Axalta Coating Systems: Focus On The Free Cash Flow Instead Of Earnings

Mar. 05, 2022 11:35 AM ETAxalta Coating Systems Ltd. (AXTA)2 Comments

Summary

  • Axalta's results are heavily impacted by inflation and 2022 will likely be a transition year as it will take time to pass on the costs to the end user.
  • Despite the headwinds, the free cash flow result in 2021 was very satisfying and 2022 will likely be alright.
  • Axalta continues to buy back stock, which further boosts the free cash flow per share.
  • I may try to go long by writing put options in the near future.
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Introduction

Back in October last year, I wasn’t too happy when Axalta Coating Systems (NYSE:AXTA) pulled its full year guidance for 2021 as the inflation had a severe negative impact on the operating margins. In September, Axalta announced it expected

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This article was written by

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We zoom in on capital gains and dividend income in European small-caps
As I'm a long-term investor, I'll highlight some stockpicks which will have a 5-7 year investment horizon. As I strongly believe a portfolio should consist of a mixture of dividend-paying stocks and growth stocks, my articles will reflect my thoughts on this mixture.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I may start writing put options within the next 72 hours, but that's not a certainty. I have no other exposure to Axalta at this moment.

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