Is anyone else looking at UFPI right now, it seems extremely undervalued fundamentally at its current price. I was thinking maybe is got hammered down with the rest of small and medium caps, but maybe I am missing something.
UFPI is currently trading at 12 times earnings, despite its extremely strong balance sheet and high earnings growth potential.
UFPI currently has 354 million dollars in liabilities, including 160 million dollars in long term debt, with 17 million dollars of debt due in the short term. UFPI currently has 168 million dollars in cash and short term assets (compared to only 27 million at the beginning of 2019). UFPI management has done an extremely good job of aggressively paying down debt and holding a strong cash reserve, something that will allow them to weather the Covid-19 crisis without running the risk of bankruptcy. Current Debt to Equity currently stands at just under 13%.
UFPI's also has extremely high earnings potential, with pre-Covid-19 estimates at 22% EPS growth over the next five years. UFPI is not going to be able to hit that growth number for the next couple of years, but their long term growth potential should be largely intact as the US construction industry begins to recover over the next couple of years. At a current valuation of 12 times price to earnings UFPI is trading at a very cheap valuation, discounting future growth heavily.
While UFPI's sales will most likely be a standstill for the next couple of quarters, I assume their sales will begin to pick back up once the economy begins to reopen over the next couple of quarters (years? who knows). Their strong balance sheet will allow them to weather the virus a lot longer than other companies in their industry and they shouldn't have to issue debt in order to survive the crisis.
I feel like this stock is a very solid fundamental pick right now for the medium to long term