Vishay (VSH) Stock | Long Term Analysis | Overvalued or Undervalued |
All right hello and welcome everybody today, we’re talking about Vishay but today we’re talking about vishay intertechnology ticker symbol vsh and this company is traded on the new york stock exchange in this video i want to talk about how this company generates its income i want to determine whether the stock is overvalued or undervalued or fair valued and i want to give a full long-term analysis on the business we will discuss intrinsic value book value and income price during stock buybacks demands and all sorts of important tankless when projecting the growth of a company and determining the true value of the stock anyway if you like this video please do like subscribe it’s about our channel and let’s get this content out to four people step where people understand how bishop works and also all the other stocks that we talk about work as well on our channel anyway thank you so much for watching without further ado let’s get started
so how does bsh work well bsh is a compliant manufacturer making components such as resistors transistors capacitors inductors and other key parts of a motherboard embedded system or other devices such as ssds this is very important as the growth of vishay intertechnology can be related to the growth of the usage in tech as companies such as honda vicker ao optrox and lg display build more devices fishy can offer better components to support those electronics they are pretty large in the field with a market cap of just under 3 billion dollars and have established a strong reputation for reliability over many years since they were founded in 1962. some of the patents i’d like to discuss would be their self-ration resistant patent as well as a technology patent enhancing the efficiency of antenna communication the celebration pen was brought to life in 2015 and the goal was to protect fishes technology for preventing silver sulphide buildup on their components this is helpful technology that enhances the company’s reliability and the other patent shows their growth not just the component sector but also in communications as well
now when we analyze an industry we are looking for growth and that’s why i see in the tech industry i thought i would know a few key technicals such as moore’s law and the growth of i.t spending within the government moore’s law states that the number of transistors per microchip are expected to double every two years leading to exponential growth for the usage of transistors now bishop is not well positioned in this industry however this shows how vishay could benefit from the long-term growth and usage of components i also want to note that the us is spending more on i.t and is expected to continue to spend more as they believe technology will become a larger part of our lives it’s important to note that this budget goes towards the manufacturing of devices and infrastructure both helping vichai’s case a few notable comparisons are diodes incorporated kyosura avx rom semiconductor and merida manufacturing each company competes more with vichai for different components for example diodes incorporated has great diodes and mosfets competing with fishes for those two primarily i also want to note that vichai must compete with overseas competition however cheaper alternatives to bachet can sometimes result in higher tolerances and print resistances for example this means that if i have two resistors one from fish a and the other was much cheaper bishoe would have a one percent tolerance so the actual resistance may be between 99 and 101 ohms versus for the cheaper component the tolerance may be more like 5 and as a result the actual resistance may be between 95 and 105 ohms certainly not reliable if you are trying to produce a large system that requires specific resistors or another component the point is is that a company will easily spend more money to buy a more reliable resistor to make sure that it doesn’t break or prevent the system from functioning as these differences in resistances can be a rather dramatic problem for these systems
fishes price to book appears to be much lower than competitors at about 1.7 whereas for diodes incorporated it is near four the lower the price to book the better and for the price earnings is the same case fishey has a low priced earnings in general around 10 and this compares well to competitors with diodes incorporated having a price stairings of 26 which is over double the shades once again lower is better
in terms of the intrinsic value the company seems to offer a significant upside of 33 after projecting the next 10 years of discounted cash flow from the past 10 years of cash flows with a perpetual growth rate of 2.5 percent and a discount rate of 8.5 the company has an intrinsic value of 27.36 relative to friday’s closing price of twenty dollars and sixty cents i also want to note that the company’s earnings as their free cash flow ebitda and the income appeared to be relatively steady and increasing due to the higher demanded component orders with kobe 19 the company has benefited and i don’t expect fish’s income to change dramatically over the next few years
fisher anti-technology does buy back its own stock reducing the outs in the shares of the company this benefits the shareholders as it increases the company’s shareholder value the book value increases and the intrinsic value increases as there are less outstanding shares in the market however this should only happen when the stock is believed to be undervalued because the money can otherwise be reinvested back into the company for research and innovation instead this also goes for dividends the company currently pays a dividend of 1.7 percent with a quarterly dividend of 10 cents per quarter so 40 cents per year this is great and their dividend has been increasing relatively each year this is great as their dividend has been increasing relatively each year as the company is trying to distribute some extra funds to the shareholders like i mentioned earlier the company should reinvest this money however they are clearly determining that this money is extra and can be distributed to the shareholders without harms of the business so overall what do we think about bishop bsh appears to be undervalued at the time of recording due to a relatively fair price earnings and a high intrinsic value to support the company’s current trading price over the long term we expect the earnings of bsh to grow with the tech industry as steady rate this company offers a relatively safe dividend and consistent stock buybacks that grow shareholder value over the long term now i want to be clear i am not a financial advisor or anything like that and this is absolutely not financial advice place your own research for investing anyway if you like this video and you want to see more content like this please do like and subscribe our channel and please comment down below and tell us what you think about this company and we’ll try to get back to you anyway thanks again for watching and have a great day everybody.