Replies to post #6843 on Cemtrex Inc (CETX)

[ksuave]

It looks like Seeking Alpha is trying to hand us another opportunity to load up on the cheap again.

I'm beginning to wonder if they are truly short or if they are just trying to buy cheap themselves.

I have found Cemtrex, Inc. (NASDAQ:CETX) to be a low price-to-book value, high-ROIC company worthy of additional evaluation. After analyzing the company's fundamentals, management, competitive advantages, growth strategy and valuation, I have found that . . . it appears to be an undervalued, fundamentally sound company with significant upside potential . . .

. . . the company has consistently posted high ROIC and ROE while also dramatically growing book value per share.

In addition to high profitability, the company also appears to be in a decent financial shape with a current ratio of 1.73 while also reducing its Debt to Equity ratio (currently at a fairly high 0.74, but down from 3.37 in 2014).

Mr. Govil and his team have apparently done a terrific job of allocating capital by turning the company into a rapidly growing, profit-generating machine. His accomplishments have not gone unnoticed: Business Insider named him #17 on its "Top 100 of Silicon Alley" and Stony Brook University named him to its "Top 40 Under 40" lists.

The company points to six key growth drivers as reasons for shareholder optimism for additional wealth creation: [Chart here]
The company also forecasts growth to be boosted by the construction of 1,000 GW of power generator capacity in India over the next three decades, continued growth in gas and pipeline demand causing liquefied natural gas facilities to rush to catch up, continued strong growth in global packaging, Chinese implementation of a cap and trade program this summer, growth in Chinese car manufacturing capability, growth in the smart car trend fueling demand for automotive electronic systems, mass transformation in jewelry and industrial clothing companies to incorporate more technology into its products, rapid growth in the medical devices industry and the continued aging of the developed world's population.

. . . the company clearly lays out its case as an undervalued growth company that is focused on creating shareholder value:

Particularly attractive are the company's remarkably low trailing and forward P/E numbers and low P/B (1.8) which includes very little Goodwill. A Price/Cash Flow ratio of 4.7 is also extremely attractive.

Additional valuation models (Jitta (fair value of $9.78) and GuruFocus (DCF fair value of $8.41)) and recent insider buying contribute further to the case for its massive undervaluation.

On the other hand, they have promoted their stock price. Oh my!