Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineImproving backdrop for still cheap TT Electronics
TT ELECTRONICS (TTG) 244p
Gain to date: 15.6%
Original entry point: Buy at 211p, 25 March 2021
The pace of the reopening recovery in some parts of the global economy has seen plenty of companies raise financial guidance for 2021, TT Electronics (TTG) among them.
Trading has further strengthened with organic sales ahead by 7% year-on-year in the first four months for 2021 while orders continue to run ahead of sales, presumably as customers look to lock in supply chain demand to meet their own improving prospects.
What this means for TT Electronics is that earnings before interest, tax and amortisation is anticipated to be towards the upper end of market expectations.
That range had been set at between £33.6 million and £35.4 million. Profit by the same measure in 2019, the last year before the pandemic impacted trading, totalled £44.5 million, so there’s still a way to go but analysts are increasingly confident. Consensus is for £51.3 million in 2023, which would be a record for TT.
As we explained in the original article, engineer TT is expanding beyond its traditional sensors and instrumentation markets into fast-growing, and more profitable, digital areas. This includes supplying complex connectivity, automation and machine learning components and systems for industrial, renewables and medical applications.
SHARES SAYS: A revised 2022 price to earnings multiple stands at 13.9, inexpensive given the ongoing recovery scope. Buy.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Issue contents
Case study
Feature
Great Ideas
- Hill & Smith set to cash in on US infrastructure boom
- Improving backdrop for still cheap TT Electronics
- Buy Shield Therapeutics as it stands on cusp of US breakthrough
- Bank a tidy profit on UDG as private equity swoops
- Investors toast Diageo’s £4.5 billion capital return
- Coca-Cola HBC should fizz higher on reopening
