That $17.6 billion valuation? Long gone. Freescale's stock is now worth just $2.7 billion, and when you add in the company's $5.9 billion in net debt, the whole company is now valued at just $8.5 billion. Freescale trades for less than three times trailing EBITDA, and that multiple can sharply expand when the company's debt load starts to gradually lighten in coming years.
Goldman Sachs estimates that Freescale will generate roughly $1.10 a share this year in free cash flow. That figure should rise to $2 in 2013 and nearly $3 by 2014 as the semiconductor cycle steadily builds.
DuocomunFears of a slowdown in defense spending have really weighed on Duocomun (DCO), which trades 60% off its 52-week high. Yet as it turns out, Duocomun is much more exposed to the commercial aircraft market. The company makes a wide variety of composite and metal bond structures and assemblies, including aircraft wing spoilers, large fuselage skins, helicopter blades, flight control surfaces and engine components. And Boeing (BA) is a huge customer, promising a steady stream of orders for Duocomun as production ramps up on the 737,777 and 787 planes. Shares look awfully cheap, trading for six times projected 2013 profits of $1.85 a share. A hefty $390 million debt load is one of the reasons shares are so cheap. Yet management is committed to a steady debt paydown, and as that happens, the multiple should slowly expand. Spotting an opportunity, three insiders recently acquired a collective 18,000 shares at an average price of $9.40. Indeed, shares haven't been this low since 1997. To see these stocks in action, visit the 5 Value Stocks Insiders Are Snapping Up.
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