STRT - Strattec Security: Fairly Valued But Not A Long Term Holding Opportunity

Summary

• Strattec Security Corp. manufactures vehicle access and power systems. It has a set of global JVs and alliances that generate almost $4 billion in revenue.
• The company's sales have grown in line with U.S. auto sales. However, its margins have declined consistently, pushed by competition.
• Using a cycle average of net income, the company does not seem overvalued today. However, because of its declining trend, it is not undervalued either.
• Some investors might find STRT interesting for cyclical trading, although caution is advised, as the cycles are getting shorter-lived.

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