I took a quick look over their fundamentals, here is a brief summary of the things that I liked and disliked:
Likes:
- Company is actually profitable. Sounds simplistic, but there sure are a lot of companies trading that seem to rely on constant equity issues as their sole business model.
- Roughly 119 million shares o/s, not toooo bad for a company of this size
- Revenue is growing, though not at a stellar rate (most recent quarter over quarter growth was about 5%), big company though, so rapid revenue growth at this point is fairly unlikely
Dislikes:
- A very significant portion of the company's assets section ($4.5 billion) is Goodwill. I'm not an accountant, so I'm not going to comment on this in detail, but it's worth noting that a very significant portion of the company's stated long-term assets are an intangible asset. Perhaps they are overpaying by a great deal when they have been aquiring other companies (goodwill is recognized when you pay a higher price than fair value of a company's net assets).
- Inventory seems a bit on the large side to me ($2.3 billion), and is growing. I would like to see some stats on inventory turnover, can't say much more without spending more time to familiarize myself with their business model.
- Accounts payable seems very high ($1.1 billion) in relation to cash & equivalents ($410 million)
- $2.1 billion in long-term debt. This isn't as big of a factor right now due to the fact that we're in a low interest rate environment, but what happens once rates start to go up?
- Low gross margins - 15%. This is another case where I can't comment too much, but this company appears to have very high percentage costs for each dollar of revenue.
