MFI is consumer staples name, now trading at 22x times' Forward P/E. Revenue in the last five years grew around 6% on average. The balance sheet is quite leveraged, with net debt of $1.8B, Total debt is around 11x times the trailing twelve-month cash flow of $170M, and cashflow is negatively affected largely due to a challenging operating environment in 2022. At a normalized level, debt-to-cash flow is around 5.0x-6.0x. Based on consensus estimates, sales are expected to grow by 4%-6% over the next few years. The buyback program allows MFI to repurchase up to 10% of the total share outstanding. However, historically MFI has not been an aggressive share repurchaser. Given the valuation, debt and growth prospects, we think there are better opportunities in the market.
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