University of Illinois at Urbana-Champaign Applied Portfolio Management Methode Electronics Cindy Anggraini Lu Han Rahul Gohil Vanditha R Zhi Cheng (Nicole)

Slides:



Advertisements
Similar presentations
Shao-Lun Lu Ying Jiang Hui Li. Agenda  Company Overview  Relevant Macroeconomic Trends  Industry Structure Analysis  Financial Analysis  Projections/Assumptions.
Advertisements

Financial Sector Jeff Voorhees Tyler Ragor. Agenda Overview Analysis Valuation Recommendation Overview AnalysisValuationRecommendation.
Accenture Plc (ACN) Analysts: Chris Landqvist, Justin Pippitt, Kelli Coldiron & Wei Pi.
Netgear (NTGR) Bharath Chandrashekhar Daniel Kleeman Shalini Sivarajah Presented: April 10, 2014.
Maxwell Shoe Company Ben Bittrolff Mark Mitchell Andrea Ranalli Ryan Ricci Sonia Varkey Done By:
Industry Analysis - Porter's Five Forces
Allegheny Technologies Incorporated NYSE: ATI May 3, 2009 By: John Ortelle.
BSG Company B Industry 42 Presented by: Sebastian Corredor
Leiyi Huang (Sally) Siyang Zhang Hui Li Qun Yu (Jett) April 22 nd,
Zix Corporation November 20, Agenda 1.Introduction 2.Macroeconomic Review 3.Relevant Stock Market Prospects 4.Company Review 5.Financial Analysis.
National HealthCare Corporation December 2, 2014 Ricky Fang, Fan Fei, Jacob Stoiber.
Jiazi Cui Ying Jiang Presented: April 24, Agenda  Company Overview  Relevant Macroeconomic Trends  Industry Structure Analysis  Financial Analysis.
Recommendation: BUY United Parcel Service (UPS); Sell NG, JOYG, BHP.
Indian Automobile Sector Analysis
( An IACBE Accredited Institution ) Industry Analytics Post Graduate Programme (2010 – 12) 3rd Term Alliance Business School Bangalore.
Netgear, Inc April/03/2012 Presentors: Ryo-Seob(Joseph) Kim Jionghan(JD) Dai Han(Henry) Yang Pattharaporn (Pauline) Lertphaiboonsiri Yen-Hua(Gina) Huang.
Union Pacific Corporation (UNP) Ilham Bachtiar, Kyle Castner, Michael Haberkorn, Yichen Sun Presented March 31, 2015.
Sector Presentation Sector: Materials Brian Mandel Minh Le Ellis Krienik.
Recommendation: Buy Intel (INTC). Key Investment Points Appears to be undervalued compared to the market Strong Research & Development High Dividend.90.
Simulation Debrief December 7 th Executive Team President: Clay Bridges VP Sales: Miu Goto VP Marketing: Casie Huffman VP Production: Robb Harper.
National HealthCare Corporation (NHC)
ILLINOIS TOOL WORKS INC. APRIL 23, 2013 Kaushik Andra, Dan Ballantine, & Keaton J. Cervantes.
Magna International Meeting of Shareholders May 2, 2006 Vincent J. Galifi Executive Vice-President and Chief Financial Officer.
Deere & Company Yen-Hua Huang (Gina) Cheng- Yuan Huang Yu-Te Hung (Ted) Te-Chi Kuo (William) Presented: April 12, 2012.
Creating Value at Dell Computers Meeting with Treasurer March 2 nd, 2001 Jennifer Murray, Project Manager Jing Wang, Industry Expert Moin Kazi, Strategic.
Ari Lazar Kyle Castner Jessica Kan Gongsheng Wang Presented April 28, 2015.
© TRW Automotive 2012 TRW Welcomes RIMS Detroit Chapter P1 Today’s Topic: A View from the C-Suite Keynote Speaker: Neil Marchuk, Executive VP Human Resources,
Flexsteel Industries Inc. BY ARI LAZAR AND MICHAEL MIGUT NOVEMBER 3, 2015.
Portfolio Managers: Honglu Liu Min Min Chen Rafi Qi He Presented April 17, /14/2015.
Ari Lazar, Gabriella Wang, Jessica Kan, Sai Poddutur Presented 4/7/15
WABASH NATIONAL CORPORATION (NYSE:WNC)
GOODYEAR TIRE AND RUBBER COMPANY
Amey Dargude Rahul Gohil Shruti Shah Vanditha Mysore Ravindranath Yujiang (Walter) Chen Source: Nov 17, 2015.
Analysts: Amey Dargude Cindy Anggraini Jiaqi (Tommy) Jiang Siwei (Lerrisa) Li Xuan (Lucy) Liang University of Illinois at Urbana-Champaign Applied Portfolio.
Charlie Penicook and Zuowei Xu November 19, 2013.
Ivana Tong ◊ Sid Shekhar ◊ Matt Tomlinson ◊ Haswiny Deva
Stock Analysis: Materials Andrew Givens March 6, 2007 Student Investment Management.
Industry Analysis Shahadat Hosan Faculty, MBA Program Stamford University Bangladesh 15 June 2011.
Aditi Das Pien-Cheng WeiSashikanth Yenika Yanan Tan Yin Jen Kao (NYSE: COF) Investment Managers:
Flexsteel Industries Inc.
What Does it take to Succeed in this Industry? Economic Sociocultural Global Technological Political / Legal Demographic IndustryCompetitor Threat of new.
Walgreens Boots Alliance NASDAQ: WBA Presented by Zhi Cheng (Nicole) Low Yanan (Phoebe) Tan Zulay Sosa Bazante Rahul Gohil Shruti Shah Presented on March.
1 Research term paper Five major sections: Company background / introduction Competitive strengths Financial analysis (focus section) Stock valuation analysis.
F5 Networks Inc. Nasdaq: FFIV Analysts Amey Dargude | Mihir Londhe Rahul Gohil | Shruti Shah Vanditha Mysore Ravindranath Presented on 31 st March 2016.
Seagate Technology PLC Kyle Gesuelli. Which securities fit with the portfolio’s strategy and make sense in the current market? STX comprises largest loss.
Analysts: Ari Lazar | Jordan Peasel Contributors: Cindy Anggraini | Madina Yunussova Mihir Londhe | Zhi Cheng Low April 21, 2016 IMA– SPRING 2016 | University.
NOTE: To change the image on this slide, select the picture and delete it. Then click the Pictures icon in the placeholder to insert your own image. GOODYEAR.
Air Lease Amey Dargude Cindy Anggraini Kun (Katy) Chen Madina Yunussova Tanvi Rotkar April 7, 2016.
CHAPTER 4 INDUSTRY AND COMPANY ANALYSIS Presenter’s name Presenter’s title dd Month yyyy.
Buckle Inc. Ari Lazar | Bi (Brian) Ge | Cindy Anggraini | Siwei (Lerissa) Li April 28th, 2016 RCMP – Spring 2016.
Union Pacific Corporation
Jiaze Li Ningzhou Fang October 18, 2016.
Kaiser Aluminum Corporation (KALU)
Liting Shen Jiamo Tian Ning Wang Presented on Sept. 29, 2016
Analysts: Minhao Gu, Tian Luo, Tim Widick
Agenda Section I Business Summary Company Overview Business Segments
Ari Lazar | Cindy Anggraini | Madina Yunussova
Sashikanth (Sash) Yenika Vanditha Ravindranath
Applied Portfolio Management
Flexsteel Industries, Inc.
Presented By Jiaqi (Tommy) Jiang
Microcontroller Market
DOUGLAS DYNAMICS INC. TEAM MEMBERS: BHARATH CHANDRASHEKHAR, ROBERT EBERHAD, PURVI MITTAL, SHALINI R SIVARAJAH Presented: April 22, 2014.
History of Telenor INTERNATIONAL BACKGROUND Pioneer mobile Company
Miller Industries NYSE : MLR Yunfeng Bian Zuoquan Li
Verizon Communications Inc.
Nawal Kaiser Ameera Mohammed Layla AlKhabbaz Ali Hussain Faisal
Financials Sector Presentation
Ford Motor Company SIC Consumer Retail.
© 2017 Global Market Insights, Inc. USA. All Rights Reserved Battery Electric Vehicles Market Growth Potential, Price Trends, Competitive Market Share.
Presentation transcript:

University of Illinois at Urbana-Champaign Applied Portfolio Management Methode Electronics Cindy Anggraini Lu Han Rahul Gohil Vanditha R Zhi Cheng (Nicole) Low December 1, 2015

ANALYSTS Cindy Anggraini Lu Han Rahul Gohil Vanditha R. M Zhi Cheng (Nicole) Low

Holding 100 shares on Apr 13, 2015 Purchase Price = $46.61 Current Price = $36.08 at Nov 30, 2015 Return = % Source: Yahoo Finance

AGENDA Company Overview Macro-economic Overview Financial Analysis Technical Analysis Projection & Valuation Recommendation

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

Company Overview: Introduction Automotive Interface Power Products Other Business Description Manufacturer of component and subsystem devices Year Founded 1946 Market Cap $1.4 billion TTM P/E Primary Industry Electronic Manufacturing Services Source: Yahoo Finance

Company Overview: Operating Coverage USAEuropeAsia The company is operating globally, with mostly in USA, Europe, and Asia The biggest facilities are in Mexico and Malta

Company Overview: Revenue Breakdown (2015) ProductGeographic Source: Investor Presentation

Company Overview: Automotive Segment Integrated Center Console Ford General Motors Renault Fiat Aston Martin Transmission Solutions General Motors Ford VW Torque Sensor BMW Hidden & Ergonomic Switches Global Market Share of 18% European Union Market Share of 35% Source: Investor Presentation

Company Overview: Interface Segment Consumer Touch Panels High resolution LCD touchscreens Over 30% of commercial/industrial solid state touch interfaces in North America Industrial User Interfaces Radio Remote Control Solutions Data Center Infrastructure Solutions Fiber Optic & copper cable assemblies Uninterruptable Power Supply Main Clients Coca Cola, John Deere, Whirlpool, Kitchen Aid, Maytag, Hitachi Source: Investor Presentation

Company Overview: Power Products Segment Braided flexible cables EV bus bar assemblies Nissan Leaf North America & Europe Each vehicle requires 48 battery modules Three Methode assemblies utilized on each battery module Tesla S PowerRail Power distribution system Currently shipping to “Big Data” customer Source: Investor Presentation

Company Overview: Future Projects SmartCenter Stack Wireless cell phone connection, Vehicle touchscreens HighPerTouch Enhanced touch performance 10G Copper Transceiver Modules More cost effective than optical counterparts Dabir Surfaces New technology for pressure ulcer prevention Source: Investor Presentation

Company Overview: SWOT Strengths Distribution and sales network Tax advantages due to global locations Low debt financing Weakness High exposure to automotive sector, esp. Ford and GM Lengthy sales cycle Price of raw materials Highly competitive market environment Exchange rate Opportunities Engagement in M&A activity Diversifying product portfolio Threats Changes in technology Continued pressure to lower prices SWOT

Company Overview: Porter 5 Forces Bargaining Power of Buyers: High Bargaining Power of Suppliers: Moderate Threats of New Entrants: Low Threats of Substitutes: Moderate Rivalry: Moderate Porter 5 Forces Bargaining Power of Buyers – High Continued pressure to lower prices to avoid competition Bargaining Power of Suppliers – Moderate Availability of raw materials from different suppliers Threat of new entrants – Low High initial investments Threat of substitutes – Moderate Customized products for each manufacturer Rivalry among existing competitors – Moderate Competition on Price and Technological advancements

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

Macro-economic Overview Automotive Industry US vehicle sales will rise to record peak in 2017 Tesla S and Nissan leaf among top 5 electric car models Electronic Industry Rapidly-increasing data traffic is driving the demand for data storage Global power electronics market growth rate to fall post 2018 Heavy Equipment Industry Agriculture equipment demand to fall in US, offset by Asia Heavy construction equipment market driven by emerging markets Source: KPMG’s Global Automotive Executive Survey 2015, Clean Technica, DatacenterDynamics, HIS Technology, PR Newswire, Freedonia Group

Macro-economic Overview Automotive Outlook Based on Sales Volume Long-term Touch Module Shipment Forecast Source: IHS, KPMG Global Automotive Survey GM & Ford will hold their position by sales volumes in 2020 Touch Panel Module shipments to rise but at lower growth rates

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

Financial Analysis: Agenda Financial Highlights Liquidity and Leverage Ratio Profitability and Activity Ratio Greenblatt and Dupont Ratio

Financial Highlights: Revenue Breakdown (2015) AutomotiveInterfacePower Products Source: 10-k 2015

Financial Analysis: Liquidity & Leverage Ratio Liquidity Ratio Leverage Ratio Source: 10-k 2015

Financial Analysis: Profitability & Activity Ratio Profitability Ratio Activity Ratio Source: 10-k 2015

Financial Analysis: Greenblatt & Dupont Ratio Greenblatt Ratio Dupont Analysis Tax Burden134.48%73.68%107.39%126.61%83.69% Interest Burden90.63%100.00%96.68%103.13%107.66% Operating Profit Margin3.74%2.45%7.54%9.52%12.73% Asset Turnover1.26x1.24x1.53x1.49x Leverage1.44x1.54x1.48x1.39x ROE 3.27%14.95%28.21%23.77% Source: 10-k 2015

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

Technical Analysis Methode Electronics Big drop (around 30%) on June 25, 2015 because company’s financial results were not able to meet the investor expectations. Source: Yahoo Finance

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

Projection and Valuation: Agenda Assumptions Revenue Projection Valuation : DCF and Comparable 1 2 3

Projection and Valuation: Assumptions Management guidance for 2016 Sales - $830-$865mm Operating Income - $108-$119mm Continue to invest in core business and grow Maintaining strong and flexible balance sheet with ample liquidity Targeting 5 year EBITDA CAGR of 9-10% Auto sales to peak in 2017 and drop after that Source: Investor Presentation

Projection: Revenue Revenue ProjectionRevenue Projection per Segment

Projection: Revenue per Segment Interface Power Products Automotive

Valuation: DCF

Valuation: Sensitivity Analysis

Valuation: Comparable Methodology Industry: Electronic Manufacturing Services Sector: TechnologySimilar Product MixSimilar End Markets International Exposure CTS Designs and manufactures sensors and actuators, and electronic components worldwide. Amphenol Designs and manufactures electrical, electronic, and fiber optic connectors worldwide. AVX Designs and manufactures electronic passive components and interconnect solutions worldwide.

Valuation: Comparable Valuation Result LTM EV/RevenueLTM EV/EBITDALTM P/ELTM P/BV CTS Corp. (CTS) 1.4x8.4x22.8x2.7x Amphenol Corp. (APH) 3.3x14.1x22.9x80.5x AVX Corp. (AVX) 1.1x5.9x11.0x1.2x Median 1.4x8.4x22.8x2.7x Implied Price Equally weighted average price per share: $41.3

Valuation: Background of Comparison MEI is a unique company Most of its revenue comes from automotive Market treats MEI similar to its customers 1 2 3

Valuation: Comparable Valuation Result (Cont.) Equally weighted average price per share: $32.2 LTM EV/RevenueLTM EV/EBITDALTM P/ELTM P/BV Whirlpool Corp. (WHR)0.8x8.7x19.0x2.7x General Motors Company (GM)0.6x6.0x13.3x1.7x Ford Motor Co. (F)1.1x10.8x12.0x2.1x Deere & Company (DE)2.1x13.8x 3.8x Median1.0x9.8x13.6x2.4x Implied Price

Company Overview Macro- economic Overview Financial Analysis Technical Analysis Projection & Valuation Recomm endation

SELL Comparable Valuation DCF Valuation Revenue Projection Industry Factor Sell 100 price

THANK YOU