Arthur J Gallagher Stock Beneish M Score
| AJG Stock | USD 239.84 1.12 0.47% |
Arthur | Beneish M Score |
At this time, it appears that Arthur J Gallagher is an unlikely manipulator. The earnings manipulation may begin if Arthur J's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Arthur J executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Arthur J's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.94
Beneish M Score - Unlikely Manipulator
Arthur J Beneish M-Score Indicator Trends
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Arthur J's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Net Receivables | 2.2 B | 3.8 B |
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| Total Revenue | 1.6 M | 1.7 M |
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| Total Assets | 54.2 B | 51.6 B |
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| Total Current Assets | 33.7 B | 32.1 B |
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| Non Current Assets Total | 20.5 B | 19.5 B |
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| Property Plant Equipment | 1.1 B | 1.1 B |
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| Depreciation And Amortization | 693.8 M | 660.8 M |
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| Selling General Administrative | 128.5 M | 135.3 M |
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| Total Current Liabilities | 32.6 B | 31.1 B |
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| Non Current Liabilities Total | 10.2 B | 9.7 B |
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| Short Term Debt | 1 B | 959 M |
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| Long Term Debt | 7.4 B | 7 B |
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| Total Cash From Operating Activities | 2.1 B | 2 B |
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| Short Term Investments | 3.7 M | 3.9 M |
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| Long Term Investments | 42 M | 40.9 M |
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| Gross Profit Margin | 0.65 | 0.4215 |
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Arthur J Gallagher Beneish M-Score Driver Matrix
One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Arthur J's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Arthur J in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Arthur J's degree of accounting gimmicks and manipulations.
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About Arthur J Beneish M Score
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Other Operating Expenses |
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Arthur J Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Arthur J. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (projected) | ||
| Net Receivables | 5.4B | 6.4B | 11.8B | 16.4B | 3.8B | 2.2B | |
| Total Revenue | 7.2B | 7.0B | 8.2B | 8.6B | 1.7M | 1.6M | |
| Total Assets | 19.6B | 22.3B | 33.3B | 38.9B | 51.6B | 54.2B | |
| Total Current Assets | 9.1B | 11.1B | 17.7B | 22.8B | 32.1B | 33.7B | |
| Net Debt | 4.3B | 4.2B | 6.2B | 6.1B | 7.3B | 7.7B | |
| Short Term Debt | 790.6M | 278.6M | 473.4M | 551.9M | 959M | 1.0B | |
| Long Term Debt | 3.8B | 4.3B | 5.8B | 5.6B | 7.0B | 7.4B | |
| Operating Income | 836.5M | 1.0B | 1.5B | 1.7B | (2.0B) | (1.9B) | |
| Investments | (52M) | (1.4M) | (67.9M) | (68.2M) | (1.8B) | (1.7B) |
Arthur J ESG Sustainability
Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Arthur J's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Arthur J's managers, analysts, and investors.Environment Score | Governance Score | Social Score |
About Arthur J Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Arthur J Gallagher's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Arthur J using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Arthur J Gallagher based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Pair Trading with Arthur J
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Arthur J position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Arthur J will appreciate offsetting losses from the drop in the long position's value.Moving together with Arthur Stock
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The ability to find closely correlated positions to Arthur J could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Arthur J when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Arthur J - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Arthur J Gallagher to buy it.
The correlation of Arthur J is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Arthur J moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Arthur J Gallagher moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Arthur J can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Arthur J Piotroski F Score and Arthur J Altman Z Score analysis. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
Complementary Tools for Arthur Stock analysis
When running Arthur J's price analysis, check to measure Arthur J's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Arthur J is operating at the current time. Most of Arthur J's value examination focuses on studying past and present price action to predict the probability of Arthur J's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Arthur J's price. Additionally, you may evaluate how the addition of Arthur J to your portfolios can decrease your overall portfolio volatility.
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Is Arthur J's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Arthur J. If investors know Arthur will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Arthur J listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.223 | Dividend Share 2.25 | Earnings Share 4.92 | Revenue Per Share 46.638 | Quarterly Revenue Growth 0.199 |
The market value of Arthur J Gallagher is measured differently than its book value, which is the value of Arthur that is recorded on the company's balance sheet. Investors also form their own opinion of Arthur J's value that differs from its market value or its book value, called intrinsic value, which is Arthur J's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Arthur J's market value can be influenced by many factors that don't directly affect Arthur J's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Arthur J's value and its price as these two are different measures arrived at by different means. Investors typically determine if Arthur J is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Arthur J's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.