Textron, Inc. (NYSE:TXT)

CAPS Rating: 3 out of 5

A global multi-industry company with operations in four business segments: Bell, Cessna, Industrial and Finance.


Player Avatar TheStankometer (< 20) Submitted: 1/14/2011 2:47:44 AM : Underperform Start Price: $24.35 TXT Score: -14.33

'Twas at a price of 24.19 on 1-7-11 when I first caught wind of Textron's foul odor through the Smelloscope.

It smelled just like it scored: 30 points out of 100. One of the worst ranking stocks the Smelloscope has ever smelt.

Here's why:

Negative, unstable ROE%, ROA%, and Net Profit margins. Decreasing gross margin. A mediocre P/E and an inconsistent book value per share. An unstable debt to equity ratio and a weak dividend. Negative insider trading. Over 8% short interest (as a percentage of float).

The bottom line:

While Textron does have an intriguing P/FCF and P/Sales... I wonder if that could be partially because their long term debt is 2/3 the size of their total current assets.

Again, I don't know a lot about this industry or the company... but I wonder if Textron's customers are really going to be purchasing enough Cessna's over the next few years (in a struggling world economy) to make up for their moldy fundamentals.

I wouldn't put real money on shorting this stock. But I'll sure give it a downthumb with the Stankometer!

(official nose of the Stankometer)

Full Discloser:
TheSmelloscope is a value rating system created to evaluate stocks for fun. It is operated by a novice investor named djshagggyd. NOVICE being the key word. Do not follow the Stankometer's advice without conducting your own due diligence.

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