ABB Ltd (ADR) (ABB)

Alex1963 (97.63) Submitted: 5/27/2009 12:59:42 PM : Start Price: $15.87 ABB Score: +9.55

ABB Ltd (ADR) (ABB) $16.24 0.06 (+0.39%) 5/27/2009 12:05 PM
The Company is a provider of power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact.
2 Week High 32.77
52 Week Low 9.11
Avg. Daily Vol. (Mil) 4.72
Beta (3 year) 1.61
Share Related Items
Mkt Cap (Mil) 37,582.79
Shares Out (Mil) 2,322.79
Float (Mil) 0.00
Dividend Information
Yield % 2.80
Annual Dividend 0.46
Payout Ratio 34.00
Financial Strength
Quick Ratio 1.10
Current Ratio 1.50
LT Debt/ Equity 0.18
Total Debt / Equity 0.21
Valuation Ratios
Price Earnings 11.90
Price/Sales 1.08
Price/Book 3.37
Price/Cash Flow 9.90
Per Share Data
Earnings 1.36
Sales 15.03
Book Value 4.80
Cash Flow 1.63
Intraday3 Months 1 Year
Short Interest
Current Month (Mil) 3.38
Previous Month (Mil) 3.19
Short Interest Ratio (Days) 0.90
Management Effectiveness
Return on Equity 27.90
Return on Assets 9.40
Return on Investments 23.70
Profitability
Gross Margin 33.20
EBIT Margin 13.90
Profit Margin 8.90

FINANCIAL RATIOS

Company Industry
Valuation Ratios
P/E Ratio (TTM) 11.90 18.70
P/E High - Last 5 Yrs 336.50 46.30
P/E Low - Last 5 Yrs 6.70 8.40
Beta 1.54 1.42
Price to Sales (TTM) 1.08 0.81
Price to Book (MRQ) 3.37 2.30
Price to Tangible Book (MRQ) 4.74 7.59
Price to Cash Flow (TTM) 9.90 10.70
Price to Free Cash Flow (TTM) 33.00 126.40
Dividends
Dividend Yield (%) 2.80 2.20
Dividend Yield - 5 Yr Avg (%) 0.80 1.20
Dividend 5 Yr Growth Rate (%) N.A. 9.29
Payout Ratio (TTM) 34.00 41.00
Sales (MRQ) vs Qtr 1 Yr Ago (%) 4.90 -11.20
Sales (TTM) vs TTM 1 Yr Ago (%) 19.60 20.70
Growth Rates (%)
Sales - 5 Yr Growth Rate (%) 12.77 12.51
EPS (MRQ) vs Qtr 1 Yr Ago (%) -87.80 -83.80
EPS (TTM) vs TTM 1 Yr Ago (%) -87.80 -83.80
EPS - 5 Yr Growth Rate (%) 81.84 24.05
Capital Spending - 5 Yr Growth Rate (%) N.A. 27.70
Financial Strength
Quick Ratio (MRQ) 1.10 1.10
Current Ratio (MRQ) 1.50 1.70
LT Debt to Equity (MRQ) 0.18 0.49
Total Debt to Equity (MRQ) 0.21 0.60
Interest Coverage (TTM) 13.20 5.30
Profitability Ratios (%)
Gross Margin (TTM) 33.20 30.60
Gross Margin - 5 Yr Avg 30.70 31.00
EBITD Margin (TTM) 16.60 13.30
EBITD - 5 Yr Avg 10.70 0.00
Pre-Tax Margin (TTM) 12.90 7.10
Pre-Tax Margin - 5 Yr Avg 10.10 8.40
Management Effectiveness (%)
Net Profit Margin (TTM) 0.09 0.05
Net Profit Margin - 5 Yr Avg 6.80 5.80
Return on Assets (TTM) 9.40 4.80
Return on Assets - 5 Yr Avg 6.60 5.70
Return on Investment (TTM) 23.70 8.80
Return on Investment - 5 Yr Avg 17.70 11.20
Efficiency
Revenue/Employee (TTM) 291,906.00 207,006.00
Net Income/Employee (TTM) 26,070.00 9,584.00
Receivable Turnover (TTM) 3.90 4.80
Inventory Turnover (TTM) 4.60 4.90
Asset Turnover (TTM) 1.10 1.00
Morn 3*
Risk: ABB's primary risk is its sensitivity to economic swings and cycles, particularly in Europe, where the company generates about half its sales. In addition, ABB generates about 14% of sales from China and India, which are currently growing rapidly. Should those markets experience a downturn in demand, ABB's sales growth would probably decline. Additionally, the company's shift from a strategy of internal growth to a strategy of growth by acquisition boosts the risk to equity investors.
Strategy
ABB is striving to capitalize on the increased appetite for power and automation in the fast-growing economies of Asia while shedding less-profitable noncore businesses. ABB strives to be an innovation leader in power and automation technologies. The company spends about 2% of sales on research-and-development projects.
Management & Stewardship
Effective September 2008, Joseph Hogan took over as CEO of ABB. He came from leading General Electric's health-care segment and brings a wealth of experience in both operational execution and growing large enterprises. His arrival comes at the expense of former CEO Fred Kindle, who helped turn ABB around and significantly improve operating performance prior to the strong infrastructure growth. The board of directors favored a more aggressive plan for growth as opposed to the organic growth strategy favored by Kindle. Shifting to a growth-by-acquisition strategy can be risky to returns on invested capital, particularly if there are difficulties integrating the target.

The board of directors is chaired by Hubertus von Grunberg. We like the formal rules ABB has adopted for appointing individuals to its director and compensation committees. Directors must be independent. The rules require the committees to meet at least twice per year and limit members to one-year terms. Although the basis for rewarding executives is unclear, compensation is determined by reaching short and long-term goals and is paid out as cash or stock warrants.

Profile: ABB is a Switzerland-based provider of power and automation products and systems. Power products and systems represent approximately 30% and 18% of sales, respectively. Automation products and systems represent about 27% and 20% of sales, respectively. Robotics products represent approximately 4% of sales.
Growth: ABB benefited from strong growth of 25.4% in 2007. We assume an average growth rate of 10% during the next seven years.
Profitability: ABB has steadily improved margins from 5.4% in 2004 to 13.8% in 2007 due to operating improvements and higher order volumes. We expect margins to moderate to 11% by 2014.
Financial Health: ABB has a strong balance sheet and healthy cash flow generation. With relatively low levels of debt, the company is in a good position to be opportunistic in the market.
Google Finance
ABB Ltd (ABB) is a global provider of power and automation technologies to utility and industry customers. The Company’s focus on power transmission, distribution and power-plant automation serves electric, gas and water utilities, as well as industrial and commercial customers. ABB also delivers automation systems that measure, control, protect and optimize plant applications across a range of industries. Its business comprises five divisions: Power Products, Power Systems, Automation Products, Process Automation and Robotics. Its Power Products and Power Systems divisions operate in the power market. Its Automation Products, Process Automation and Robotics divisions operate in the automation market. On August 25, 2008, ABB completed the acquisition of Kuhlman Electric Corporation. During the year ended December 31, 2008, the Company sold its 50% stake in the shares of ABB Powertech Transformers, located in South Africa, to Powertech, a wholly owned subsidiary of the Altron Group
(I like this sector for the cpoming year even with the global slowdown. Energy will still be needed and those providing will have to go beyond cutting jobs to improve their bottom lines IMO. I like their Asia position esp China. I like the low debt, the higher beta. I'm not wild about the change in mgt since Kindle seemed to have done an excellent job. Moving to a more aggressive growth oriented CEO may turn out to hurt them if they mis calculate where that growth should come from)