Waton Financial Ltd (NASDAQ: WTF)

Sector: Financial Services Industry: Asset Management CIK: 0001987363
Market Cap 185.61 Mn
P/B 6.70
P/E -9.67
P/S 19.07
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 1.79 Mn
Debt/Equity (Qtr) 0.06
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About

Investment thesis

Bull case

  • Healthy cash reserves of 29.88M provide 16.68x coverage of short-term debt 1.79M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 67.18M provides 37.49x coverage of total debt 1.79M, indicating robust asset backing and low credit risk.
  • Tangible assets of 67.18M provide robust 20.10x coverage of other current liabilities 3.34M, indicating strong asset backing.
  • Strong cash position of 29.88M provides 8.94x coverage of other current liabilities 3.34M, indicating excellent liquidity.
  • Cash position of 29.88M represents healthy 1.27x of working capital 23.62M, demonstrating strong operational liquidity.

Bear case

  • Investment activities of 0 provide weak support for R&D spending of 815097, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Long-term investments of 2.88M represent a high 5.44x of fixed assets 529414, indicating potential overexposure to financial assets versus operational capabilities.
  • Retained earnings of (17.47M) provide limited buffer against comprehensive income items of 67073, which is -260.52x, indicating elevated exposure to market risks.
  • R&D investment of 815097 represents just 0.15x of SG&A expenses of 5.61M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Operating cash flow of 0 provides minimal 0x coverage of tax expenses of 230566, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Asset Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BLK BlackRock, Inc. 199.59 Bn 85.40 21.98 15.04 Bn
2 BN BROOKFIELD Corp /ON/ 103.94 Bn 31.52 5.64 262.97 Bn
3 AMP Ameriprise Financial Inc 88.69 Bn 55.02 7.20 5.89 Bn
4 BX Blackstone Inc. 88.51 Bn 49.39 10.93 12.89 Bn
5 KKR KKR & Co. Inc. 55.86 Bn 28.33 13.23 53.12 Bn
6 STT State Street Corp 46.52 Bn 21.77 3.91 34.72 Bn
7 NTRS Northern Trust Corp 34.14 Bn 33.31 6.71 15.64 Bn
8 RJF Raymond James Financial Inc 32.89 Bn 37.63 4.14 5.10 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.50 0.94
EV to Cash from Ops. EV/CFO 478.40 41.10
EV to Debt EV to Debt 96.11 15.28
EV to EBIT EV/EBIT -9.26 23.47
EV to EBITDA EV/EBITDA -15.85 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF 497.39 38.62
EV to Market Cap EV to Market Cap 0.93 7.81
EV to Revenue EV/Rev 17.69 27.38
Price to Book Value [P/B] P/B 6.70 2.34
Price to Earnings [P/E] P/E -9.67 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 4.66
Dividend Payout Ratio % Dividend Payout Ratio % 0.00 -5.56
Dividend per Basic Share Div per Share (Qtr) 0.00 1.73
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 49.83
Interest Coverage Interest Coverage -52.61 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 378.31 15.43
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.65
EBIAT Growth (1y) % EBIAT Growth (1y) % -1,146.04 -90.82
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 35.24
EBIT Growth (1y) % EBIT Growth (1y) % -945.22 -22.13
EBT Growth (1y) % EBT Growth (1y) % -996.17 -163.05
EPS Growth (1y) % EPS Growth (1y) % -2,250.00 -20.61
FCF Growth (1y) % FCF Growth (1y) % 0.00 220.21
Gross Profit Growth (1y) % Gross Profit Growth (1y) % -29.51 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Utilization Ratio 0.14 0.22
Cash Payout Ratio Cash Payout Ratio 0.00 0.36
Cash Ratio Cash Ratio (Qtr) 0.72 0.38
Current Ratio Curr Ratio (Qtr) 1.57 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.70
Interest Cover Ratio Interest Cover Ratio -52.61 25.16
Times Interest Earned Times Interest Earned -52.61 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -114.76
EBIT Margin % EBIT Margin % -191.12 -127.24
EBT Margin % EBT Margin % -194.75 -150.97
Gross Margin % Gross Margin % 62.70 67.88
Net Profit Margin % Net Profit Margin % -197.10 -148.68