There are great companies, and there are great stocks. The two are often the same, but in the case of 3D engineering and design software company Autodesk (NASDAQ: ADSK) , automation company Rockwell Automation (NYSE: ROK) , and universal lubricant company WD-40 (NASDAQ: WDFC) , a great company is matched with a not so great valuation. All three trade on sky-high valuations and have some aggressive-looking earnings targets to meet in order to make them a good value.
Let's take a look at WD-40's enterprise value (market cap plus net debt), or EV, to earnings before interest, taxation, depreciation and amortization (EBITDA) multiple. Simply stated, EV-to-EBITDA. It's a useful metric that includes an appreciation for debt levels.
There's no way around the fact that all three of the above-mentioned companies trade on hefty absolute valuations, and WD-40 has a particularly high rating compared to its historical performance.
For further details see:
3 Companies I Love Whose Valuations Terrify Me