Precision Electronics Analysis

dividend

Pros

Cons

• Unable to evaluate Precision Electronics's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
• Unable to evaluate Precision Electronics's dividend against the top 25% market benchmark as the company has not reported any payouts.

health

Pros

• Precision Electronics is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Precision Electronics is profitable, therefore cash runway is not a concern.
• Precision Electronics is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 1.7x debt.
• Precision Electronics's cash and other short term assets cover its long term commitments.

Cons

• Debt is not well covered by operating cash flow (8.3%, less than 20% of total debt).
• The level of debt compared to net worth has increased over the past 5 years (19.5% vs 127.2% today).
• Interest payments on debt are not well covered by earnings (EBIT is 1.8x annual interest expense, ideally 3x coverage).
• Precision Electronics's level of debt (127.2%) compared to net worth is high (greater than 40%).
• High level of physical assets or inventory.

management

Pros

• Ashok's remuneration is lower than average for companies of similar size in India.
• Ashok's compensation has been consistent with company performance over the past year, both up more than 20%.
• The average tenure for the Precision Electronics management team is over 5 years, this suggests they are a seasoned and experienced team.

Cons

• The average tenure for the Precision Electronics board of directors is less than 3 years, this suggests a new board.

misc

Pros

Cons

• Precision Electronics is not covered by any analysts.
• Precision Electronics has significant price volatility in the past 3 months.

past

Pros

• Precision Electronics has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).

Cons

• Precision Electronics has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.
• Precision Electronics's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
• Precision Electronics used its assets less efficiently than the IN Communications industry average last year based on Return on Assets.
• Precision Electronics has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Precision Electronics has become profitable in the last year making it difficult to compare the IN Communications industry average.

value

Pros

• BSE:517258 is up 33.6% outperforming the Communications industry which returned 2.1% over the past month.
• BSE:517258 is up 33.6% outperforming the market in India which returned 8% over the past month.

Cons

• Precision Electronics's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Precision Electronics's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Precision Electronics is overvalued based on assets compared to the IN Communications industry average.
• Precision Electronics is overvalued based on earnings compared to the IN Communications industry average.
• Precision Electronics is overvalued based on earnings compared to the India market.
• 517258 underperformed the Communications industry which returned -29.7% over the past year.
• 517258 underperformed the Market in India which returned -14.5% over the past year.