Electronic Connectors
Methode Electronics, Inc. designs, engineers, and produces mechatronic products worldwide. It operates through four segments: Automotive, Industrial, Interface, and Medical. The Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers. Its products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames, and LED-based lighting and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Industrial segment manufactures lighting solutions; industrial safety radio remote controls; braided flexible cables; current-carrying laminated busbars and devices; custom power-product assemblies, such as PowerRail solution; high-current low-voltage flexible power cabling systems; and powder-coated busbars that are used in various markets and applications comprising aerospace, cloud computing, commercial vehicles, industrial, military, power conversion, and transportation. The Interface segment provides various copper-based transceivers and related accessories for the cloud computing hardware equipment and telecommunications broadband equipment markets; user interface solutions for the appliance, commercial food service, and point-of-sale equipment markets; and fluid-level sensors for the marine/recreational vehicle and sump pump markets. The Medical segment offers Dabir Surfaces, a surface support technology aimed at pressure injury prevention for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures. Methode Electronics, Inc. was incorporated in 1946 and is headquartered in Chicago, Illinois.
Sector
Discounted Cash Flow Valuation of Methode Electronics Inc
Growth
%
%
Discount
%
%
Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $19.3M | $18.29M | $17.33M | $16.43M | $15.57M | $14.75M | $13.98M | $13.25M | $12.56M | $11.9M | $11.28M | $112.8M |
DCF | $15.91M | $13.11M | $10.8M | $8.902M | $7.336M | $6.045M | $4.982M | $4.106M | $3.383M | $2.788M | $27.88M | |
Value | $105.2M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 05-2015 | 04-2016 | 04-2017 | 04-2018 | 04-2019 | 05-2020 | 04-2021 | 04-2022 | 04-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 11% | 10% | 11% | 6.3% | 9.2% | 12% | 11% | 8.8% | 6.5% | -5.1% |
ROA | 19% | 17% | 16% | 14% | 8.7% | 11% | 9.2% | 8.5% | 5.7% | -2.8% |
ROE | 22% | 18% | 17% | 9.1% | 13% | 16% | 13% | 11% | 8.2% | -6.9% |
The average Net Margin over the past 5 years is +9.01%.
The trend of Net Margin over the past 5 years is -0.02%.
The average ROA over the past 5 years is +9.41%.
The trend of ROA over the past 5 years is -1.17%.
The average ROE over the past 5 years is +11.8%.
The trend of ROE over the past 5 years is -0.38%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 05-2015 | 04-2016 | 04-2017 | 04-2018 | 04-2019 | 05-2020 | 04-2021 | 04-2022 | 04-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | - | 0.65 | 0.22 | 0.82 | 5.61 | 3.85 | 1.65 | 3.68 | 3.41 | 17.18 |
Debt Equity | 0.01 | 0.12 | 0.05 | 0.09 | 0.42 | 0.47 | 0.28 | 0.24 | 0.33 | 0.40 |
MIN | ||||||||||
Graham Stability | - | - | - | 62% | 100% | 100% | 100% | 91% | 66% | 62% |
The Debt/FCF trailing twelve month is 17.18.
The trend of Debt/FCF over the past 5 years is 0.14.
Graham’s Stability measure stands at 0.62.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 04-2016 | 04-2018 | 05-2020 | 04-2022 | Trend |
---|---|---|---|---|---|
Revenue | 5.5% | 5.4% | 4.8% | 1.4% | 0.88% |
Net Income | -1.3% | 6.2% | -15% | -25% | -1.2% |
Stockholders Equity | 10% | 8.4% | 6.3% | 3.1% | -0.8% |
FCF | 0.53% | 5.3% | -1.7% | 49% | 4.2% |
The Revenue CAGR over the past 5 years is +5.37%.
The trend of Revenue growth rate over the past 5 years is +0.88%.
The Earnings CAGR over the past 5 years is +6.15%.
The trend of Earnings growth rate over the past 5 years is -1.22%.
The Equity CAGR over the past 5 years is +8.37%.
The trend of Equity growth rate over the past 5 years is -0.8%.
The FCF CAGR over the past 5 years is +5.31%.
The trend of FCF growth rate over the past 5 years is +4.21%.