IEC Electronics: Internal Restructuring, Low Risk Capital Structure, Undervalued By 25%-70%
- A high degree of specialization and wide breath of manufacturing capabilities has cultivated a strong position for IEC in the electronic contract manufacturing services industry.
- Internal restructuring is underway and will continue to serve as an underlying catalyst for future growth.
- IEC's efficient capital structure uses a low level of debt financing, which greatly reduces the risks associated with a high degree of financial leverage.
- IEC's earnings are improving, but the uncertainty behind future cash flows provides room for variability in its near-term intrinsic valuation.
- The firm-specific risks are not going away, but IEC's low correlation keeps total investment risk to a minimum and provides sound diversification from market risk.