Current Price: $20.00
Industry: Electronics
The Company designs, develops, engineers, manufactures and markets laser-based products, primarily used for cutting, welding and marking a wide range of materials.
What I like:
- A low P/E ratio compared to that of its peers, while maintaining a high beta. This stock has crashed along with the market recently, but traditionally gives better than market returns.
- This stock price has a 52-week high of nearly $44 and the fundamentals are in place where it could get back up near those levels, especially in the right economic climate.
- Despite being in an industry where R&D is prevalent, Rofin-Sinar has traditionally not carried much debt on its balance sheet, and it maintains that tradition with only about $23 million in debt featured on their latest interim balance sheet.
- Sales are rising according to interim statements and look to once again be on pace with 2008 levels.
- ROI and ROA remain above industry averages.
What I don't like:
- Profits dipped quite low in 2009-2010 and while they look to be rebounding, it remains to be seen if Rofin-Sinar can maintain those levels for more than a couple of quarters.
- This is an industry that averages negative sales growth. While RSTI has managed to keep this growth positive, the overall industry trend is not good.
- Recent interim statement inventory levels are much higher than normal. Hopefully this is not a sign that the company is unable to move its stock.
Verdict: With the recent market crash, RSTI fell from the $30-35 share price range down to its current level. While I doubt that it can regain its $44 share price of a few months ago, there does not seem to be any reason it can not return to that $30-35 range if general market conditions improve.
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