Tom Nash
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Episode 12 out of 30 - Inflation Stocks
🕑 Added 2021-12-21 11:36:19 +0000 UTCThis is the 12th out of 30 companies in our 2022 inflation proof list. Rest of companies will be completed by end of this month.
The company is Renesas Electronics - RNECF.
This is a 23-billion-dollar semiconductor company focusing on auto industry and industrial/infrastructure/IoT businesses.
At the current $12 price its an attractive long-term inflation proof investment.
High demand and supply chain shortages will allow price increases to sustain profitability during inflationary price swings while the underlying business is expected to benefits from strong fundamental growth.
a. Price: Only 19% stock growth in 2021 - underperformed.
b. Margins: 50% gross margins, 25% EBITDA and 9.5% net income margin.
c. Growth: Grew 22% in 2021 and expected to grow 25.6% in 2022.
d. Valuation: EV SALES: 3.7, EV EBITDA 15 – undervalued
e. Revenue: 8 billion in sales in TTM
f. Balance sheet: 2 billion in cash, 21 billion in assets, 11.5 liabilities.
RISK! - high debt at 8 billion USD. - mitigation: 2X assets to liabilities + strong cashflow.
RISK2! - strong competition in MCU industry: NXPI, TXN and STM - mitigation: irrelevant in 2022 and 2023 due to hard line demand and shortage - if you can make it they will buy it.
Given the 2021 underperformance of the share, I expect this to be a solid 2022 play despite inflation.
Comments
atz
If you can access to the Japanese market then you can easily buy /sell them. The code is 6723
Generico Fakero
1. Birkshire hathway BRK.B 2. $AMT American Tower Corporation (REIT) 3.$JNJ Johnson & Johnson 4. $C Citigroup 5. $KMB Kimberly-Clark Corporation 6. $BP British Petroleum 7. $EPD Enterprise Products Partners 8. $NUE Nucor Corporation 9. $PG Procter & Gamble 10. $BJK VanEck Vectors Gaming ETF 11. $XOM Exxon Mobil Corporation
Generico Fakero
its a 23 billion company. Don't think you will run into liquidity issues.
Christian Larsen
Where are the other 11?
H H
No volume. Hard to buy or sell
