Q: TVK is down almost 20% YTD. I have held this stock for about 3 years and have done very well. Are you aware of anything stock specificate ? What are your thoughts? I hate to see my profits disappear.
5i Research Answer:
TVK has been a solid compounder over the years, it is growing fast mostly driven by acquisitions and expansion across industrial segments. There have been some recent concerns about high debt loads and acquisition funding, but its net debt/EBITDA is below 3.5X now, and its forward earnings multiple has contracted. We might expect some continued consolidation here until valuation reaches an attractive level or earnings expectations begin to expand materially again. We think it can do well, but investors may need some patience here.