Is ALG a high-quality business?

AlphaMadera's AlphaQuality grade scores Alamo Group Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how ALG compares to a Buffett-style quality bar.

What is Alamo Group Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to ALG based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes ALG a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

ALG - Alamo Group Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $189.00 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

C+ 61.7 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

C 55.2

5yr Avg ROIC 8.6% 53/100
Operating Margin Trend +0.17 pp/yr 60/100

Capital Efficiency

Weight: 15%

C+ 57.0

5yr Avg ROE 9.4% 57/100
5yr Share-Count CAGR 0.4% 57/100

Growth Quality

Weight: 25%

C+ 59.4

5yr Revenue CAGR 4.7% 58/100
5yr EPS CAGR 6.2% 61/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 20%

B- 62.4

5yr FCF Margin 5.4% 51/100
5yr FCF/NI Conversion 0.77x 76/100

Balance Sheet

Weight: 10%

A+ 94.0

Net Debt / EBITDA -0.45x 97/100
Interest Coverage (EBIT/Int) 10.38x 86/100
Altman Z-Score 4.62 98/100

Stability

Weight: 5%

C 51.0

EPS Volatility (σ/μ) 0.40 43/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 2/5 60/100

1 of 1 gurus held; 1 trimmed; 2 full exits.

Holders: 1
Avg Δ position: -59.1%
New buys: 0
Full exits: 2

Greenblatt sold -100%
Wood sold -100%
Cooperman decreased -59%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.