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Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Milwaukee-based Strattec Security Corp. makes automotive access control products, including mechanical locks and keys, electronically enhanced locks and keys, ignition lock housings, latches, power sliding doors systems, power life gate systems, power deck lid systems, door handles and other access control related products for North American automotive customers. Its products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea and China. It has a market cap of $270-million (U.S.).
Strattec trades for 12.1 times ttm EPS. The Joel Greenblatt-inspired model likes its 14.5-per-cent earnings yield, using EBIT/enterprise value.
The company has grown EPS at a 43-per-cent clip over the long term (using avg of 3 and 4yr EPS growth rates), part of why it gets strong interest from Peter Lynch model. The Lynch model also likes its 0.28 yield-adjusted P/E-to-growth ratio.
The James O'Shaughnessy-based growth model likes that it has upped EPS in each year of past half decade. The O'Shaughnessy approach also likes its combo of a strong 12 month relative strength of 92 and a reasonable price/sales ratio of 0.69.
The Martin Zweig-based model likes that earnings growth has been accelerating -- 185 per cent last quarter vs. 43 per cent long-term.
The company has has no long-term debt, an 18-per-cent return on equity, and size and strong momentum could make it subject to short-term volatility.
John Reese is long STRT.
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