Does Stanley Black & Decker Inc. (SWK) offer a good opportunity for investors?

Stanley Black & Decker Inc. (NYSE: SWK) stock fell -0.04% on Friday to $93.66 against a previous-day closing price of $93.70. With 2.51 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.92 million shares. During the session, the Tools & Accessories company that operates in wider Industrials sector, reached to the highest price of $95.63 whereas the lowest price it dropped to was $93.53. The 52-week range on SWK shows that it touched its highest point at $203.69 and its lowest point at $91.88 during that stretch. It currently has a 1-year price target of $134.46. With its current market cap of 17.06 billion, SWK has annualized dividend of $3.20 while the current yield stands at 3.42%. Beta for the stock currently stands at 1.30.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SWK was down-trending over the past week, with a drop of -4.99%, but this was down by -15.55% over a month. Three-month performance dropped to -28.44% while six-month performance fell -46.27%. The stock lost -51.97% in the past year, while it has lost -50.34% so far this year. A look at the trailing 12-month EPS for SWK yields 5.72 with Next year EPS estimates of 9.32. For the next quarter, that number is 1.74. This implies an EPS growth rate of 34.40% for this year and 18.46% for next year. EPS is expected to grow by 2.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 8.10%.

Float and Shares Shorts:

At present, 163.03 million SWK shares are outstanding with a float of 150.54 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.25 million, which was 3.48% higher than short shares on Jun 14, 2022. In addition to Mr. Donald Allan Jr. as the firm’s Pres, CEO & Director, Ms. Janet M. Link serves as its Sr. VP, Gen. Counsel & Sec.

Institutional Ownership:

Through their ownership of 94.74% of SWK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.98% of SWK, in contrast to 40.21% held by mutual funds. Shares owned by individuals account for 1.83%. As the largest shareholder in SWK with 11.92% of the stake, The Vanguard Group, Inc. holds 17,986,920 shares worth 17,986,920. A second-largest stockholder of SWK, Massachusetts Financial Services, holds 8,096,991 shares, controlling over 5.36% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SWK, holding 7,588,828 shares or 5.03% stake. With a 2.95% stake in SWK, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 4,447,875 shares are owned by the mutual fund manager. The MFS Value Fund, which owns about 2.41% of SWK stock, is the second-largest Mutual Fund holder. It holds 3,636,808 shares valued at 381.36 million. Vanguard Mid Cap Index Fund holds 2.30% of the stake in SWK, owning 3,475,652 shares worth 364.46 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SWK since 20 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SWK analysts setting a high price target of $204.00 and a low target of $90.00, the average target price over the next 12 months is $128.20. Based on these targets, SWK could surge 117.81% to reach the target high and fall by -3.91% to reach the target low. Reaching the average price target will result in a growth of 36.88% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SWK will report FY 2022 earnings on 01/26/2023. Analysts have provided yearly estimates in a range of $10.06 being high and $5.15 being low. For SWK, this leads to a yearly average estimate of $7.13. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Stanley Black & Decker Inc. surprised analysts by -$0.36 when it reported $1.77 EPS against a consensus estimate of $2.13. The surprise factor in the prior quarter was $0.41. Based on analyst estimates, the high estimate for the next quarter is $3.01 and the low estimate is $0.65. The average estimate for the next quarter is thus $1.47.

Summary of Insider Activity:

Insiders traded SWK stock several times over the past three months with 13 Buys and 0 Sells. In these transactions, 18,322 shares were bought while 0 shares were sold. The number of buy transactions has increased to 76 while that of sell transactions has risen to 71 over the past year. The total number of shares bought during that period was 127,470 while 70,780 shares were sold.

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