A. O. Smith: Keep The Faith, But Don’t Add


  • I think A. O. Smith is a wonderful business. I think this is very much a growth business, as evidenced by the uptick in revenue and net income over the years.
  • The issue I have is that the shares are no longer objectively cheap. In this game, a 10% difference in valuation matters, so I don’t want to add it here.
  • I would normally sell put options, but the premia on offer for decent strikes is too thin in my estimation. That said, short puts have done well over time for me.

Currency and Exchange Stock Chart for Finance and Economy Display


It’s been just shy of six months since I wrote my bullish piece on A. O. Smith Corporation (NYSE:AOS), and in that time, the shares have returned about 5% against a loss of 1% for the S&P 500. I absolutely hate

A financial history of A. O. Smith from 2014 to the present

A. O. Smith Financials (A. O. Smith investor relations)

Data by YCharts

Data by YCharts

Disclosure: I/we have a beneficial long position in the shares of AOS either through stock ownership, options, or other derivatives. 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.

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