Twin Disc, Incorporated (TWIN): fair value, margin of safety and Wheel Score

Is TWIN undervalued?

Twin Disc, Incorporated (TWIN) closed at 26.05 on 16 Oct 2026. The GLS average fair value - the simple average of the 7 valuation models that produced a positive number - is 47.75, which puts the price 45% below it. 3 of the 7 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

The 7 models disagree widely: DDM gives 2.50 while Graham Growth gives 109.70. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files TWIN under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.

Nine valuation models for TWIN

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is average - TWIN passes 5 of the nine Piotroski tests, which falls one point short of the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 4.1 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are moderate - ROIC 10.2%, ROE 12.3%, ROA 6.7% - with debt at 0.20 times equity and a free-cash-flow yield of 2.4%.

The dividend yield is 0.65% with a payout ratio of 8% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Manufacturing 72%, Distribution 28% (quarter Q4 FY2026).

Institutional ownership scores 8/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 64: Fair

TWIN scores 64 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 25/25, Health 11/20, Moat 6/15, Premium 15/20, Stability 6/20. Stability (6/20) is where the points are missing.

Implied volatility is 79% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (15 of 20) because volatility this high usually comes with a reason. Chain open interest is thin - 376 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.

Volume runs at 71k shares a day on a market cap of $379M, with a beta of 0.67 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 6 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

Twin Disc, Incorporated reports earnings on 30 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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