This week’s trade comes from the consumer discretionary sector, the auto parts industry. Highlights for this trade are the recent breakout of the stock, suggesting sentiment has turned more bullish. We also like the P/E multiple and the profit margin. The one negative is the quarterly earnings growth (-6.30%). However, that doesn’t appear to be changing the market’s outlook on GNTX. Enjoy.
Company profile: Gentex Corporation provides digital vision, connected car, dimmable glass, and fire protection products worldwide. It designs, develops, manufactures, and markets automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, tier-one automotive mirror manufacturers, and various aftermarket and accessory customers. The company also manufactures and sells variable dimmable windows to aircraft manufacturers and airline operators. In addition, it provides photoelectric smoke detectors and alarms, electrochemical carbon monoxide detectors, and alarms, audible and visual signaling alarms, and bells and speakers for use in fire detection systems in office buildings, hotels, and other commercial and residential establishments. Gentex Corporation sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. The company was founded in 1974 and is headquartered in Zeeland, Michigan.
Trailing P/E: 15.93, Forward P/E: 14.84
EPS: 1.62, Beta: 1.17
P/S: 3.59, P/B: 3.55
Profit margin: 23.45%
Operating margin: 27.28%
ROA: 14.39%, ROE: 22.52%
Qrtly earnings growth: -6.30%
Current ratio: 4.80
Additional fundamental data: https://finance.yahoo.com/quote/GNTX/key-statistics?p=GNTX
Recently broke out of a 13-month consolidation
New 52-week high, New all-time high
Buying momentum (RSI) is positive and rising
Buying volume is neutral
1st support level is at $24.75
The target is $29.70
Suggested buying approach: Buy Gentex at the current price level. If the stock pulls back, as long the price level is above the stop, wait for confirmation of support and then add to the position. Always use a 3% trailing stop.