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Category: Richardson Electronics (RELL)
Date: 8 January 2021 Stock price of Richardson Electronics (RELL): $5.88 In this article we take a look at Nasdaq listed Richardson Electronics, a leading global provider of engineered solutions, power grid and microwave tubes and related consumables 2nd quarter 2021 earnings report. For the quarter the group reported net sales of $42.2 million and net income of $1.166 million
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We were happy with the sales growth in Healthcare, PMG and semiconductor wafer fab equipment products despite the ongoing impact of the coronavirus around the world - Edward J. Richardson, Chairman, Chief Executive Officer, and President. "
More About Richardson Electronics
Richardson Electronics, Ltd. is a leading global provider of engineered solutions, power grid and microwave tubes and related consumables; power conversion and RF and microwave components; highvalue flat panel detector solutions, replacement parts, tubes, and service training for diagnostic imaging equipment; and customized display solutions. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The Company’s strategy is to provide specialized technical expertise and “engineered solutions” based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure.
Overview of Richardson Electronics 2nd quarter 2021 earnings report
- Net sales of $42.4 million were up 7% from last year’s pre-COVID second quarter.
- Sales increased for PMG, Healthcare, and Semiconductor Wafer Fabrication equipment products in the second quarter of fiscal 2021 versus the second quarter of fiscal 2020.
- Gross margin improved to 33.8% of net sales for the second quarter of fiscal 2021 versus 32.0% of net sales in the prior year’s second quarter.
- Operating expenses increased $0.3 million to $13.5 million compared to the prior year’s second quarter. Legal expenses increased by $0.3 million.
- Operating income was $0.9 million compared to an operating loss of $0.5 million in last year’s second quarter.
- Earnings per common share (diluted) for the second quarter of fiscal 2021 was $0.05.
- Cash and investments were $46.0 million as of November 28, 2020 versus $42.5 million on August 29, 2020 and $46.1 million on November 30, 2019.
Richardson Electronics management commentary on their 2nd quarter 2021 earnings report
LaFox, IL, JANUARY 6, 2021: Richardson Electronics, Ltd. (NASDAQ: RELL) today reported financial results for its second quarter ended November 28, 2020. The Company also announced that its Board of Directors declared a $0.06 per share quarterly cash dividend.
Net sales for the second quarter of fiscal 2021 increased 7.0% to $42.4 million compared to net sales of $39.6 million in the prior year’s second quarter primarily due to higher net sales for PMT and Richardson Healthcare, partially offset by lower net sales for Canvys. Richardson Electronics is an “essential business” and continued operating its manufacturing and distribution businesses on a global basis throughout the pandemic under strict safety guidelines. PMT sales increased by 11.2% from last year’s second quarter as a result of higher sales of semiconductor wafer fab equipment specialty products as well as power conversion and RF and microwave components. Power grid tube sales continued to be negatively impacted by the pandemic, however sales of certain product lines increased from the second quarter of fiscal 2020. Richardson Healthcare sales increased $0.6 million or 28.2% primarily due to a significant increase in demand for the ALTA750 TM Tubes, which was the highest quantity sold in any quarter. In addition, equipment sales increased in Latin America. Canvys sales decreased by $1.2 million or 14.7% due to temporary decreased customer demand globally related to COVID-19.
Net sales for the second quarter of fiscal 2021 increased 7.0% to $42.4 million compared to net sales of $39.6 million in the prior year’s second quarter primarily due to higher net sales for PMT and Richardson Healthcare, partially offset by lower net sales for Canvys. Richardson Electronics is an “essential business” and continued operating its manufacturing and distribution businesses on a global basis throughout the pandemic under strict safety guidelines. PMT sales increased by 11.2% from last year’s second quarter as a result of higher sales of semiconductor wafer fab equipment specialty products as well as power conversion and RF and microwave components. Power grid tube sales continued to be negatively impacted by the pandemic, however sales of certain product lines increased from the second quarter of fiscal 2020. Richardson Healthcare sales increased $0.6 million or 28.2% primarily due to a significant increase in demand for the ALTA750 TM Tubes, which was the highest quantity sold in any quarter. In addition, equipment sales increased in Latin America. Canvys sales decreased by $1.2 million or 14.7% due to temporary decreased customer demand globally related to COVID-19.
“We were happy with the sales growth in Healthcare, PMG and semiconductor wafer fab equipment products despite the ongoing impact of the coronavirus around the world” said Edward J. Richardson, Chairman, Chief Executive Officer, and President. “We were also pleased with the significant free cash flow generated during the quarter reflecting our commitment to carefully control expenses and capital expenditures” he concluded
Richardson Electronics (RELL) stock price history over the last 5 years
The image below shows the stock price performance of Richardson Electronics (RELL) over the last 5 years. And its been a pretty volatile but overall very flat performance by the stock of Richardson Electronics. Over the last 5 years the stock of Richardson increased by just 5.7%. The stock of Richardson Electronics is trading at a lot closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Richardson Electronics stock is positive right now.
Latest stock valuation of Richardson Electronics (RELL)
So what is Richardson Electronics (RELL) stock worth based on their 2nd quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Richardson Electronics at $10.70 a stock
We therefore believe the stock of Richardson Electronics is undervalued at its current price of $5.88
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $10.70, thus a good entry point into Richardson Electronics would be at $9.60 or below.
Since the stock of Richardson Electronics is trading at well below our suggested entry point we rate the stock of Richardson Electronics as a buy
We therefore believe the stock of Richardson Electronics is undervalued at its current price of $5.88
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $10.70, thus a good entry point into Richardson Electronics would be at $9.60 or below.
Since the stock of Richardson Electronics is trading at well below our suggested entry point we rate the stock of Richardson Electronics as a buy
Next earnings release of Richardson Electronics
It is expected that Richardson Electronics will release their 3rd quarter 2021 earnings report in early April 2021
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