XPEL - Standard Motor Products: Still Attractive Despite Weakness Sending Shares Down

2024-06-10 11:34:27 ET

Summary

• Standard Motor Products, Inc., a producer and distributor of automotive parts, has experienced a decline in stock value despite revenue growth.
• The company's profitability and cash flow have been negatively impacted, with net income and operating cash flow decreasing.
• Despite these challenges, the company operates in a growing industry and shares are still considered cheap, leading to a "buy" rating.

It's always great to see revenue growth from a company. But I would trade revenue growth for profit and cash flow growth any day of the week. The fact of the matter is that, eventually, a company is only worth the present value of its cash flows. This is true of any business on the planet. So when you see a firm that experiences a rise in sales, but a corresponding decline in profits and cash flows, it should not be a surprise that the stock in question would take a hit....

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