Corporate Webpages Flowserve Corporation
Flowserve Corporation (FLS) is an old-line company that's been
around in one form or another since 1912, but formed under its
present name in 1997 after a large merger. The company
manufactures parts used to control fluids and gasses flow in
various industrial and manufacturing processes. It appears to
us to get the bulk of its revenues from the oil and gas
industry, which latter has been suffering lately, with reduced
capital expenditures, and impacting FLS profits. However, the
company has a diversified list of clients in other industries,
including water treatment and desalinization plants. Its
customers include refineries, chemical plants, utilities,
industrial manufacturers, and paper plants to name a few.
It appears the company has the potential to rebound earnings
after recent bad years, and is a rare case of having a current
p/e ratio well below its average. It has a good website with
CEO Letter to Shareholders, pays a dividend between 1 and 2%
regularly, and appears to us to be well managed with proper reporting.
Because of its relation to oil and gas industry, the stock has
suffered, not participating much in the current stock market
boom. It looks to us like a potential trading range stock,
currently just outside the top of a recent trading range, ready
to break up, or break back down. Recent earnings reports have
exceeded Wall St. expectations. Analysts and particularly
researchers do not favor the stock. Institutions and neutral
but mutual funds are buying.
The company describes itself as a "pure play flow control
company." In that sense, it has a LOT of competitors. It has a
large amount of international business especiallly in developing
parts of the world. It maintains subsidiaries in a remarkable
number of world countries on most continents, and is based in Texas.
It has increasing debt and potential cash flow problems giving
it a substandard Zenith Index. That suggests potential
fundamental finance problems. But the company has been around a
long time and is well established. It continues to make acquisitions.
Despite the stock's appearance of a potential large upside
breakout, we would be tempted more to trade it as a channeling
range trading stock, where range-trading opportunities appear to abound in the
competitive flow control machinery industry.
02-07-2020: Flowserve Corporation (FLS): Flow Control Industrial Machinery Maker
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
Company Profile
Company History
News
Comparison with Peers
Bond Issue
Zenith Index
Financial Statements
Avg. P/E to Current P/E
Financial Ratios
Intrinsic Value (Disc. CashFlow)
Fair Value Estimator
Projected Earnings
Research Reports
Analysts' Opinions
Insider Activity
Institutional Activity
Sentiment
Short Interest
Standard & Poor's
Management's Discussion
Channel Potential
MACD Histogram
Intraday Chart
Val Idea
wpStock Consultant
Point & Figure Chart
Wall Street Analyzer
Marketspace Chart
Time Series Forecast
Neural Network Prediction
Stock Options
Ultimate Trading Systems
Recommendation
Corporate Wepages
Company Profile |
Company History |
News |
Comparison |
Similar Companies Performance:
Bond Issue |
Zenith Index |
Under current market conditions, a Zenith Index Score of 1.20 or above is required for a positive rating on this factor. 1.21 -1.30 is considered acceptable, 1.30-1.40 is considered strong and
> 1.40 is considered exceptionally strong. Accounting statements in this section often contain mistakes, especially in earlier years' totals, but data is deemed sufficient for us to give a rating. More accurate financial statements follow in the next section.
oil and gas, chemical and pharmaceuticals, power generation, and water
management markets, as well as general industries, including mining and
ore processing, pulp and paper, food and beverage, and other smaller
applications. The company distributes its products through direct sales,
distributors, and sales representatives. Flowserve Corporation was
incorporated in 1912 and is headquartered in Irving, Texas.
Last Trade: 47.37 52-Week Range: 54.16 - 39.75
Employees: 17,000 Avg.Volume: 649,841 Shares
Corporate Governance:
Pillar scores are Audit: 3; Board: 4; Shareholder Rights: 9; Compensation: 8.
(A lower number means less governance risk.)
EPS: 1.88 Dividend Amount: $ 0.76 Yield: 1.64%
Ex-Dividend Date: Dec 26, 2019 Payout Ratio: 40.43
Key Statistics:
Trailing P/E: 26.14 Target Price: 51.18
Qrtly Stock Price Growth (yoy): 5.29% Beta: 1.71
Qrtly S&P Index Growth (yoy): 4.60% Short Ratio: 6.19%
Qrtly Revenue Growth (yoy): 52.00% Shares Out: 130860000
Qrtly Earnings Growth (yoy): 142.70%
Book Value: 13.34 Debt/Equity: 87.12%
Price/Book Value: 0.00 Operating Profit Margin: 11.01%
Price/Sales: 0.00 Profit Margin: 6.39%
Market Cap: 6,430,000,000 Return on Equity: 14.99%
Enterprise Value: 0 Return on Assets: 5.68%
Operating Cash Flow: 190,831
Free Cash Flow: -63,919
Annual Income Statement: (All numbers in thousands)
Period Ending 12/31/2018 12/31/2017 12/31/2016
Total Revenue 3,832,666 3,660,831 3,991,462
Cost of Revenue 2,644,830 2,575,454 2,759,908
Gross Profit 1,187,836 1,085,377 1,231,554
Operating Expenses:
Research & Development 0 0 0
Selling, General & Administrative 943,714 903,864 965,322
Total Operating Expenses 943,714 903,864 965,322
Operating Income or Loss 244,122 181,513 266,232
Income from Continuing Operations:
Total Other Income/Expenses Net -16,153 137,795 14,524
Interest Expense 58,160 59,730 60,137
Income Before Taxes 176,274 263,007 223,423
Income Tax Expense 51,224 258,679 75,286
Net Income from Continuing Op.s 125,050 4,328 148,137
Non-recurring Events:
Extraordinary Items 5,379 1,676 3,077
Net Income 119,671 2,652 145,060
Net Income Avail to Common Shares 119,671 2,652 145,066
Annual Cash Flow Statement: (All numbers in thousands)
Period Ending 12/31/2018 12/31/2017 12/31/2016
Net Income 125,050 4,328 148,137
Operating Activities:
Depreciation 112,473 118,454 116,752
Changes in Accounts Recv'bls -25,448 60,216 37,695
Changes in Liabilities 106,838 249,464 137,895
Changes in Inventories -29,314 48,642 30,877
Changes in other Oper'g Acts -104,729 158,374 -147,097
Total Cash Flow f Operations 190,831 311,066 227,594
Investing Activities:
Capital Exenditures -83,993 -61,602 -89,699
Investments -3,663 0 -5,064
Other Cash Flows fr Investing 6,190 5,435 3,294
Total Cash Flows from Investing -81,466 176,600 -91,469
Financing Activities:
Dividends Paid -99,416 -99,233 -97,746
Sale of Purchase of Stock 0 0 0
Other Cash Flows fr Financing -13,868 -26,120 3,294
Total Cash Flows from Financing -173,284 -185,353 -130,839
Change in Cash & Cash Equiv. -83,762 336,283 718
Annual Balance Sheets: (All Numbers in Thousands)
Period Ending 12/31/2018 12/31/2017 12/31/2016
Current Assets:
Cash & Cash Equivalents 619,683 703,445 367,162
Short Term Investments 0 0 0
Net Receivables 792,434 856,711 894,749
Inventory 633,871 884,273 919,251
Other Current Assets 0 0 0
Total Current Assets 2,383,145 2,558,745 2,331,361
Long-Term Investments 1,566,730 1,639,829 1,605,779
Property, Plant & Equipt 610,096 671,796 723,628
Goodwill 1,197,640 1,218,188 1,205,054
Intangible Assets 190,550 210,049 214,528
Other Assets 190,164 199,722 181,014
Total Assets 4,616,277 4,910,474 4,742,762
Current Liabilities:
Accounts Payable 418,893 443,113 412,087
Current Portion LT Debt 168,744 223,249 240,817
Other Current Liabilities 0 0 0
Total Current Liabilities 1,080,975 1,242,908 1,178,141
Long Term Debt 1,499,658 1,485,258 0
Other Liabilities 0 0 0
Total Liabilities 2,955,497 3,239,520 3,073,567
Stockholder Equity:
Common Stock 220,991 220,991 220,991
Retained Earnings 3,543,007 3,503,947 3,632,163
Capital Surplus -566,830 -499,119 -618,241
Total Stockholder Equity 1,642,315 1,654,587 1,648,234
Flowserve Corporation (FLS) [Indices near +3.0, near zero,
or < zero bear special attention.]
P/E Ratio Tests:
P/E Ratio < 28? 1.0712 P/E Ratio > 5? 1.0000
P/E Ratio Vs Growth Rate: 3.0000 Forward P/E Ratio < 28? 0.0000
Price/Sales Ratio < 2.3? 1.0000 Inventory/Sales < 5%? 0.3023
Sales < $1 Billion? 0.2609 Operating Margin < 7.5%? 0.6812
Balance Sheet Tests:
Debt/Equity < 0.40? 0.4591 Long-Term Debt Service: 1.1074
LTD Being Reduced? -3.0000 Short-Term Debt Service: 0.0000
Current Ratio > 2? 1.1023 Working Capital >= 1.5? 0.6895
Leverage Ratio < 20%? 0.3178 Debt/Assets < 1? 3.0000
Quick Ratio > 1? 3.0000 Inventory Turnover > 1? 0.6717
Share Equity Increase: 1.9964 Market Cap.< 1.5 Billion? 0.2333
Intangibles < 3% Assets? 0.0998
Income Tests:
Profit Margin < 7.5%? 0.8520 EPS Annual Growth > 10%? 0.0022
Dividend Yield > 2.0%? 1.2195 EPS 3-yr Growth > 15? 0.1818
Enterprise Value/Revenue 1.6779 EPS Growth Consistent? 0.0000
Enterprise Value/EBITDA: 3.0000 Collection < 45 days? 0.5963
EPS Qrtly Growth > 10%? 0.0007 Gross Pft/Cur. LTD > 1? 3.0000
Borrowing Int. Rate < 6%? 1.5471
Stock Performance Tests:
Volatility > 25%? 1.0643 % Held by Insiders < 5%? 3.0000
Beta > 1.25? 1.3680 % Held by Institut. < 50? 0.4987
50 Da MA > 200 Da MA? 0.1210 % Held by Institut. > 30? 3.0000
52-Wk Change vs. S&P 500: 0.1017 Short Ratio > 5? 1.2380
Price/Book Value < 3? 3.0000 Short % of Float > 20? 0.2040
Return on Assets > 17%? 0.3341 Average Volume > 100,000? 3.0000
Cash Flow Tests:
Oper. C.F. > Lever'd C.F: -2.9855 Positive Free Cash Flow? -1.0000
Positive Oper. Cash Flow? 3.0000 Price to C.F.Ratio < 14?: 0.9702
Cash Flow / Assets > 10%? 0.9652
FLS Flowserve Corporation Overall Zenith Index: 0.9588
Financial Statements |
FLOWSERVE CORP (FLS) INCOME STATEMENT Fiscal year ends in December. USD in thousand 2014-12 2015-12 2016-12 2017-12 2018-12 TTM Revenue 4,877,885 4,561,030 3,991,462 3,660,831 3,832,666 3,863,547 Cost of revenue 3,163,268 3,073,712 2,759,908 2,575,454 2,644,830 2,595,904 Gross profit 1,714,617 1,487,318 1,231,554 1,085,377 1,187,836 1,267,643 Operating expenses Sales, General and administrative 936,900 971,611 965,322 903,864 943,714 886,915 Total operating expenses 936,900 971,611 965,322 903,864 943,714 886,915 Operating income 777,717 515,707 266,232 181,513 244,122 380,728 Interest Expense 60,322 65,270 60,137 59,730 58,160 56,540 Other income (expense) 15,795 -28,241 17,328 141,224 -9,688 9,553 Income before taxes 733,190 422,196 223,423 263,007 176,274 333,741 Provision for income taxes 208,305 148,922 75,286 258,679 51,224 78,842 Net income from continuing operations 524,885 273,274 148,137 4,328 125,050 254,899 Other -6,061 -5,605 -3,077 -1,676 -5,379 -7,921 Net income 518,824 267,669 145,060 2,652 119,671 246,978 Preferred dividend -12 -12 -6 0 0 0 Net income available to common shareholders 518,836 267,681 145,066 2,652 119,671 246,978 Earnings per share Basic 3.79 2.01 1.11 0.02 0.91 1.88 Diluted 3.76 2.00 1.11 0.02 0.91 1.88 Weighted average shares outstanding Basic 136,912 133,074 130,432 130,703 130,823 131,030 Diluted 137,843 133,811 130,975 131,358 131,271 131,626 ____________________________________________________________________________________________________________________________________________ FLOWSERVE CORP (FLS) BALANCE SHEET Fiscal year ends in December. USD in thousand 2014-12 2015-12 2016-12 2017-12 2018-12 Assets Current assets Cash Total cash 450,350 366,444 367,162 703,445 619,683 Receivables 1,082,447 988,391 894,749 856,711 792,434 Inventories 995,564 995,565 919,251 884,273 633,871 Deferred income taxes 158,912 155,982 0 0 0 Prepaid expenses 106,890 125,410 150,199 114,316 108,578 Other current assets 0 0 0 0 228,579 Total current assets 2,794,163 2,631,792 2,331,361 2,558,745 2,383,145 Non-current assets Property, plant and equipment Gross property, plant and equipment 1,530,862 1,613,641 1,605,779 1,639,829 1,566,730 Accumulated Depreciation -836,981 -855,214 -882,151 -968,033 -956,634 Net property, plant and equipment 693,881 758,427 723,628 671,796 610,096 Goodwill 1,067,255 1,223,986 1,205,054 1,218,188 1,197,640 Intangible assets 146,337 228,777 214,528 210,049 190,550 Deferred income taxes 31,419 26,264 87,178 51,974 44,682 Other long-term assets 234,965 234,604 181,014 199,722 190,164 Total non-current assets 2,173,857 2,472,058 2,411,402 2,351,729 2,233,132 Total assets 4,968,020 5,103,850 4,742,763 4,910,474 4,616,277 Liabilities and stockholders' equity Liabilities Current liabilities Short-term debt 53,131 60,434 85,365 75,599 68,218 Accounts payable 611,715 491,378 412,087 443,113 418,893 Deferred income taxes 12,957 11,386 0 0 0 Taxes payable 53,725 56,488 29,827 42,692 24,351 Accrued liabilities 188,234 256,229 240,817 223,249 168,744 Deferred revenues 325,625 323,595 262,339 277,538 202,458 Other current liabilities 226,488 160,452 147,706 180,717 198,311 Total current liabilities 1,471,875 1,359,962 1,178,141 1,242,908 1,080,975 Non-current liabilities Long-term debt 1,101,791 1,570,836 1,485,258 1,499,658 1,414,829 Pensions and other benefits 452,511 489,319 410,168 496,954 459,693 Minority interest 10,281 17,256 20,961 16,367 18,465 Total non-current liabilities 1,564,583 2,077,411 1,916,387 2,012,979 1,892,987 Total liabilities 3,036,458 3,437,373 3,094,528 3,255,887 2,973,962 Stockholders' equity Common stock 220,991 220,991 220,991 220,991 220,991 Other Equity -380,406 -540,043 -626,748 -505,473 -573,947 Additional paid-in capital 495,600 494,961 491,848 488,326 494,551 Retained earnings 3,415,738 3,587,120 3,632,163 3,503,947 3,543,007 Treasury stock -1,830,919 -2,106,785 -2,078,527 -2,059,558 -2,049,404 Accumulated other comprehensive income 10,558 10,233 8,507 6,354 7,117 Total stockholders' equity 1,931,562 1,666,477 1,648,234 1,654,587 1,642,315 Total liabilities and stockholders' equity 4,968,020 5,103,850 4,742,762 4,910,474 4,616,277 ____________________________________________________________________________________________________________________________________________ FLOWSERVE CORP (FLS) Statement of CASH FLOW Fiscal year ends in December. USD in thousand 2014-12 2015-12 2016-12 2017-12 2018-12 TTM Cash Flows From Operating Activities Net income 524,885 273,274 148,137 4,328 125,050 254,899 Depreciation & amortization 110,277 127,087 116,752 118,454 112,473 106,398 Investment/asset impairment charges 0 0 80,570 0 0 0 Stock based compensation 42,675 34,816 30,213 22,820 19,912 28,289 Change in working capital -124,512 -84,160 -147,097 158,374 -104,729 -71,538 Accounts receivable -79,655 50,441 37,695 60,216 -25,448 -29,318 Inventory -35,519 -26,232 30,877 48,642 -29,314 -51,310 Prepaid expenses -9,371 -121 -26,221 42,159 -7,869 12,257 Accounts payable 50,752 -113,639 -69,831 12,403 -4,823 7,251 Accrued liabilities -22,669 25,523 -97,668 -3,383 -18,248 -10,965 Other working capital -28,050 -20,132 -21,949 -1,663 -19,027 547 Other non-cash items 17,637 66,075 -981 7,090 38,125 -9,564 Net cash provided by operating activities 570,962 417,092 227,594 311,066 190,831 308,484 Cash Flows From Investing Activities Investments in property, plant, and equipmen -132,619 -181,861 -89,699 -61,602 -83,993 -78,641 Acquisitions, net 46,805 -353,654 -5,064 232,767 -3,663 0 Other investing activities 1,731 10,220 3,294 5,435 6,190 42,901 Net cash used for investing activities -84,083 -525,295 -91,469 176,600 -81,466 -35,740 Cash Flows From Financing Activities Debt issued 0 526,332 0 0 0 0 Debt repayment -40,000 -45,000 -60,000 -60,000 -60,000 -195,000 Common stock repurchased -246,504 -303,651 0 0 0 0 Excess tax benefit from stock based compe 8,587 6,813 2,477 0 0 0 Dividend paid -85,118 -93,650 -97,746 -99,233 -99,416 -99,563 Other financing activities -4,623 -29,522 24,430 -26,120 -13,868 58,961 Net cash provided by (used for) financing -367,658 61,322 -130,839 -185,353 -173,284 -235,602 Effect of exchange rate changes -32,675 -37,025 -4,568 33,970 -19,843 -19,814 Net change in cash 86,546 -83,906 718 336,283 -83,762 17,328 Cash at beginning of period 363,804 450,350 366,444 367,162 703,445 529,942 Cash at end of period 450,350 366,444 367,162 703,445 619,683 547,270 Free Cash Flow Operating cash flow 570,962 417,092 227,594 311,066 190,831 308,484 Capital expenditure -132,619 -181,861 -89,699 -61,602 -83,993 -78,641 Free cash flow 438,343 235,231 137,895 249,464 106,838 229,843 ____________________________________________________________________________________________________________________________________________
Average to Current P/E Ratios |
(FLS) Flowserve Corp.
2015 2016 2017 2018 2019
Annual Earnings: 3.76 1.93 1.01 0.02 0.91
Average Price During Year: 32.87 33.15 37.11 41.19 47.30
P/E Ratio: 8.74 17.17 36.74 %2059.46 51.98
Average 5-Year P/E Ratio = 434.82
Current Price = 49.14
Previous 5 Quarter Earnings: 0.21 0.48 0.44 0.44 0.52
Current Annualized (Last Four Quarters) Earnings = 1.40
________
Average PE / Current PE = 12.39
--------
...a number above 1.00 is good
1.00 or below is bad
Financial Ratios |
. . . . . . . . . . . . Lowest to Highest, Compared to Industry
Intrinsic Value (DCF) |
Intrinsic Value by Discounted Cash Flow Method:
Fair Value Estimator |
Fair Value Estimate:
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Ownership:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Standard & Poor's |
Management's Discussion of Results of Operations Excerpts |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility. Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.
Results for FLOWSERVE CORPORATION:
Symbol? FLS
Total Months Available: 25
Months in Cycle? 4
Months Covered by Periods: 12
Period 1 Period 2 Period 3
H1 L1 H2 L2 H3 L3
51.03 46.03 51.18 43.69 48.58 43.42
RANGE = 51.18 TO 43.42 Close = 48.38
CHANNEL = 48.58 TO 46.03 Degree = 3
Volatility = 5.27% Index = 1
MACD Histogram Divergence |
The theory is that connecting the two most recent peaks or valleys of the MACD histogram will signal the direction of the next major move.
Intraday Chart |
2 Days:
Val Idea |
3 out of 8 favorable, (negative opinion.)
Stock Consultant |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
2 out of 3 of the ultimate systems favor a downmove.
System Below:
Short term outlook: Positive: Bright Green, Negative: Bright Red
Long term outlook: Postive: Dark Green, Negative: Dark Red.
Recommendation |
| Factors | Weighted Points |
|---|---|
| News | + 1 |
| Comparison | + 1 |
| Industry | + 1 |
| Bond Issue | + 1 |
| Zenith Index | - 1 |
| Non-GAAP vs. GAAP Earnings | + 1 |
| Cash Flow | + 1 |
| Average to Current P/E | + 1 |
| Ratios | + 1 |
| Intrinsic Value DCF | + 1 |
| Fair Value Estimator | + 1 |
| Projected Earnings | + 1 |
| Research Reports | - 1 |
| Analysts | - 1 |
| Executive Perquisites | - 1 |
| Insider Activity | - 1 |
| Institutional Activity | + 1 |
| Management Reporting | + 1 |
| Short Interest | - 1 |
| Sentiment | + 1 |
| Standard & Poor's | - 1 |
| MACD Histogram Divergence | - 1 |
| Val Idea | - 1 |
| Stock Consultant | - 1 |
| Point & Figure | + 1 |
| Wall Street Analyzer | - 1 |
| Marketspace Chart | + 1 |
| Time Series Chart | + 1 |
| Neural Network | - 1 |
| Stock Options | + 1 |
| Ultimate Trading Systems | - 1 |
| Total | + 3 |
Place 610 shares of Flowserve Corporation (FLS) on the Active List.
