Stock price when the opinion was issued
It provides fuses, silver protectors to the automotive, industrial and data centres as well as other component parts for electrification of the world. Data centres are an important part of AI technology. It has done well in growing the business at 10 to 12% on a yearly basis and we're looking at a dividend growth rate of 12% per year. Buy 2 Hold 6 Sell 0
(Analysts’ price target is $267.88)LFUS is $6.1B market cap, trading at 29X earnings with a 1.04% yield. Net debt is about 1X cash flow, and EPS growth has been decent, though a decline is expected this year before about 30%+ growth in 2025. Versus a group of Bloomberg peers, it is cheaper on P/E but has a lower return on equity and much lower growth (at least this year, -6% vs +16%). Its yield is average versus peers. All-in, while we don't have a lot really against it, with some debt and less growth it just does not compare so favourably with peers.
Unlock Premium - Try 5i Free
All the energy that's about to be consumed through electrification needs fuses. Smartphones have not been growing, but if Apple's iPhone with AI has traction, should see a pickup. A lot of automakers are struggling, and that's 2/3 of its business.
Still generates free cashflow and turns profits into 100% free cashflow. Financial flexibility to get them through these slower times. If stock price falls so that the portfolio position falls to 2%, he buys more to bring it up to a 3% weighting.