Is Preformed Line Products (NASDAQ:PLPC) A Risky Investment?
Is Preformed Line Products (NASDAQ:PLPC) A Risky Investment?
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Preformed Line Products Company (NASDAQ:PLPC) does carry debt. But should shareholders be worried about its use of debt?
著名基金經理李璐(受查理•芒格支持)曾說:“最大的投資風險不在於價格波動,而是你是否會遭受資本永久損失。”因此,聰明的投資者知道,通常伴隨着公司破產的是債務,債務是一個非常重要的因素。重要的是,Preformed Line Products Company(納斯達克:PLPC)確實有負債。但是股東們是否應該擔心它的債務使用呢?
What Risk Does Debt Bring?
債務帶來了什麼風險?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.
當企業無法輕鬆通過自由現金流或以有吸引力的價格籌集資本來履行債務時,債務和其他負債對企業變得具有風險。資本主義的本質是“創造性破壞的”過程,其中銀行家無情地清算失敗的企業。然而,更常見(但仍然昂貴)的情況是,公司必須以低廉的股價稀釋股東,僅僅是爲了控制債務。當然,債務的好處是它常常代表着便宜的資本,特別是當它替代了在能以高回報率重新投資的公司中的稀釋時。當我們檢查債務水平時,我們首先考慮現金和債務水平一起。
What Is Preformed Line Products's Debt?
Preformed Line Products的債務是什麼?
The image below, which you can click on for greater detail, shows that Preformed Line Products had debt of US$56.5m at the end of March 2024, a reduction from US$85.2m over a year. However, because it has a cash reserve of US$45.9m, its net debt is less, at about US$10.6m.
下面的圖片顯示,Preformed Line Products在2024年3月底的債務爲5650萬美元,相比一年前的8520萬美元有所減少。然而,由於它有4590萬美元的現金儲備,因此其淨債務較少,約爲1060萬美元。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240625/0-99243c12fca3e834f72c6406b9ef390c-0-166f1c78ccaa25ca4cf34a513bb34d1b.png/big)
A Look At Preformed Line Products' Liabilities
觀察Preformed Line Products的負債
According to the last reported balance sheet, Preformed Line Products had liabilities of US$99.7m due within 12 months, and liabilities of US$73.0m due beyond 12 months. Offsetting these obligations, it had cash of US$45.9m as well as receivables valued at US$111.5m due within 12 months. So its liabilities total US$15.4m more than the combination of its cash and short-term receivables.
根據最近的資產負債表,Preformed Line Products在12個月內應償付的負債爲9970萬美元,12個月後應償付的負債爲7300萬美元。 抵消這些義務,它有4590萬美元的現金以及估值爲11150萬美元的應收賬款。因此,它的負債總額比其現金和短期應收賬款的總合計高1540萬美元。
Given Preformed Line Products has a market capitalization of US$614.3m, it's hard to believe these liabilities pose much threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time.
由於Preformed Line Products的市值爲6.143億美元,很難相信這些負債構成了多大的威脅。但是我們認爲值得關注其資產負債表的實力,因爲它可能隨着時間的推移而改變。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
爲了衡量公司相對於其收益的債務情況,我們計算其淨負債除以利息、稅項、折舊和攤銷前收益(EBITDA)和其利息支出除以利息前收益(EBIT)的比例(其利息覆蓋率)。這種方法的優點是,我們既考慮了債務的絕對量(淨負債與 EBITDA),又考慮到了與該債務相關的實際利息支出(其利息覆蓋率)。
Preformed Line Products's net debt is only 0.12 times its EBITDA. And its EBIT easily covers its interest expense, being 63.0 times the size. So you could argue it is no more threatened by its debt than an elephant is by a mouse. The modesty of its debt load may become crucial for Preformed Line Products if management cannot prevent a repeat of the 28% cut to EBIT over the last year. When it comes to paying off debt, falling earnings are no more useful than sugary sodas are for your health. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Preformed Line Products will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
Preformed Line Products的淨債務僅爲EBITDA的0.12倍。它的EBIT輕鬆覆蓋了利息支出,規模爲63.0倍。因此,你可以說它面臨的債務威脅不比大象面臨老鼠更多。如果管理層無法防止去年EBIT削減28%的重演,則其債務負載的謙遜可能對Preformed Line Products至關重要,當涉及償還債務時,收益下降對健康的影響不會少於含糖汽水。在分析債務水平時,資產負債表顯然是開始的地方。但是你不能將債務完全隔離開; 因爲Preformed Line Products需要收益來服務那些債務。因此,在考慮債務時,肯定值得查看收益趨勢。單擊此處,獲取交互式快照。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. So it's worth checking how much of that EBIT is backed by free cash flow. In the last three years, Preformed Line Products's free cash flow amounted to 31% of its EBIT, less than we'd expect. That's not great, when it comes to paying down debt.
最後,公司只能用冷硬的現金支付債務,而不是會計利潤。因此,值得檢查多少EBIT支持自由現金流。在過去的三年中,Preformed Line Products的自由現金流佔其EBIT的31%,低於我們的預期。在償還債務方面,這並不好。
Our View
我們的觀點
Based on what we've seen Preformed Line Products is not finding it easy, given its EBIT growth rate, but the other factors we considered give us cause to be optimistic. There's no doubt that its ability to to cover its interest expense with its EBIT is pretty flash. When we consider all the factors mentioned above, we do feel a bit cautious about Preformed Line Products's use of debt. While we appreciate debt can enhance returns on equity, we'd suggest that shareholders keep close watch on its debt levels, lest they increase. Over time, share prices tend to follow earnings per share, so if you're interested in Preformed Line Products, you may well want to click here to check an interactive graph of its earnings per share history.
根據我們所看到的,總的來說Preformed Line Products不容易,考慮到它的EBIT增長率,但我們考慮到的其他因素讓我們有了樂觀的理由。毫無疑問,它用EBIT支付利息費用的能力非常棒。當我們考慮上述所有因素時,我們確實對Preformed Line Products的債務使用持謹慎態度。儘管我們認爲債務能夠增強股本回報,但我們建議股東密切關注其債務水平,以免其增加。隨着時間的推移,股價往往會跟隨每股收益,因此,如果您對Preformed Line Products感興趣,您可能需要單擊此處,查看其每股收益歷史的交互式圖表。
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
說到底,有時更容易關注那些甚至不需要債務的公司。讀者可以免費查看零淨債務增長股票列表,立即獲得。
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這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。
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