AAON

AAON Inc.

Industrial/Transportation


Presented:03/19/2020
Price:$32.78
Cap:$2.56B
Current Price:$110.99
Cap:$8.99B

Presented

Date03/19/2020
Price$32.78
Market Cap$2.56B
Ent Value$2.57B
P/E Ratio48.2x
Book Value$4.00
Div Yield0.65%
Shares O/S78.14M
Ave Daily Vol345,594
Short Int12.60%

Current

Price$110.99
Market Cap$8.99B
AAON, Inc. engages in the engineering, manufacturing, marketing and sale of air conditioning and heating equipment. It operates through the following segments: Units, Parts-External, Parts-Internal, and Other. Its products include air handling units, self contained units, packaged rooftop units, geothermal heat units, controls, and coils. The company was founded by Norman H. Asbjornson on August 18, 1987 and is headquartered in Tulsa, OK.

Please note, this stock split on 08/17/2023 at a ratio of 3/2. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $49.17.
Publicly traded companies mentioned herein: AAON Inc (AAON)

Highlights

The presenter is short shares of AAON Inc (AAON), a $2B heating, ventilation, and air conditioning company. Looking at both technical and fundamental indicators, the presenter believes these do not justify AAON’s current price given its flat EBIT since 2015 and the current macro uncertainties stemming from COVID-19. As a result, at 45x earnings, he views this as a highly generous valuation.

AAON is a steady business with no net debt, $470MM revenue and 26MM cash on the balance sheet. It designs, manufactures and sells semi-custom heating, ventilation and air conditioning equipment (HVAC) for commercial and residential use. 

Following a recent $20MM buyback, the stock had traded to a record high valuation of ~50x earnings. However, the presenter points out that while the backlog is growing, orders are actually down, and he believes that their commercial markets have peaked.

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Idea Discussion

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