COMPANY DESCRIPTION

Snap-on is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. Products and services include hand and power tools, tool storage, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, including aviation and aerospace, agriculture, construction, mining, natural resources, and technical education. Co. also provides financing programs designed to facilitate the sales of its products. Co.'s reportable business segments are: the Commercial & Industrial Group; the Snap-on Tools Group; the Repair Systems & Information Group; and Financial Services. 

 

ECONOMIC MOAT

SNA’s moat is dug from its strong brand and innovation.  SNA has an excellent reputation.  This reputation with vehicle repair technicians is a valuable part of the brand equity.

 

OUTLOOK

Snap-on has been performing well.  Results were evidenced by strong ongoing across-the-board demand for its product offerings. Snap-on to continue to reap the rewards of its ``Value Creation'' process, which helped boost operating margins throughout last year and should continue to do the same in 2015.  The stock has moved in tandem with the operating performance and fundamentals.  The stock looks to be at fair value but price momentum (relative strength) could push the share price further in 2015.

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STRENGTHS

  • Broad portfolio catering to a large customer base

  • Multi-channel approach
    Strong revenue and profit growth 

WEAKNESSES

  • Overdependence on the US market 

THREATS

  • Intense competition
    Risks concerning environmental regulations Uncertainty regarding the economic recovery in Europe 

OPPORTUNITIES

  • Improving housing construction market in the US
    Rising immigrant population 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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