MEI - Embedded Expectations Analysis - 2018 08 28
Methode Electronics, Inc. (MEI:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.0x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to fade, and management is concerned about their ability to improve margins, and performance in AsiaSpecifically, management may lack confidence in their ability to sustain elevated income levels. Additionally, they may lack confidence in their ability to increase margins in their recently acquired businesses, and substantially increase free cash flow in fiscal 2019. Moreover, they may be concerned about their ability to rebound from poor results in Asia due to weak steering angle sensors and lead frame performance. Finally, they may lack confidence in their ability to secure an international government grant as they have done for the past two consecutive years
Methode Electronics is a manufacturer of component and subsystem devices. The company's business segments are: Automotive, which supplies electronic and electro-mechanical devices and related products; Industrial, which manufactures external lighting solutions, industrial safety radio remote controls, braided flexible cables, current-carrying laminated busbars and devices; Interface, which provides a variety of copper and fiber-optic interface and interface solutions for the appliance, commercial food service, construction, consumer, material handling, point-of-sale and telecommunications markets; and Medical, which includes surface support technology aimed at pressure injury prevention.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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