Q: This seems like a very cheap company. Would you recommend a small holding in a diversified portfolio?
5i Research Answer:
The stock is quite cheap at 7X earnings, but this has not stopped it from declining. It is down 23% YTD and 54% in a year. The balance sheet is fine with $15M net cash. Good growth is expected next year but EPS this fiscal year is expected to drop 50%. Cash flow remains OK. It is cyclical, and there is some tariff risks here as well. We would see it as a HOLD on valuation, but not an ADD.