As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of IEC Electronics Corp. (NYSEMKT:IEC), it is a financially-healthy company with a a great track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on IEC Electronics here.
Undervalued with solid track record
Over the past few years, IEC has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. Not only did IEC outperformed its past performance, its growth also surpassed the Electronic industry expansion, which generated a 42% earnings growth. This is what investors like to see! IEC is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that IEC manages its cash and cost levels well, which is an important determinant of the company’s health. IEC’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps IEC expand.
IEC’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of IEC’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the electronic industry, IEC is also trading below its peers, relative to earnings generated. This supports the theory that IEC is potentially underpriced.
For IEC Electronics, there are three important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for IEC’s future growth? Take a look at our free research report of analyst consensus for IEC’s outlook.
- Dividend Income vs Capital Gains: Does IEC return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from IEC as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IEC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.