SJF
CyclicalsValuation Breakdown
Cyclical companies (chemicals, oil & gas, basic resources) have earnings that swing dramatically with commodity prices and economic cycles. Valuing them on a single year's earnings is misleading: they look cheap at peaks and expensive at troughs. This model uses 7-year median EBITDA ("mid-cycle" earnings) and a 7-year median EV/EBITDA multiple to estimate what the firm is worth at a normal point in the cycle.
Valuation Track Record
Retroactive intrinsic value vs actual close price — SJF
Earnings Quality
Fiscal year 2025
Financial Forensics
Beneish M-Score · 2024
The Beneish M-Score of -3.9828 indicates a low likelihood of earnings manipulation, as it is well below the manipulation threshold of -1.78. However, the earnings quality metrics reveal significant weaknesses, particularly in cash conversion and revenue recognition, which raises concerns about the sustainability of reported earnings.
- Earnings Quality Score of 59.7/100 indicates potential issues, particularly with cash conversion at 40.0/100 and revenue recognition at 25.2/100.
- SGA (Sales, General, and Administrative expenses) ratio at 0.0643 suggests very low spending on operational support, which may indicate underinvestment in growth or potential cost-cutting measures that could affect future performance.
- Beneish M-Score of -3.9828 suggests a low likelihood of earnings manipulation, which is a positive signal for investors.
- Receivables quality score of 100.0/100 indicates strong management of accounts receivable, suggesting effective collection processes.
The ownership structure is fragmented with no single shareholder holding a controlling stake, which may lead to governance challenges and potential conflicts of interest among minority shareholders.
Investors should closely monitor cash flow performance and revenue recognition practices, considering a cautious approach until improvements in earnings quality metrics are observed. Engaging with management on their strategies for enhancing operational investments could provide further insights.
Generated by AI based on quantitative data. Not financial advice.
Quantitative Scores
Key Ratios
Company Overview
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