Flawless balance sheet and undervalued
FN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. FN appears to have made good use of debt, producing operating cash levels of 1.52x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. FN’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if FN’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the electronic industry, FN is also trading below its peers, relative to earnings generated. This bolsters the proposition that FN’s price is currently discounted.
For Fabrinet, I’ve put together three pertinent aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for FN’s future growth? Take a look at our free research report of analyst consensus for FN’s outlook.
- Historical Performance: What has FN’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!