Teleflex _TFX_

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Teleflex _TFX_ Powered By Docstoc
					Presenter: Jeremy Leach
Teleflex is a diversified manufacturer that
 is involved in three different segments:
 Medical, Commercial, and Aerospace.
  This involves them creating products
   ranging from anesthesia devices to
         cargo handling systems.




                   *Morningstar and Company’s Annual Report
     leading provider of disposable medical products and devices
for critical care and surgical applications.
 Acquired Arrow International in 2007
        leading global provider of catheter products for critical and
    cardiac care.
 Serves hospitals and health care providers in over 120 countries.
 Reputable Brand Names
 "I think Teleflex will be pure-play medical in the next two to
three years," analyst Paul Joseph Mammola of Sidoti & Co said.
     “This acquisition made Teleflex a healthcare-focused company” –
    Jeffrey Black (CEO)
     The medical segment accounted for 62 percent of the company's
    2008 revenue and about 75 percent of its second-quarter revenue.


                                          *Company’s Annual Report and Reuters
Revenue by Category




                                 Critical Care
                                 Surgical
                                 OEM
                                 Cardiac
                                 Other




                 *Company’s Annual Report (2008)
                             Revenue by Region




                                                             North America
                                                             EMEA
                                                             OEM
                                                             Asia / Latin America




OEM: Original Equipment Manufacturer. This is when the company
manufacturers products that are sold to other companies and retailed under the
second company’s brand name. EMEA: Europe, the Middle East, and Africa.
                                       *Company’s Annual Report (2008) & Wikipedia
 Commercial products consist of driver controls
for recreational boats, rigging services for industrial
customers and auxiliary power and alternative fuel
systems for a range of vehicles.
 Leader in steering and controls for recreational
marine.
 Established market positions and strong brands.
 Teleflex is a Tier 1 supplier of gear shift systems
to the automotive industry and a market leader in
mobile auxiliary power systems for large vehicles.


                               *Company’s Annual Report & Morningstar
  Teleflex Aerospace serves the world’s airlines and OEMs
with advanced engine repair services, cargo-handling
systems and equipment, and related aftermarket services.”
 Leading provider of on-board aircraft cargo-handling
systems.
    Teleflex's air cargo systems control a market share of
    approximately 50%.
 “Our advanced cargo-handling systems and aftermarket
services from Telair International are designated a
“preferred provider” by Boeing and Airbus on many of their
major wide-body platforms.”
 “The company's jet turbine repair blade business, in
partnership with General Electric GE, is the dominant
industry supplier.”


                                        *Company’s Annual Report & Morningstar
“Teleflex Announces Upcoming Departure of Chief
Financial Officer.”
    Cited personal reasons, will stay with company until 2010
“Teleflex Inc. Completes Sale of Power Systems Business
To Fuel Systems Solutions, Inc.”
     “Since Power Systems' contribution to Teleflex's earnings is
    minimal, we are maintaining our fair value estimate.”
UPDATE 3-Teleflex raises '09 EPS view, shares rise
   Quarter 2 EPS beat expectations ($0.96 > $0.88)
   Raised estimates of 2009 income to $3.40-$3.60 from previous
   estimates of $3.25 - $3.55.
   Sent shares up 6% after news was released, currently trading
   around pre-release price.



                                                       *Reuters & Morningstar
 Reputable brand names in the all operating segments;
especially medical.
Aligns itself with industry leaders such as: Boeing, Airbus,
and GE.
 Restructuring business model to focus on the segment that
has given them the most consistent financial results;
medical.
Global positioning reduces risk for economic downturns.
Management bonuses are based on the stock outperforming
its peers.
    This ensures that management’s incentives correspond with what is
    best for Teleflex as a whole.


                                                               *Morningstar
 Reputation of posting inconsistent financial results,
according to Morningstar.
 Analysts believe Teleflex overpaid on their acquisition of
Arrow, which also increased their financial leverage
substantially.
 History of entering into markets that end up not being as
profitable as expected.




                                                      *Morningstar
 Acquisition of Arrow allows Teleflex to increase its market
positioning in the medical segment.
 Slowly fazing out commercial and aerospace segments
would result in Teleflex being able to focus on what they do
best, which is in the medical department.
 Management’s ability to find niche markets will continue
to lead to growth in the foreseeable future.
 Teleflex’s invested markets tend to be too small for heavy
competition, which is a great competitive advantage.




                                                *Reuters & Morningstar
Increasing the medical segment while fazing out the commercial
and aerospace markets will result in less diversity, and therefore
more risk.
 Ticker: TFX
 Sector: Industrials
 Industry: Diversified Industrials
 Current Price: $47.09
 52-Week Range: $37.21 – $61.11
 Market Cap: $1.9B
 Beta: 0.79




                                      *Reuters & Morningstar
             2001   2002    2003     2004     2005    2006    2007     2008       TTM

EBT          8.4    8.3     6.6      4.1      8.3     8.3     5.7      9.1    8.9
Margin(%)

ROA(%)       7.40   7.27    5.56     0.40     5.40    5.73    4.47     2.95   7
ROE          15.3   14.82   11.05    0.88     12.33   11.96   11.63    9.3    19.47
Revenue      8      9       9.9      8.9      1.2     5.3     (26.9)   25.2   (22.6)
Growth (%)
EPS          1.1    10.1    (13.3)   (38.1)   101.8   2.6     N/A      N/A    (75.8)
Growth (%)
P/E          16.5   13.6    17.7     30.8     19.1    18.5    N/A      14.9   15.3
P/S          1      0.8     0.9      0.9      1.1     1       1.3      0.8    0.8

P/B          2.4    1.9     1.8      1.9      2.3     2.1     1.9      1.6    1.3
D/E (%)      0.29   0.26    0.22     0.62     0.44    0.41    1.13     1.15   0.89

                                                                       *Morningstar
            TFX    Industry   S&P 500   5-Year
                                        Average
P/E         15.3   87         18.2      20.2
P/B         1.3    2.2        2.1       2
P/S         0.8    1          1.1       1
Dividend    2.9    1.7        2.3       N/A
Yield (%)




                                               *Morningstar
*Yahoo Finance
*Yahoo Finance
 Morningstar Fair Value Estimate: $65
 Three-Stage DDM Calculated Fair Value:
$27
 Three-Stage FCFE Calculated Fair Value:
$116.02
 Average of Three-Stage Models: $71.51
   With 15% Margin of Safety: $60.78 – $82.24
   $47.07 < 60.78 = Suggests Undervalued

				
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posted:10/15/2011
language:English
pages:18