Do Aramark (NYSE: ARMK) Fit In A Value Investing Philosophy?


    Nomura Securities Co., Ltd. (Priv.. recently announced the acquisition of new stake in Aramark (NYSE:ARMK). The institutional investor has increased its shareholding in the Consumer Cyclical company by 23.62% to 19.93 million shares with purchase of 3.81 million shares. This fresh investment now brings its stake to 7.89% valued currently at $420.96 million. In addition, RBC Capital Markets LLC (Investme.. raised its holdings by 0.67 million to 19.8 million shares. And Barrow, Hanley, Mewhinney & Strau.. has lifted its position by 69.16% or 7.26 million shares – to 17.75 million shares.

    With over 3.23 million Aramark (ARMK) shares trading Friday and a closing price of $28.81 on the day, the dollar volume was approximately $93.09 million. The shares have shown a positive weekly performance of 19.84% and its price on 08/28/20 gained nearly 9.96%. Currently, there are 252.94M common shares owned by the public and among those 249.90M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 14 analysts who have offered their price forecasts for ARMK have a consensus price objective of $28.36. The analysts have set the share’s price value over the next 12 months at a high of $42.00 and a low of $23.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Aramark stock is 2.30 for the next 12 months. The average price target is -0.66% below its last price level and a downside to the estimated low will see the stock lose -25.26% over that period. But an upside of 31.4% will see the stock hit the forecast high price target while mean target price for the stock is $27.00.

    Insiders at the company have transacted a total of 132 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 102 of these insider trades were purchases, accounting for 22,316,696 shares. Insider sales of the common stock occurred on 30 occasions, with total insider shares sold totaling 1,192,609 shares.

    The top 3 mutual fund holders in Aramark are Eaton Vance Atlanta Capital SMID, American Funds Insurance Series -, and Vanguard Total Stock Market Index. Eaton Vance Atlanta Capital SMID owns 14.96 million shares of the company’s stock, all valued at over $315.91 million. American Funds Insurance Series – sold -0.96 million shares to see its total holdings shrink to 8.0 million shares valued at over $168.96 million and representing 3.17% of the shares outstanding. Vanguard Total Stock Market Index sold 38820.0 shares to bring its total holdings to over 6.46 million shares at a value of $136.45 million. Vanguard Total Stock Market Index now owns shares totaling to 2.56% of the shares outstanding.

    Shares of Aramark (NYSE: ARMK) opened at $26.49, up $0.29 from a prior closing price of $26.20. However, the script later closed the day at $28.81, up 9.96%. The company’s stock has a 5-day price change of 19.84% and 9.84% over the past three months. ARMK shares are trading -33.62% year to date (YTD), with the 12-month market performance down to -29.13% lower. It has a 12-month low price of $9.65 and touched a high of $47.22 over the same period. Currently, 3.23 million shares have been traded, compared to an average intraday trading volume of 2.63 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 20.96%, 24.91%, and -7.25% respectively.

    Institutional ownership of Aramark (NYSE: ARMK) shares accounts for 88.86% of the company’s 252.94M shares outstanding. Mutual fund holders own 48.17%, while other institutional holders and individual stakeholders account for 53.73% and 16.27% respectively.

    It has a market capitalization of $6.63B and a beta (3y monthly) value of 1.73. The earnings-per-share (ttm) stands at -$1.16. Price movements for the stock have been influenced by the stock’s volatility, which stands at 7.04% over the week and 5.25% over the month.

    Analysts forecast that Aramark (ARMK) will achieve an EPS of -$0.25 for the current quarter, -$0.02 for the next quarter and $0.81 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.43 while analysts give the company a high EPS estimate of -$0.05. Comparatively, EPS for the current quarter was $0.69 a year ago. EPS should shrink at an annualized rate of -7.70% over the next five years, compared to 22.60% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 14 brokerage firm advisors rate Aramark (ARMK) as a “Moderate Buy” at a consensus score of 2.30. Specifically, 6 Wall Street analysts polled rate the stock as a buy, while 8 of the 14 advise that investors “hold,” and 0 rated it as a “Sell.”

    Looking at the support for the ARMK, a number of firms have released research notes about the stock. RBC Capital Mkts stated their Sector Perform rating for the stock in a research note on July 16, 2020, with the firm’s price target at $35-$26. Bernstein coverage for the Aramark (ARMK) stock in a research note released on June 10, 2020 offered a Mkt Perform rating with a price target of $34. Citigroup was of a view on March 23, 2020 that the stock is Buy, while Citigroup gave the stock Sell rating on February 07, 2020, issuing a price target of $39. Berenberg on their part issued Hold rating on January 17, 2020.


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