Q: This company has had a rough go since the last Q's results. To me it looks like a very stable business that is now trading at trough multiples. It looks like the buyback has been re-initiated at these levels. Feels like this might be an opportunity - do you agree?
5i Research Answer:
NWC has had a very solid uptrend over the decades, but in eary 2024 it had a really strong run, which it is now consolidating from. Its forward earnings multiples ran up to a high of 17X in late 2024, and are now coming back to more reasonable levels. At 14X forward earnings, it is around its five year average, and below its 10 and 20 year averages of 15.3X and 15.6X, respectively. Its forward earnings growth is expected to be strong. We view it as a solid company, and while earnings could trade a bit lower, we think over the long-term it can continue to do well - we would be comfrotable averaging into a position here.