Q: This company has been doing good lately. Is worth investing in it?
5i Research Answer:
Momentum and cash flow are good, and solid EPS growth is expected (in the 15% range). The balance sheet has some leverage (2x cash flow). Valuation is decent at 18x earnings, and the last quarter was good. The dividend is attractive at 3.08%. Offseting these positives is its small size ($800M market cap) and the somewhat cyclicality of its business. FFH owns 50% of the company, insiders own 2.5% and have been buyers. It is a decent, but higher risk, small cap. We would be OK owning a small position.