In the last post we evaluated Ceragon Network Limited’s financial statements from 2013 to 2016 and concluded Ceragon is not investible right now mainly because of the company’s negative retained earnings.
Today we will talk about whether Fabrinet has a durable competitive advantage and is investible long-term.
Founded in 2000 and headquarters in Thailand, Fabrinet manufactures complex components and modules for optical communication systems as well as industrial lasers and sensors to many industries such as automotive, aerospace and medical. In the 2016 fiscal year, Fabrinet has generated over $370 million US of revenue and employs over 7,000 people worldwide.
Fabrinet has been trading in the New York Stock Exchange since 2010 and its current price is $37.60.
Here is the financial statement analysis of the company from 2014 to 2017 (the company’s fiscal year ends on June every year):
Ultimately, I think Fabrinet is a very financially health company. First of all, the company’s retained earnings increases every year. Second of all, the company’s current ratio is high compared to other manufacturing companies. Lastly, the company’s debt to shareholders’ equity is low.
However, Fabrinet is still a very young company (less than 20 years old) and has only been a public company for seven years. I would like to see how the company progresses in the next few years before I make the decision.
In the next post I will talk about a few more stocks that I found. Please feel free to comment below. Catch you on the flip side!