Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

Methode Electronics (MEI) is set to report earnings before the market opens today, July 1. Here are 7 factors to provide perspective ahead of that release.

1. The stock has performed well over the last year: Methode Electronics' stock has gained 43.82% over the last year, outperforming the S&P 500 index. The stock is currently trading in the middle of its 52-week range.

click for expanded images

2. Profit margins improved during the most recent quarter: Methode Electronics' net profit margin improved during the most recent quarter, increasing from -33.09% to -4.95% for the 3 months ending 2010-01-30. Gross margin increased from 13.52% to 16.98%, while the company's operating margin improved from -49.23% to -2.56%.

3. Methode Electronics' cash holdings increased during the most recent quarter: The company's Cash / Share ratio increased from 1.47506775067751 to 1.54953979426096, which represents about 15.63% of the current stock price. Cash, as a percentage of Current Assets, changed from 29.73% to 33.17% during the most recent quarter.

4. Methode Electronics' inventory turnover improved during the most recent quarter: Methode Electronics Inc. has recently reported improving inventory turnover numbers. Does this imply stronger sales, or ineffective inventory buying? The Sales / Inventory ratio increased from 1.29 to 2.96 during the most recent quarter, while the COGS / Inventory ratio also increased from 1.12 to 2.46.

5. Methode Electronics' valuation: Looking at the company's forward P/E ratio chart, you'll notice that the stock is currently trading in the middle of its 3-year valuation range.

6. Methode Electronics' reported worse than expected earnings results during the most recent quarter: The following graph shows MEI's earnings results relative to analyst estimates. A green marker indicates better than expected results, while a red marker indicates worse than expected results.

7. The company saw growth in Europe and Asia during their last quarter: In the automotive segment, net sales improved 19.1% to $43.6M in the third quarter of Fiscal 2010, attributable to stronger sales in the company's European and Asian markets.

Disclosure: No positions

Source: Methode Electronics: 7 Factors to Consider Ahead of Earnings