Value
3.8/10data confidence 60%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 7.5 |
| EV/EBITDA | 0.0 |
TR · Why this verdict
Why Tootsie Roll Industries (TR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score3.8/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tootsie Roll Industries is a low-volatility consumer defensive confectioner with a Piotroski F-Score of 7 out of 9 and a strong technical setup at Bollinger Band support, but has a history of earnings misses and its most recent available quarterly data dates to 2014-2015, raising questions about the currency of the earnings track record used in analysis.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Volume is accumulating with rising on-balance volume despite the stock trading below its 200-day moving average, and the support and resistance technical score of 8.1 suggests the stock is near a historically meaningful support level that could provide a buying opportunity. Momentum breakdown | Price rises above the 200-day moving average within 9 months as volume accumulation translates into price recovery. | ↓Deteriorating |
| CounterBelow-200-MA setups with rising on-balance volume can be momentum divergences that resolve lower rather than higher, particularly in low-growth consumer defensive stocks with no catalyst visible on the horizon. | ||
A Piotroski F-Score of 7 out of 9 and strong Bollinger Band support score of 6.7 indicate that Tootsie Roll's financial fundamentals are sound across multiple dimensions and the stock is technically near a support zone that has historically attracted buyers. Quality breakdown | Piotroski F-Score remains at 7 or above through the next annual reporting cycle. | ↑Improving |
| CounterConsumer defensive confectioners with no recognized competitive moat can see Piotroski scores deteriorate if input cost inflation — cocoa, sugar, packaging — compresses margins faster than pricing can recover. | ||
The two most recent earnings misses and an average negative surprise of -1.4% across the available track record indicate that analyst consensus tends to overshoot Tootsie Roll's actual delivery, creating a pattern of modest but persistent disappointments. Earnings | Earnings surprises return to positive territory in at least 2 of the next 3 quarters as estimates are reset more conservatively. | →Stable |
| CounterThe earnings data in the analysis dates to 2014-2015, making it unclear whether the current miss pattern reflects recent business conditions or simply stale historical data; more recent reporting periods could show different results. | ||
Revenue and earnings growth are modest — in the low single digits — while the stock has no analyst coverage beyond a neutral rating, meaning Tootsie Roll is valued purely on its intrinsic earnings power without a catalyst for multiple expansion. Growth breakdown | Revenue growth turns positive and exceeds 3% year over year within 12 months, supporting modest upside to the $41.14 resistance target. | →Stable |
| CounterA confectioner with no meaningful growth, no moat, and stale analyst coverage may trade at a permanently compressed multiple; the 8.7% upside to resistance is achievable but may take longer than 12 months without a catalyst. | ||
Volume is accumulating with rising on-balance volume despite the stock trading below its 200-day moving average, and the support and resistance technical score of 8.1 suggests the stock is near a historically meaningful support level that could provide a buying opportunity.
↓DeterioratingMomentum breakdown
- Expectation
- Price rises above the 200-day moving average within 9 months as volume accumulation translates into price recovery.
CounterBelow-200-MA setups with rising on-balance volume can be momentum divergences that resolve lower rather than higher, particularly in low-growth consumer defensive stocks with no catalyst visible on the horizon.
A Piotroski F-Score of 7 out of 9 and strong Bollinger Band support score of 6.7 indicate that Tootsie Roll's financial fundamentals are sound across multiple dimensions and the stock is technically near a support zone that has historically attracted buyers.
↑ImprovingQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above through the next annual reporting cycle.
CounterConsumer defensive confectioners with no recognized competitive moat can see Piotroski scores deteriorate if input cost inflation — cocoa, sugar, packaging — compresses margins faster than pricing can recover.
The two most recent earnings misses and an average negative surprise of -1.4% across the available track record indicate that analyst consensus tends to overshoot Tootsie Roll's actual delivery, creating a pattern of modest but persistent disappointments.
→StableEarnings
- Expectation
- Earnings surprises return to positive territory in at least 2 of the next 3 quarters as estimates are reset more conservatively.
CounterThe earnings data in the analysis dates to 2014-2015, making it unclear whether the current miss pattern reflects recent business conditions or simply stale historical data; more recent reporting periods could show different results.
Revenue and earnings growth are modest — in the low single digits — while the stock has no analyst coverage beyond a neutral rating, meaning Tootsie Roll is valued purely on its intrinsic earnings power without a catalyst for multiple expansion.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 3% year over year within 12 months, supporting modest upside to the $41.14 resistance target.
CounterA confectioner with no meaningful growth, no moat, and stale analyst coverage may trade at a permanently compressed multiple; the 8.7% upside to resistance is achievable but may take longer than 12 months without a catalyst.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.4 |
| ROA | 3.6 |
| Gross margin | 2.9 |
| Op margin | 3.6 |
| Net margin | 6.5 |
| Current ratio | 9.7 |
| FCF quality | 4.8 |
| Moat | 4.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 62% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
1.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 0.0 |
- ▸Declining revenue: -1%
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.8 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
Insider
2.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 0.5 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions reducing
Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 3.3 |
| growth rank | 0.0 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 1.7 |
| 52w position | 7.9 |
| gap | 6.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 0.0 |
| volatility | 6.7 |
| put call | 8.8 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 9.9 |
- ▸High IV: 82%
Catalyst
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 1.8 |
| dividend safety | 6.8 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:65d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
7.7%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 63, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.1B<$5B
Investment implication
The F-path SELL output fired on the hard insider floor: insider score of 2.8 sits below the 3.0 threshold (heavy insider selling), which triggers SELL regardless of other dimensions. Co-occurring failed gates ( DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 6.0, Quality at 5.2, and Sentiment at 5.0; the weakest are Growth at 1.1, Insider at 2.8, and Peer rank at 2.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Solid Financial Health Metrics
Trip ifPiotroski F-Score falls below 5 in the next annual reporting cycle, signaling material financial health deterioration.
- P2Earnings Miss Pattern
Trip ifEPS surprise falls below -10% in at least 2 of the next 3 quarters, indicating estimate misses are deepening.
- P3Technical Support Zone With Momentum
Trip ifPrice falls below $35.84 stop-loss, more than 5% below the current $37.86, and on-balance volume turns negative.
- P4Low Growth Moderate Valuation
Trip ifRevenue growth remains below 0% for 3 consecutive quarters, indicating the business is contracting rather than stagnating.