Insteel Industries Inc

IIIN

Steel Works, Blast Furnaces & Rolling & Finishing Mills

Mkt Cap

$617.9M

PE

25.47

Debt

Cash

$83.95M

EV

FCF

$56.31M

Market Cap

$617.9M

P/E Ratio

25.47

Debt

Cash

$83.95M

EV

FCF

$56.31M

Charts data: {"Earnings":[{"time":"2014-09-26","value":16641000},{"time":"2015-10-02","value":21710000},{"time":"2016-09-30","value":37245000},{"time":"2017-09-29","value":22548000},{"time":"2018-09-28","value":36266000},{"time":"2019-09-27","value":5598000},{"time":"2020-10-02","value":19009000},{"time":"2021-10-01","value":66610000},{"time":"2022-09-30","value":125011000},{"time":"2023-09-29","value":32415000}],"Sales":[{"time":"2014-09-26","value":408978000},{"time":"2015-10-02","value":447504000},{"time":"2016-09-30","value":418547000},{"time":"2017-09-29","value":388871000},{"time":"2018-09-28","value":453217000},{"time":"2019-09-27","value":455713000},{"time":"2020-10-02","value":472618000},{"time":"2021-10-01","value":590601000},{"time":"2022-09-30","value":826832000},{"time":"2023-09-29","value":649188000}],"Net Margins":[{"time":"2014-09-26","value":0.040689230227542804},{"time":"2015-10-02","value":0.04851353283992992},{"time":"2016-09-30","value":0.08898642207446236},{"time":"2017-09-29","value":0.057983238657549674},{"time":"2018-09-28","value":0.08001906371561526},{"time":"2019-09-27","value":0.012284047196371401},{"time":"2020-10-02","value":0.040220643310242096},{"time":"2021-10-01","value":0.1127834189241129},{"time":"2022-09-30","value":0.15119274532190335},{"time":"2023-09-29","value":0.04993160686888852}],"Assets":[{"time":"2014-09-26","value":256795000},{"time":"2015-10-02","value":260239000},{"time":"2016-09-30","value":292892000},{"time":"2017-09-29","value":283073000},{"time":"2018-09-28","value":329534000},{"time":"2019-09-27","value":293009000},{"time":"2020-10-02","value":337902000},{"time":"2021-10-01","value":390710000},{"time":"2022-09-30","value":471745000},{"time":"2023-09-29","value":447513000}],"Stockholders Equity":[{"time":"2014-09-26","value":178883000},{"time":"2015-10-02","value":200215000},{"time":"2016-09-30","value":224566000},{"time":"2017-09-29","value":223376000},{"time":"2018-09-28","value":241665000},{"time":"2019-09-27","value":246017000},{"time":"2020-10-02","value":264803000},{"time":"2021-10-01","value":302038000},{"time":"2022-09-30","value":389744000},{"time":"2023-09-29","value":381505000}],"ROE":[{"time":"2014-09-26","value":0.0930272859914022},{"time":"2015-10-02","value":0.10843343405838723},{"time":"2016-09-30","value":0.1658532458163747},{"time":"2017-09-29","value":0.10094190960532913},{"time":"2018-09-28","value":0.1500672418430472},{"time":"2019-09-27","value":0.02275452509379433},{"time":"2020-10-02","value":0.07178544049727534},{"time":"2021-10-01","value":0.22053516444950635},{"time":"2022-09-30","value":0.32075157026150497},{"time":"2023-09-29","value":0.08496612102069435}],"ROA":[{"time":"2014-09-26","value":0.09914523257851594},{"time":"2015-10-02","value":0.12789781700667463},{"time":"2016-09-30","value":0.19272632915887083},{"time":"2017-09-29","value":0.12070384671091909},{"time":"2018-09-28","value":0.12936449653146564},{"time":"2019-09-27","value":0.0254429044841626},{"time":"2020-10-02","value":0.07152961509550106},{"time":"2021-10-01","value":0.22037572624196974},{"time":"2022-09-30","value":0.34282716297999977},{"time":"2023-09-29","value":0.09330455204653272}]}

Insteel Industries, Inc., together with its subsidiaries, manufactures and markets steel wire reinforcing products for concrete construction applications. The company offers prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. Its PC strand is a seven-wire strand that is used to impart compression forces into precast concrete elements and structures providing reinforcement for bridges, parking decks, buildings, and other concrete structures. The company's WWR engineered reinforcing product is used in nonresidential and residential construction. It produces a range of WWR products, such as engineered structural mesh, an engineered made-to-order product that is used as the primary reinforcement for concrete elements or structures serving as a reinforcing solution for hot-rolled rebar; concrete pipe reinforcement, an engineered made-to-order product, which is used as the primary reinforcement in concrete pipe, box culverts, and precast manholes for drainage and sewage systems, water treatment facilities, and other related applications; and standard welded wire reinforcement, a secondary reinforcing product for crack control applications in residential and light nonresidential construction, including driveways, sidewalks, and various slab-on-grade applications. The company sells its products through sales representatives to the manufacturers of concrete products, rebar fabricators, distributors, and contractors primarily in the United States, Canada, Mexico, and Central and South America. Insteel Industries, Inc. was founded in 1953 and is headquartered in Mount Airy, North Carolina.

Sector

HAYN

10-K
9/30/23
10-Q
7/1/23
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12/31/22
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6/29/19
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3/30/19
10-Q
12/29/18
10-K
9/29/18
10-Q
6/30/18
10-Q
3/31/18
10-Q
12/30/17

DCF

Discounted Cash Flow Valuation of Insteel Industries Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$56.31M	$59.14M	$62.11M	$65.23M	$68.5M	$71.94M	$75.54M	$79.32M	$83.29M	$87.46M	$91.83M	$918.3M
DCF		$51.43M	$46.97M	$42.89M	$39.17M	$35.76M	$32.66M	$29.82M	$27.23M	$24.86M	$22.7M	$227M
Value	$580.5M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 11%

Earnings Stability 9.7%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	10-2015	09-2016	09-2017	09-2018	09-2019	10-2020	10-2021	09-2022	09-2023	TTM
Net Margin	4.9%	8.9%	5.8%	8%	1.2%	4%	11%	15%	5%	4.2%
ROA	13%	19%	12%	13%	2.5%	7.2%	22%	34%	9.3%	7.9%
ROE	11%	17%	10%	15%	2.3%	7.2%	22%	32%	8.5%	7.1%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.44%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.97%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +14.71%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +2.63%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +14.51%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +2.05%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Data are missing

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	10-2015	09-2016	09-2017	09-2018	09-2019	10-2020	10-2021	09-2022	09-2023	TTM
Debt FCF	-	-	-	-	-	-	-	-	-	-
Debt Equity	-	-	-	-	-	-	-	-	-	-
MIN
Graham Stability	-	-	89%	100%	17%	89%	100%	100%	46%	17%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is -.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.17.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	09-2016	09-2018	10-2020	09-2022	Trend
Revenue	6.5%	7.5%	11%	-21%	1.1%
Net Income	-2%	-2.2%	19%	-74%	6.5%
Stockholders Equity	7.9%	9.6%	13%	-2.1%	0.39%
FCF	15%	26%	31%	-	-6.4%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +7.45%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.12%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -2.22%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +6.48%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +9.56%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.39%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +25.71%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -6.38%.