Replies to post #103429 on Savvy Trades and Investments

[hweb2]

Yep think you're spot on with BELFB. The commentary about a flattish 2023 (from that lower revenue base too) not that great. After a monster 2022, not terrible by any means. But nothing exciting either. Plus current Q1 is seasonally weaker as you noted...and sounds like it'll only be a slight improvement vs last year. They also said Q4 was the first quarter in awhile with a book-to-bill below 1. Not severely, but maybe a worrisome trend with the economy slowing.

After listening to the CC, I understand why the stock is down now. The puzzling thing is why the initial reaction was a pop higher. As the CC was held this morning before the open. Stock appears slightly undervalued in the low $30's imo, and I wouldn't be surprised if it rebounded from today's selloff. But considering BELFB was trading at $15 last summer, it could keep slipping lower too.

[Swick984]

BELFB - after listening to the call again, you’re correct in your statements. Those additional one-time customer charges contributed to revenues, but were dilutive to margins. So while revenue is expected to potentially decline on a reported basis, profit excluding restructuring costs may come in above 2022.

I continue to believe the opportunities in front of them are longer-term in nature, with aerospace still operating below potential, mobility in early innings, magnetic working through a short term blip and strong backlog/orders in their Power solutions segment. I believe their restructuring actions to consolidate operations should also provide further operating leverage and efficiencies.

At this multiple, I think the risk / reward is attractive and that there are significant long-term opportunities beyond this upcoming year. It certainly may bounce around this year, and I’ll be selling $45/$50 OTM calls on rallies and $30 puts on dips around my core position.