For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks. China Igniter and Spark Generator
What if you'd invested in A.O. Smith (AOS) ten years ago? It may not have been easy to hold on to AOS for all that time, but if you did, how much would your investment be worth today?
A.O. Smith's Business In-Depth
With that in mind, let's take a look at A.O. Smith's main business drivers.
Headquartered in Milwaukee, WI, A. O. Smith Corporation is one of the leading manufacturers of commercial and residential water heating equipment, and water treatment products of the world. The company specializes in offering innovative, and energy-efficient solutions and products, which are developed and sold on a global platform. A. O. Smith reports operations under two geographic segments — North America and Rest of World. The segments are briefly discussed below: North America (75.1% of total segmental sales generated in 2022): This segment engages in manufacturing and marketing of water heaters, boilers, water treatment products, commercial solar water heating systems, expansion tanks, swimming pool and spa heaters, and others. These products are sold primarily to the company's commercial and residential customers in North America. Main product brands under this segment are Lochinvar, Aquasana, Bradford White, Rheem, Rinnai, Navien and Aerco. Rest of World (24.9% of total segmental sales generated in 2022): This segment comprises operations in India, China, the Middle East and Europe markets. It primarily manufactures and markets vast products, including fully modulating non-condensing gas tankless water heater. Apart from this, the segment manufactures air purifier and water treatment products, especially in Asia. In China, the company develops water purifier, combi boiler, gas tankless, residential & commercial heat pump, air purifier, and other products.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in A.O. Smith ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2013 would be worth $2,829.37, or a 182.94% gain, as of November 21, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 155.27% and gold's return of 49.14% over the same time frame.
Analysts are anticipating more upside for AOS.
Improving supply chains and robust demand for residential water heaters in North America are expected to drive A. O. Smith’s growth. Higher sales from India and improvement in China operations after the pandemic-related shutdowns are supporting the Rest of the World unit’s performance. The company’s improved earnings guidance for 2023 sparks optimism. AOS’ efforts to return value to shareholders add to its appeal. Amid these positives, shares of AOS have outperformed its industry in a year. However, weakness in the core North America unit due to lower boiler sales raises concerns. Given the general weakness in the economy and lower demand, AOS has provided a conservative projection for sales in 2023. Foreign currency woes and an anticipated increase in steel costs may weigh on AOS’ performance in 2023.
The stock has jumped 14.64% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2023; the consensus estimate has moved up as well.
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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
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