OC - Insteel Industries: Knowing When Enough Is Enough
2024-05-21 23:35:34 ET
Summary
- Insteel Industries' stock has risen 49.7% despite a decline in revenue, profits, and cash flows.
- The company's profitability has taken a hit due to a drop in selling prices and shipments of its products.
- The future outlook for IIIN is uncertain, with weakness in the non-residential construction market likely to impact revenue.
- All of this makes it a prime candidate for a downgrade.
Around a year and a half ago, in early November 2022, I performed an analysis of Insteel Industries ( IIIN ), a company that operates as a massive manufacturer of steel wire reinforcing products that are used in concrete construction applications. Examples include prestressed concrete strand, as well as welded wire reinforcement. At that time, I liked the company for its revenue growth. I was also impressed by how cheap shares were and the fact that the company had net cash on its books. At the end of the day, this led me to reiterate the 'buy' rating I had on the stock....
Insteel Industries: Knowing When Enough Is Enough