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Investing Primer: Sherwin Williams Paints the Tape Red (SHW)

Posted on August 30, 2021

Sherwin Williams Co. (NYSE:SHW) provides colorful chemicals to splash on walls and other surfaces, poisoning those who occupy those spaces thereafter as the inevitable ‘outgassing’ occurs.

But we’re not here to knock the corporate world and its myriad means of profiting from wholesale death and disease.

Why get into all that?

We’re here to make money.

That way, we’ll no longer have to rely on their lunatic products, services and brandings.

We’ll have our own operating farms and gardens to sustain ourselves.

We’ll play the game…

Sherwin Williams missed both revenue and earnings estimates last month, but the stock kept climbing.

Why?

Because that’s the world we live in.

There’s talk that the purchase of the SIKA line of chemical adhesives will boost their numbers down the road – and it’s very possible.  But not by the margin currently reflected in the stock price.

Fundamentals

Consider:

  • The stock’s P/E is far too high at 37.95,
  • Its dividend yield is 0.73%,
  • Its Price to Book is a grossly exaggerated 28.02,
  • Debt to Equity is 3.19, and
  • Consensus earnings estimates have been revised DOWNWARD for the last month.
  • And to top it off, insiders have sold nearly one third of their holdings over the last six months.

It’s a filthy business!

So just paint over it.

Those insiders, by the way, unloaded to the tune of $120 million over the period – of which a full $83 million was dumped in just the last 30 days!

Do they know something we don’t?

Is their financial hygiene superior to ours?

Did they take more than one towel?

Have a look at the daily chart –

As we approach the Day of Judgment, we wish you and yours find only favor in the eyes of the Al-mighty living G-d of Abraham, Isaac and Jacob.

And may you bring Him only נַחַת רוּחַ.

With kind regards,

Hugh L. O’Haynew

 

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