Still, this is more of a hiccup than a warning sign. As long as there are aging vehicles on the road, then Standard Motor Products will likely be back on a modest growth path in a few quarters. And analysts at Goldman Sachs remind us that this remains as a very profitable company. Though they concede that the current speed bumps will likely cause free cash flow to fall by nearly half this year to around $1.50 a share, the Goldman analysts see that metric moving back up above $2 in 2013 and 2014.
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That means that shares sport a free cash flow yield (free cash flow divided by market value) in excess of 15%. That's a huge yield that typically attracts value investors. Goldman Sachs sees this stock rising from a recent $13.50 back to $17.
If you've switched cable providers recently or upgraded to a DVR, then chances are you got a new remote control made by
(UEIC - Get Report)
. Universal Electronics supplies more than half of all branded and generic remote control devices, including the ones you can buy at a local consumer electronics store that can be programmed to work with a wide range of TV sets and DVD players.
It's a steady-as-she-goes business, but quarterly results sometimes lag forecasts as sales of TV sets slump, or consumers hold off switching cable providers. Indeed, a first-quarter shortfall has sent this stock plunging 30% in the current quarter, and the stock is off by nearly half from levels seen a year ago.
That spells buying opportunity, according to research firm Dougherty. The first-quarter shortfall was largely due to customers working off inventories, and they still expect UEIC to boost sales and profits modestly this year, in a more robust fashion next year.
In 2013, sales are expected to rise roughly 5% to around $500 million, while EPS is expected to rise roughly 15% to around $1.85. Shares trade for just 7.5 times that forecast.
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