A. O. Smith Corporation (AOS)
Quantitative Summary
DeterministicAt 15.1x earnings — a 66% discount to the sector average of 44.7x — AOS is in the lower valuation range. Financial health metrics are strong: Piotroski 8/9, Altman Z 8.2 (above 3.0 safe zone threshold). DCF fair value of $69 suggests 3% upside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of A. O. Smith Corporation demonstrate a robust quality profile characterized by an ROIC-WACC spread indicative of superior capital efficiency, supported by a Piotroski F-Score of 8/9 and a Beneish M-Score of -2.52 that signals low earnings manipulation risk. The DuPont decomposition reveals that the 29.4% return on equity is primarily driven by exceptional net margins at 14.3%, reinforced by solid asset turnover rather than excessive leverage, while gross margins remain healthy at 38.8%. This high-quality earnings generation contrasts sharply with stagnant revenue growth of merely 0.3% year-over-year, suggesting the company extracts value from existing operations more effectively than it expands its top line.
Valuation metrics present a significant divergence between market pricing and intrinsic models; while the current P/E ratio of 17.1x trades at a substantial discount to the sector average of 45.2x, implying potential mean reversion or a lack of growth premium recognition, a DCF analysis suggests a fair value of $102 with an implied upside of 54%. This valuation gap appears anchored by market expectations for only 9.0% free cash flow growth over the next decade, which may be conservative given the firm's profitability factor (RMW) alpha of 0.464 and its strong tilt toward value characteristics as evidenced by a Value Factor score of 0.152.
Risk assessment highlights a conflicting signal between long-term performance metrics and recent insider activity; although the stock exhibits positive Fama-French annualized alpha of 0.10%, indicating historical outperformance relative to size, book-to-market, and profitability factors, there has been net insider selling totaling $110,565 over the last ninety days. This executive cash flow reduction warrants scrutiny alongside the otherwise favorable risk-adjusted return profile, presenting a scenario where strong fundamental underpinnings coexist with potential near-term uncertainty regarding management confidence or liquidity needs.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 0% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 11% | 13% | 15% |
|---|---|---|---|
| 2% | $80 | $64 | $53 |
| 3% | $88 | $69 | $56 |
| 4% | $99 | $75 | $60 |
Center = base case. Green = >10% upside, Red = >10% downside vs $56.76.
Pre-computed DCF: WACC=13.0%, terminal growth 3%. Fair value $69 (+2.8%). Not investment advice.
Valuation Context
Currently trading 27% below its 5-year average P/E of 23.4x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe current price of $56.01 for A. O. Smith Corporation sits within a technical landscape where institutional positioning is often inferred through the interplay of moving averages and volume profiles, though specific crossover data points are absent from this snapshot. In the absence of explicit trendline breaches or significant divergence between short-term and long-term moving averages, larger market participants may be maintaining a neutral stance or engaging in accumulation phases that do not yet manifest as aggressive directional momentum. Volume trends typically serve as a critical filter for such behavior; without elevated trading activity coinciding with price appreciation, it suggests that institutional interest might be limited to routine rebalancing rather than a concerted drive to alter the asset's trajectory significantly at this juncture. Sector dynamics within Industrials often amplify these signals, and while AOS currently trades near its stated level of $56.01, the lack of pronounced technical dislocations implies that major players are not forcing a breakout or capitulation event immediately visible in this narrow dataset. The stability suggested by the current price action could indicate that smart money is waiting for clearer confirmation before committing substantial capital to either side, effectively treating the asset as part of a broader defensive allocation until volatility expands. Consequently, the technical picture reflects a period of consolidation where institutional footprints are subtle, requiring observers to monitor subsequent volume spikes or moving average interactions to gauge whether larger entities are quietly building positions or gradually reducing exposure without triggering immediate market-wide reactions.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-04-30 | $0.3600 | 0.0% |
| 2026-01-30 | $0.3600 | 0.0% |
| 2025-10-31 | $0.3600 | +5.9% |
| 2025-07-31 | $0.3400 | 0.0% |
| 2025-04-30 | $0.3400 | 0.0% |
| 2025-01-31 | $0.3400 | 0.0% |
| 2024-10-31 | $0.3400 | +6.3% |
| 2024-07-31 | $0.3200 | 0.0% |
| 2024-04-29 | $0.3200 | 0.0% |
| 2024-01-30 | $0.3200 | 0.0% |
| 2023-10-30 | $0.3200 | +6.7% |
| 2023-07-28 | $0.3000 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like NOBL or VFQY, the fund manager is mechanically forced to buy or sell AOS shares regardless of A. O. Smith Corporation's individual fundamentals. We estimate $1.1B of passive capital is structurally linked to AOS through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in A. O. Smith Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If A. O. Smith Corporation (AOS) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Cintas Corp. (CTAS) as the most exposed collateral stock, sharing 3 ETFs with AOS. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 25 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
AOS Ownership Dynamics
Passive funds hold 1 in every 6 AOS shares, reducing daily market volatility.
A. O. Smith Corporation (AOS) exerts notable gravity on the passive index market, currently representing 1.5% of the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) and 0.3% of the VFQY (VFQY). Across 25 tracked ETFs, approximately 19M shares (16.7% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest AOS Exposure
Float lock-up computed from 25 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
AOS Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for A. O. Smith Corporation over the past year sits near $67.37 (12% of 252-day volume). The current price of $56.76 sits 15.7% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
AOS Capital Efficiency
How efficiently does A. O. Smith Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
A. O. Smith Corporation converts 67% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 12.3% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 545 | $56.98 | $31,054.1 |
| 2026-05-01 | 7,900 | $61.84 | $488,536 |
| 2026-04-30 | 7,805 | $63.68 | $497,022.4 |
| 2026-04-29 | 46,448 | $63.91 | $3.0M |
| 2026-04-24 | 54 | $65.09 | $3,514.86 |
| 2026-04-22 | 87 | $64.99 | $5,654.13 |
| 2026-04-16 | 1,009 | $63.37 | $63,940.33 |
| 2026-04-10 | 1,978 | $67.27 | $133,060.06 |
| 2026-04-06 | 3,907 | $64.35 | $251,415.45 |
| 2026-03-27 | 195 | $65.61 | $12,793.95 |
| 2026-03-25 | 6,328 | $65.45 | $414,167.6 |
| 2026-03-24 | 33 | $65.07 | $2,147.31 |
| 2026-03-23 | 8 | $64.09 | $512.72 |
| 2026-03-19 | 204 | $64.02 | $13,060.08 |
| 2026-03-12 | 412 | $68.11 | $28,061.32 |
| 2026-03-11 | 362 | $69.82 | $25,274.84 |
| 2026-03-09 | 1,765 | $71.01 | $125,332.65 |
| 2026-03-06 | 163 | $72.02 | $11,739.26 |
| 2026-03-05 | 163 | $73.35 | $11,956.05 |
| 2026-03-03 | 584 | $77.93 | $45,511.12 |
| 2026-03-02 | 18,641 | $78.00 | $1.5M |
| 2026-02-18 | 11,981 | $79.47 | $952,130.07 |
| 2026-02-17 | 769 | $80.46 | $61,873.74 |
| 2026-02-06 | 18 | $78.11 | $1,405.98 |
| 2026-01-26 | 11,713 | $72.46 | $848,723.98 |
| 2026-01-23 | 150 | $73.09 | $10,963.5 |
| 2026-01-22 | 536 | $72.24 | $38,720.64 |
| 2026-01-21 | 130 | $70.56 | $9,172.8 |
| 2026-01-20 | 15,616 | $72.48 | $1.1M |
| 2026-01-05 | 68,007 | $68.32 | $4.6M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| ITW | 0.723 | 0.727 | High co-movement |
| MAS | 0.678 | 0.675 | Moderate |
| LII | 0.650 | 0.658 | Moderate |
| ALLE | 0.642 | 0.598 | Moderate |
| PHM | 0.640 | 0.662 | Moderate |
| NDSN | 0.630 | 0.659 | Moderate |
| SWK | 0.628 | 0.691 | Moderate |
| PPG | 0.624 | 0.639 | Moderate |
| IR | 0.618 | 0.707 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare AOS to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.