs Earnings: Ron's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.9yrs

Average Tenure

59.5yo

Average Age

Experienced Management: AL3's management team is seasoned and experienced (8.9 years average tenure).


Board Age and Tenure

3.4yrs

Average Tenure

62yo

Average Age

Experienced Board: AL3's board of directors are considered experienced (3.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€7,61220 Sep 19
Janet Pollock
EntityIndividual
Role
Head of Human Resources
VP of Human Resources
Shares70
Max Price€108.74
Sell€95,29016 Aug 19
Jeffery Leonard
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Industrial Division
Shares1,000
Max Price€95.29
Sell€117,58016 Aug 19
Dan Malone
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares1,200
Max Price€97.98
Sell€7,33512 Aug 19
Janet Pollock
EntityIndividual
Role
Head of Human Resources
VP of Human Resources
Shares76
Max Price€96.51
Sell€126,20307 Aug 19
Dan Malone
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares1,299
Max Price€97.15
Sell€195,22701 Jul 19
Dan Malone
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares2,206
Max Price€88.89
Sell€26,82321 Jun 19
Edward Rizzuti
EntityIndividual
Role
Chief Legal Officer
VP, General Counsel & Secretary
Shares300
Max Price€89.41
Sell€61,83021 Jun 19
Richard Wehrle
EntityIndividual
Role
Senior Key Executive
VP,Treasurer & Corporate Controller
Shares700
Max Price€88.33
Sell€43,60607 Jun 19
Richard Raborn
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Agricultural Division
Shares500
Max Price€87.21
Sell€48,60221 May 19
Richard Raborn
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Agricultural Division
Shares569
Max Price€85.42
Sell€21,26717 May 19
Edward Rizzuti
EntityIndividual
Role
Chief Legal Officer
VP, General Counsel & Secretary
Shares250
Max Price€85.07
Sell€692,87625 Mar 19
David Grzelak
EntityIndividual
Shares8,000
Max Price€86.61
Buy€86,71007 Mar 19
Richard Parod
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max Price€86.94
Sell€56,56107 Mar 19
Dan Malone
EntityIndividual
Role
Chief Financial Officer
Executive VP
Shares650
Max Price€87.02

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Ron Robinson (67yo)

    President

    • Tenure: 20.5yrs
    • Compensation: US$2.77m
  • Robert George (72yo)

    Vice President

    • Compensation: US$374.80k
  • Richard Wehrle (62yo)

    VP,Treasurer & Corporate Controller

    • Tenure: 18.7yrs
    • Compensation: US$375.63k
  • Dan Malone (59yo)

    Executive VP

    • Tenure: 13yrs
    • Compensation: US$644.47k
  • Jeffery Leonard (59yo)

    Executive Vice President of Industrial Division

    • Compensation: US$910.53k
  • Ed Rizzuti (49yo)

    VP, General Counsel & Secretary

    • Tenure: 4.5yrs
  • Janet Pollock (60yo)

    VP of Human Resources

    • Tenure: 1.7yrs
  • Rick Raborn (53yo)

    Executive Vice President of Agricultural Division

    • Tenure: 4.8yrs
    • Compensation: US$694.88k

Board Members

  • Ron Robinson (67yo)

    President

    • Tenure: 20.5yrs
    • Compensation: US$2.77m
  • Rick Parod (66yo)

    Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$137.00k
  • Roderick Baty (65yo)

    Independent Chairman of the Board

    • Tenure: 1.7yrs
    • Compensation: US$170.00k
  • Lorie Tekorius (52yo)

    Independent Director

    • Tenure: 0.08yrs
  • Bob Bauer (61yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$141.50k
  • Eric Etchart (62yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$154.00k
  • Tracy Jokinen (50yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$151.20k

Company Information

Alamo Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Alamo Group Inc.
  • Ticker: AL3
  • Exchange: DB
  • Founded: 1955
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$1.526b
  • Listing Market Cap: US$1.376b
  • Shares outstanding: 11.83m
  • Website: https://www.alamo-group.com

Number of Employees


Location

  • Alamo Group Inc.
  • 1627 East Walnut
  • Seguin
  • Texas
  • 78155
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALGNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 1993
AL3DB (Deutsche Boerse AG)YesCommon StockDEEURMar 1993

Biography

Alamo Group Inc. designs, manufactures, distributes, and services agricultural and infrastructure maintenance equipment for governmental and industrial use worldwide. The company offers hydraulically-powered and tractor-mounted mowers, including boom-mounted mowers; other cutters and replacement parts for heavy-duty and intensive uses; and heavy duty, tractor- and truck-mounted mowing, and vegetation maintenance equipment and replacement parts. It also provides truck-mounted air vacuum, mechanical broom, and regenerative air sweepers; pothole patchers; leaf collection equipment and replacement brooms; parking lot sweepers; excavators; catch basin cleaners and roadway debris vacuum systems; truck-mounted vacuum trucks, combination sewer cleaners, and hydro excavators; ice control products; snow plows and heavy duty snow removal equipment, hitches, and attachments, as well as ice control products; and public works and runway maintenance products, parts, and services. In addition, the company offers rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades, and replacement parts, as well as self-propelled zero turn radius mowers; cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts; heavy-duty mechanical rotary mowers, snow blowers, and rock removal equipment; and replacement parts. Further, it provides rotary mowers and tractor attachments; agricultural implements; hydraulic and boom-mounted hedge and grass cutters, and other tractor attachments and implements; hedgerow cutters, industrial grass mowers, and agricultural seedbed preparation cultivators; self-propelled sprayers and multi-drive load-carrying vehicles; cutting blades; hydraulic and mechanical boom mowers; and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/17 22:33
End of Day Share Price2020/01/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.