Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on IEC Electronics Corp. (NYSEMKT:IEC) due to its excellent fundamentals in more than one area. IEC is a financially-robust company with a an impressive history 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, take a look at the report on IEC Electronics here.
Undervalued with solid track record
In the past couple of years, IEC has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, IEC also outperformed its industry, which delivered a growth of 62%. This paints a buoyant picture for the company. IEC's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. 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 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, IEC's share price is trading below the group's average. This further reaffirms that IEC is potentially undervalued.
For IEC Electronics, I've put together three fundamental aspects you should further examine:
- 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 firstname.lastname@example.org. 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.