Illinois Tool Works Inc. (ITW): Never Say ‘I’ve Missed This Opportunity’ Again

It has been reported that multiple insider activity took place at Illinois Tool Works Inc. (ITW). Vice Chairman O’HERLIHY CHRISTOPHER A sold 43,554 shares for $30,046 in transaction occurred on 2019/03/13. After making this transaction, Vice Chairman owns a direct stake of 7 shares, worth $4,699,194, as per the last closing price. On 2019/02/19 VALLS JUAN, Executive Vice President at ITW, dumped 52,265 shares at an average price of $142.41 per share. The selling total is valued at $4,121,922.

Executive Vice President, Hartnett John R. had divested 14,500 shares for $14,948 through a trade on 2019/02/05. Following this activity, the insider holds 14 shares worth $2,337,867 as of recent close.

Vanguard Total Stock Market Index Fund revealed as top hedge fund owner in Illinois Tool Works Inc. (ITW) with a stake of over 7.68M ITW shares as of September 29, with a market value of approx. $1.08B as of today. The second largest holder, Vanguard 500 Index Fund, with 5.74M shares which equates to $810.68M worth of the stock. At third is Investment Company Of America, which stood pat with 3.8M shares, a 0.94% position in Illinois Tool Works Inc., worth $481.42M. The insider holding in stood at 0.2% while institutions hold 79.8%.

Illinois Tool Works Inc. (NYSE:ITW) rose 1.34% in recent trade and currently has a stock-market value of $50.98B. The shares finished at $156.4, after trading as low as $154.68 earlier in the session. It hit an intraday high Friday at $156.53. Trading activity significantly weakened as the volume at ready counter decreased to 807,197 shares versus 1,112,200 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,417,092 shares. The stock is now 32.82% above against its bear-market low of $117.75 on December 26, 2018. It has retreated -2.44% since it’s 52-week high of $160.21 reached in April. Now the market price is up 0.42% on the year and up 23.45% YTD.

ITW stock’s 50 day simple moving average (SMA 50) price is $144.11 and its 200-day simple moving average (SMA 200) price is $137.76. The company’s stock currently has a total float of 321.38M shares. Its weekly volatility is hovering around 1.51% and felt 1.53% volatility in price over a month. On the upside, the share price will test short term resistance at around $157.06. On a downside, the stock is likely to find some support, which begins at $155.21. The failure to get near-term support could push it to $154.02.

It had seen a change in price target from analysts at BofA/Merrill, who reiterated the stock at Underperform on February 05 but moved PT from $128 to $124. Analysts at BofA/Merrill, shed their positive views on February 05 by lowering it fromNeutral to Underperform. The stock lost favor of Citigroup analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on January 14. JP Morgan analysts came out with bearish views on January 10 when the call was made. They think the stock is now Underweight compared to to their prior call for Neutral.

When looking at valuations, Illinois Tool Works Inc. (ITW) has a pricey P/E of 20.57x as compared to industry average of 19.39x. Moreover, it trades for 18.37 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 15.86x price/book and 3.45x price/sales. Compared to others, Illinois Tool Works Inc. is in a different league with regards to profitability, having net margins of 17.4%. To put some perspective around this, the industry’s average net margin is 5.12%. ITW’s ROE is 69.6%, which is also considerably better than the industry’s ROE of 9.23%. It’s also very liquid in the near term, with a current ratio of 1.6. The stock has a debt/capital of 2.27.

Shares of ITW have gained 13.9% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Illinois Tool Works Inc. (NYSE:ITW) has topped consensus earnings estimates in 11 quarters (91%), missed earnings in 1 quarters (8%), whereas at 0 occasion EPS met analyst expectations. ITW last reported earnings that exceeded expectations. The company raked in $1.83 per share, 147.3% change on the same period last year. That was better than consensus for $1.82. Revenue for the recent quarter stood at $3.58 billion, down -1% on last year and below the $3.61 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $3.73 billion to $3.85 billion, which should be compared with $3.92 billion generated last year. EPS is seen in a range of $1.96 to $2.1, against the $2.14 reported a year ago.