Tempur Sealy International Inc. (TPX) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Tempur Sealy International Inc. (NYSE: TPX) stock fell -4.77% on Friday to $26.74 against a previous-day closing price of $28.08. With 1.43 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.43 million shares. During the session, the Furnishings Fixtures & Appliances company that operates in wider Consumer Cyclical sector, reached to the highest price of $27.82 whereas the lowest price it dropped to was $26.49. The 52-week range on TPX shows that it touched its highest point at $50.51 and its lowest point at $20.03 during that stretch. It currently has a 1-year price target of $30.22. With its current market cap of 4.76 billion, TPX has annualized dividend of $0.40 while the current yield stands at 1.50%. Beta for the stock currently stands at 1.83.

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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 TPX was down-trending over the past week, with a drop of -0.82%, but this was up by 19.64% over a month. Three-month performance surged to 0.26% while six-month performance fell -32.63%. The stock lost -37.35% in the past year, while it has lost -43.14% so far this year. A look at the trailing 12-month EPS for TPX yields 2.95 with Next year EPS estimates of 2.93. For the next quarter, that number is 0.74. This implies an EPS growth rate of 86.30% for this year and 8.12% for next year. EPS is expected to grow by 6.10% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 29.30%.

Float and Shares Shorts:

At present, 174.10 million TPX shares are outstanding with a float of 174.03 million shares on hand for trading. On Jul 14, 2022, short shares totaled 13.58 million, which was 7.74% higher than short shares on Jun 14, 2022. In addition to Mr. Scott L. Thompson as the firm’s Chairman, CEO & Pres, Mr. Bhaskar Rao serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 100.93% of TPX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 52.90% of TPX, in contrast to 46.34% held by mutual funds. Shares owned by individuals account for 15.52%. As the largest shareholder in TPX with 10.46% of the stake, Fidelity Management & Research Co holds 18,367,402 shares worth 18,367,402. A second-largest stockholder of TPX, The Vanguard Group, Inc., holds 17,359,831 shares, controlling over 9.89% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in TPX, holding 14,545,518 shares or 8.29% stake. With a 2.89% stake in TPX, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 5,073,842 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.80% of TPX stock, is the second-largest Mutual Fund holder. It holds 4,910,429 shares valued at 104.94 million. John Hancock III – Disciplined Va holds 2.48% of the stake in TPX, owning 4,350,702 shares worth 92.97 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TPX since 11 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 0 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 TPX analysts setting a high price target of $35.00 and a low target of $22.00, the average target price over the next 12 months is $30.22. Based on these targets, TPX could surge 30.89% to reach the target high and fall by -17.73% to reach the target low. Reaching the average price target will result in a growth of 13.01% 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. TPX will report FY 2022 earnings on 02/16/2023. Analysts have provided yearly estimates in a range of $2.79 being high and $2.65 being low. For TPX, this leads to a yearly average estimate of $2.71. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Tempur Sealy International Inc. surprised analysts by -$0.00 when it reported $0.58 EPS against a consensus estimate of $0.58. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $0.80 and the low estimate is $0.68. The average estimate for the next quarter is thus $0.74.

Summary of Insider Activity:

Insiders traded TPX stock several times over the past three months with 1 Buys and 0 Sells. In these transactions, 2,700 shares were bought while 0 shares were sold. The number of buy transactions has increased to 58 while that of sell transactions has risen to 55 over the past year. The total number of shares bought during that period was 1,867,171 while 1,216,684 shares were sold.

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