Albany International

Albany International Corp is assigned a 5-star quantitative star rating, indicating our belief that this share class offers a compelling opportunity for investors. The stock currently trades at a 29% discount to our quantitative fair value estimate of $83.55 per share; however, caution is warranted due to this estimate's high uncertainty rating.

The company's balance sheet bolsters our valuation estimate. Leverage can enable a company to invest in growth, potentially boosting shareholder value more than equity financing alone. Reflecting the firm's leverage is its EBITDA/interest coverage ratio of 1.8, which lies in the bottom 20% globally. Although the firm's ability to cover interest payments with EBITDA is limited, shares could sharply rebound if economic circumstances change or recent investments reduce fears of default. We believe this is a sign that shares could be cheap.

Alternatively, the company's lack of growth is potentially concerning. Stagnant revenue and earnings growth indicates a company's challenges in increasing market share and profitability. The firm's EPS 5-year growth of -5.6%, for example, ranks in the bottom 20% globally. On a relative basis, EPS growth has lagged over the last five years, which, despite our favorable price/fair value ratio, is a negative attribute.

The company's quantitative economic moat rating of none suggests any excess returns could erode quickly as competition arrives. Additionally, the firm's moderate financial health score suggests it is acceptably positioned against adverse economic circumstances.