TSX:NEO - Post Discussion
Post by
retiredcf on Nov 07, 2021 9:19am
Assessment
With all the talk of an expanding onshore production of keep compounds/components, the shortage of rare earth minerals and the future with renewable energy, I would have thought NEO would have performed better.
We don't think it has a real 'moat' but is well-run and will still benefit from the sector's growth. Gross margins are in the low 20% range, and net margins are pretty slim. It's expected to show flat growth in 2022 but should improve after that. The main attraction here is valuation. It has excess cash, some cash flow and trades at only 11X earnings. It has already seen one takeover bid (which failed). We think it is attractive at $19 as it offers a decent combo of income and growth within the sector.
So said the team at 5iResearch. GLTA
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