CTAS - Cintas: More Dangerous Overvaluation

2024-06-07 07:07:06 ET

Summary

• Cintas has outperformed significantly, generating a TSR of 42.16% since the last article was published.
• The company is a class-leading business service provider with strong financial performance and profitability.
• I believe that the current valuation is excessive and consider CTAS to be overvalued, recommending a "Hold" stance.

Dear readers/followers,

In the last article on Cintas ( CTAS ), which today was exactly a year ago, I made the decision to stay neutral and a "HOLD" for Cintas - and this worked out well if you were already a Cintas shareholder. Unfortunately, this wasn't the case if you weren't already an investor in Cintas - because the company outperformed quite significantly, generating a TSR of 42.16% since my last piece - which you can find here.

What caused this outperformance, and why was my assessment wrong? When it comes to companies like this, it's always a matter of looking at how "high things" may go before they drop back down. I am in no way averse to the fact that Cintas deserves a high premium - it does....

For further details see: