By Rob Otman
Tech Data (Nasdaq: TECD) is a mid cap company that operates within the electronic equipment industry. Its market cap is $4 billion today and the total one-year return is 16.09% for shareholders.
Tech Data stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Tech Data reported a recent EPS growth rate of -5.77%. That’s below the electronic equipment industry average of 72.39%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the electronic equipment industry is 52.50. And Tech Data’s ratio comes in at 14.73. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Tech Data stock is 70.48%. That’s above the electronic equipment industry average of 42.17%. That’s not a good sign.
✓ Free Cash Flow per Share Growth: Tech Data has increased its FCF per share relative to its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✓ Profit Margins: The profit margin of Tech Data comes in at 0.41% today. And generally, the higher, the better. We also like to see this ratio above competitors. Tech Data’s profit margin is above the electronic equipment average of -0.60%. So that’s a positive indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Tech Data is 8.06% and that’s above its industry average ROE of 7.35%.
Tech Data stock passes four of our six key metrics today. That’s why our Investment U Stock Grader gives it a Buy with Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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