FLEX

Flex Ltd

TMT


Presented:12/18/2017
Price:$17.97
Cap:$9.63B
Current Price:$34.38
Cap:$13.65B

Presented

Date12/18/2017
Price$17.97
Market Cap$9.63B
Ent Value$10.43B
P/E Ratio17.45x
Book Value$5.43
Div Yield0%
Shares O/S536.02M
Ave Daily Vol3,292,414
Short Int3.79%

Current

Price$34.38
Market Cap$13.65B
Flex Ltd. designs, manufactures, and services consumer electronics for original equipment manufacturers. It operates through the following segments: Communications & Enterprise Compute, Consumer Technology Group, Industrial and Emerging Industries, and High Reliability Solutions. The Communications & Enterprise Compute segment includes its telecom business of radio access base stations, remote radio heads, and small cells for wireless infrastructure; its networking business, which includes optical communications, routing, broadcasting, and switching products for the data and video networks; its server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack level solutions, converged infrastructure and software-defined product solutions. The Consumer Technology Group segment provides electronics, connectivity devices, and chain solutions to mobile devices and computing businesses. The Industrial and Emerging Industries segment offers semiconductor, capital equipment, industrial automation, kiosks, metering, and lighting. The High Reliability Solutions segment caters to medical, automotive, defense, and aerospace businesses. The company was founded in May 1990 and is headquartered in Singapore.

Publicly traded companies mentioned herein: Flextronics (FLEX), Nike Inc (NKE)

Highlights

The presenter is long Flex Ltd (FLEX), a business that has steadily improved following its transition away from semiconductors, and he believes the timing and setup are attractive to look at the stock on the long side. He has owned FLEX for some time, and believes that both revenue and earnings growth are poised to accelerate on the back of the progress the company is making with Nike. With the stock trading at ~$18, it is at just over 12x his FY 2019 EPS forecast of $1.40, and 10x $1.80 of FY 2020 EPS (he is ~10 cents ahead of the Street for 2020). Given a high degree of revenue and earnings growth visibility, and some optionality around capital deployment, he intends to hold the position for the next 12-24 months.

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Idea Discussion

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