$Quanex Building Products (NX.US)$ Quanex Building Products(...

Quanex Building Products(NX) is an American company that went public at $13 in 2008, with a current price of $23.98. The average ROI over the past 14 years is 4.5%, which is relatively flat.

Over the past 5 years, the gross margin has fluctuated around 22%, while the return on net assets has increased from 4.8 to 14.7%. The profitability level is relatively low within the sector.

Over the past 5 years, the revenue has remained relatively stable for the first 4 years, with a significant growth of 25.9% in 2021. The operating profit has been continuously growing for the past three years, reaching 46.6% in 2021. The net income had a significant loss in 2019, but recovered in 2020 and has been growing for two consecutive years. The loss in 2019 was due to a write-down of capital assets totaling $74.6 million.

In the first two quarters of 2022, the revenue, operating profit, and net income have all increased by 17.9%, 46.4%, and 68.6%, respectively.

The profit statement for 2021 shows that the interest expense has been decreasing year by year, accounting for only 3% of the operating profit in 2021, indicating a low burden.

Over the past 5 years, the debt-to-assets ratio has decreased from 47.4% to 41.1%. The proportion of accounts receivable and inventory is relatively low, but in 2021, they have increased by $51.3 million, far exceeding the net income growth of $18.48 million, indicating a relatively virtual profit growth.

Goodwill and other intangible assets amounted to 0.217 billion, accounting for 52% of the net assets of 0.42 billion. Long-term borrowings were 75.714 million, which is not a high proportion.

Over the past 5 years, operating cash flow has exceeded investment cash flow by a large margin, resulting in a significant amount of shareholder surplus.

The current PE ratio is 14.1, the TTM PE ratio is 11.1. Considering the quality of net income growth, it may be advisable to observe for a few more quarters.