UniFirst Corp: Growth Potential At A Discount

The Broad Market Index was down 1.25% last week and 57% of stocks outperformed the index. Among stocks underperforming the market is UniFirst Corp (NYSE: UNF) where the stock price continues to suffer despite displaying strong top-line fundamentals.

The recent SEC filing update is 46% complete. The volume of SEC filings will continue to increase in the coming weeks.

Investors do not wait?

The population of extended-share-price companies has increased with the rally in shares last month. When looking for good BUY opportunities in this environment look for companies with strong fundamentals with a depressed share price. Otos.io will help you find them.

UniFirst Corp (UNF) $202.97 BUY this rich company getting better (not investment advice)

UniFirst Corp has been a profitable company with an inconsistently high cash return on total capital of 11.2% on average over the past 20 years. Over the long term the shares of UniFirst Corp have advanced by 26% relative to the broad market index.

The shares have been highly correlated with trends in Financial Condition Factors. The dominant factor in the Financial Condition group is assets to equity (inverted) which low and rising and has been 87% correlated with the share price with a five-quarter lead.

Cash from operations ROI continues to increase and has been historically correlated (39%) with the direction of the share price.

The company is recording a low and rising gross profit margin while the EBITDA Profit margin (EBITDA) is high and rising and has been correlated with the share price.

Currently, sales growth is 6.8% which is high in the record of the company and higher than last quarter.

The current indicated annual dividend produces a yield of 0.3%. Five-year average dividend growth is 0.2%. Current trailing operating cash-flow coverage of the dividend is 26.2 times

More recently, the shares of UniFirst Corp have advanced by 18% since the January 2019 low. The shares are trading at lower end of the volatility range in a 13-month rising relative share price trend. The current depressed share price provides a good opportunity to buy the shares of this evidently accelerating company.

The more stable the pot appears, the better the attributes. Green and gold are good. Red is bad and the more intense the red the more urgent the call to action.

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Pierre Raymond is a 25-year veteran of the Financial Services industry. Driven by his passion for financial technology he has transitioned from being a quantitative stock picker to an award-winning hedge fund manager, credit risk manager to currently a multipurpose risk IT banking consultant. Pierre is the co-founder of Global Equity Analytics & Research Services LLC (GEARS) and a current partner at OTOS Wealth Systems Inc.

Disclaimer: This article is not an investment recommendation, Please see our disclaimer - Get our 10 free ...

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