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  "documentTitle": "A.O. Smith Corporation (AOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-16 00:00:00",
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  "notes": "The slide highlights that AOS's valuation multiples are high despite significant exposure to emerging markets, which the author argues should command a discount.",
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      "text": "Spruce Point believes that analysts overvalue AOS because they believe its margins are superior, sustainable, and that the recent growth setback is \"temporary\" and not of long-term concern.",
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      "text": "P/E: 17.9x",
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      "text": "Spruce Point believes that analysts overvalue AOS because they believe its margins are superior, sustainable, and that the recent growth setback is “temporary” and not of long-term concern. We believe this narrative is not correct, and that its challenges are permanent. Furthermore, we believe the market assigns an inaccurate multiple to the business by comparing it with faster growing U.S. industrial companies that have better governance. In reality, nearly 35% of sales and 10% of segment earnings come from China/India, which has a fundamentally different earnings and growth profile and should receive a lower multiple.",
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      "text": "Source: Company financials and Bloomberg",
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      "text": "Peer valuation table comparing AOS to Asian and US peers across multiples like P/E, EV/EBITDA, and EV/Sales.",
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      "kind": "title",
      "text": "AOS Incorrectly Valued Relative To Higher Quality U.S. Companies",
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