A. O. Smith Corporation (AOS)
Industrials · NYQ · US
Fundamentals
Valuation and ratings
A. O. Smith Corporation trades at USD60.53, which is 47% above the USD31.88 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 60 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 15.9 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About A. O. Smith Corporation
A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, homes, apartments, and condominiums, and other large commercial buildings; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, Impact, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms, as well as offers Aquasana branded products directly to consumers through e-commerce channels; and A. O. Smith branded water treatment products through dealer network and Amazon. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.
AOS passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
9 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Impax Asset Management, Impax Asset Management Group plc$282.11M · 2.0% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$63.02M · 0.0% of book
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$49.09M · 0.1% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$40.05M · 0.0% of book
- Joel Greenblatt, Gotham Asset Management, LLC$19.00M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is A. O. Smith Corporation (AOS) undervalued?
Against our discounted cash flow estimate of USD31.88, AOS at USD60.53 is 47% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own AOS?
9 of the institutions we track reported a position in AOS in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is AOS's P/E ratio?
AOS trades at 15.9 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.