PKE - Park Aerospace: Growth Still On The Horizon

2024-04-07 01:03:53 ET

Summary

• Park Aerospace is prepared for a season of higher growth on the programs it currently supplies, especially the LEAP-1A jet engines for Airbus.
• The combined elements of higher growth and no debt make for an attractive investment profile if the valuation is fair.
• On the valuation basis of EV/EBITDA multiple, even with fairly conservative assumptions around EBITDA growth relative to management's forecast, valuation is fair with upside potential remaining.

With final stage in the breakup of General Electric finalized earlier this month as GE Aerospace ( GE ) and the energy business GE Vernova ( GEV ) started to trade separately, the Wall Street Journal ran a nice photographic retrospective of General Electric. The once towering conglomerate is no longer, but its legacy will undoubtedly persist for at least another generation. Though I don't have any direct financial interest personally in any of that legacy at the moment, I've encountered it in my little rural corner of the world where I've encountered a co-worker who used to work for GE whose retirements were seemingly ruined when the company was tottering, and I even have a neighbor who works for the new energy division. Although I do not have a direct interest in GE per se, I do follow it with interest, as its LEAP jet engines are a major driver of the fortunes of a company I am invested in....

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