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TDK: Record-High Capex And R&D Spend Are Negative For The Shares

Karreta Advisors profile picture
Karreta Advisors


  • TDK is embarking on a product diversification strategy for its successful battery business involving record-high levels of capex and R&D.
  • Although this has potential benefits for the long term, we believe this strategy will lead to negative free cash flow and limited earnings upside.
  • Guidance implies the shares are trading on PER FY3/2022 18.8x and 1.3% dividend yield. Whilst undemanding, we are sellers of the shares.

技術者は、アップル iPhone のバッテリーを交換してみました
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Investment thesis

TDK (OTCPK:TTDKY) is embarking on a product diversification strategy for its successful battery business. This will involve record-high levels of capex and increasing R&D, resulting in a significant negative free cash flow

This article was written by

Karreta Advisors profile picture
We are an independent research house. We look at global stocks, favoring those with sustainable growth and recognized or emerging as a high quality franchise at suitable valuations. We primarily serve institutional investors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

Good call - the market is agreeing with you. About 6 months ago, I had targeted ~$125 as an entry point for TDK, but I am now dropping it from my prospect list..
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