Q: I sense some ambivalence in your regard for NTR. I have an existing position in NTR, well above break even and am thinking this might be a good time to bulk up. Wait or buy? thanks
5i Research Answer:
Please also see this answer from today. We like the NTR’s valuation, trading at 10.7x Forward P/E, which is at the lower end of historical averages (ranging from 7x to 20x). The balance sheet is also decent, with net debt/EBITDA in only at 1.3x. The company has a shareholder-friendly policy of aggressively repurchasing shares. Although the near-term outlook is not so attractive, we think investors could do quite well at this valuation three or five years from now. Overall, we would be comfortable adding here, to a position size that reflects its cyclicality.