ha! yet another CETX paid stock promotion article written by paid research promoter SeeThruEquity
NEW YORK, NY / ACCESSWIRE / October 18, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced that it has issued a company note on Cemtrex, Inc. (CETX).
The report is available here: CETX Company Note.
Cemtrex Inc. (NASDAQ CM: CETX, "Cemtrex") is a diversified global technology company that offers a full suite of industrial and manufacturing solutions to an impressive list of global customers in the electronics, medical device, automotive, consumer, and industrial sectors. The company is headquartered in Farmingdale, NY, and has more than 500 employees worldwide, with locations in India, China, Germany, and Romania. Cemtrex operates in two segments, Electronic Manufacturing Services (EMS) and Industrial Products and Services (IPS). Cemtrex's EMS solutions include advanced engineering, assembly and design services, and prototype development, while its IPS segment offers broad-based industrial services, plant maintenance, and specializes in industrial air filtration and control systems for industrial customers operating in emerging markets.
Highlights from the note include:
Cemtrex Offers Compelling Value in the EMS Space
Led by CEO, Saagar Govil, Cemtrex has executed an aggressive acquisition-based growth strategy, being named among Deloitte's ranking of North America's 500 fastest growing 500 technology firms in three of the last five years. Since 2012, revenues have grown nearly tenfold, from approximately $12mn to 2017E guidance of $118mn - $120mn.
Despite this growth, Cemtrex appears to be overlooked on Wall Street and undervalued relative to peers in the industrial manufacturing and electronics manufacturing (EMS) industry. Indeed, at the recent price of $2.85, Cemtrex has a market capitalization of just $29.2mn and trades at 7.2x our estimate for 2017E EPS of $0.40. By contrast, publicly traded companies in the EMS space, such as Benchmark Electronics (BHE), Jabil (JBL), and Flextronics (FLEX), trade at P/E multiples that range from 15x to 22x.
Cemtrex Makes Exchange Offer to Acquire Key Tronic
On September 5, 2017, Cemtrex announced its intention to issue an exchange offer for Spokane, Washington-based EMS company Key Tronic (KTCC). Terms of the move specified that Cemtrex would offer to exchange each outstanding share of common stock of Key Tronic for one share of Cemtrex common stock.
As part of the announcement, Cemtrex Chairman and CEO, Saagar Govil, also issued a letter to Key Tronic shareholders outlining the terms of the offering set forth in an S-4 that has been filed with the SEC. Key Tronic has operated in the EMS industry for more than 40 years and has operations in several US cities, Juarez, Mexico and Shanghai, China. In August the company reported FY2017 revenues of more than $465mn.
We note that the disparity in recent prices of Key Tronic and Cemtrex suggest that the offer indicated would likely be only a first step in any acquisition process. In a follow-up to the announcement, issued on September 13, 2017, Cemtrex management reiterated its outlook for the company to achieve approximately 30% YoY topline growth in FY17E, with revenues expected to be in a range of $118mn to $120mn. The company has also formed Cemtrex Advanced Technologies, a subsidiary focused on growth opportunities in the technology industry, including what management described as a "once-in-a-generation" opportunity in electronics for "Internet of Things," wearables, and its own line of proprietary high tech products, such as the recently announced enterprise smart desk.
$6.45 Price Target for Cemtrex
Cemtrex remains deeply undervalued relative to peers in the EMS space. The target of $6.45 suggests a P/E ratio 14.0x trailing EPS of $0.46, and 16.1x our 2017E estimate of $0.40 per share.
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