This vehicle supplier beat analysts’ estimates by $.09 last quarter, and Wall Street expects it to grow at a rate of 27.5% this year.
Stoneridge, Inc. (SRI)
From Positive Patterns
Stoneridge, Inc. (SRI) is a manufacturer of very technical/highly engineered electrical and electronically-related components for the automotive business, which includes all types of vehicles—commercial/motorcycle/off-road and even agriculture vehicles.
Stoneridge is a global supplier separated into three different divisions: Control Devices (sensors, switches, valves, and actuators that monitor, measure, or activate specific functions within a vehicle), Electronics (electronic instrument clusters, electronic control units, and driver information systems, camera-based vision systems, monitors, and related products), and PST (in-vehicle audio and video devices, electronic vehicle security alarms, convenience accessories, vehicle monitoring and tracking devices, and infotainment systems).
I think the changes coming in the auto business fit right in to what this small company does, and I expect exciting earnings gains in the next five years.
SRI keeps a pretty pristine balance sheet, with just about as much cash as debt. SRI sells for less than 10 times this year’s cash flow and free cash flow is solid. SRI has been showing good relative strength here lately, inching toward new highs, and a close above $34 would be a very good sign. I would buy SRI up $33.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, July 16, 2019