In the ever-evolving world of technology, companies like Benchmark Electronics Inc. are continuously striving to provide exceptional electronic manufacturing services while remaining competitive in the market. However, recent news suggests that Franklin Resources Inc., a well-known investment management company, has reduced its stake in Benchmark Electronics by 14.7% during the fourth quarter of the fiscal year 2023. As per its most recent 13F filing with the Securities and Exchange Commission, Franklin Resources’ stake in Benchmark Electronics now amounts to roughly 3,085,620 shares worth $82,355,000.
Benchmark Electronics provides engineering and design services, precision machining services and integrated electronic manufacturing services to original equipment manufacturers of industrial control telecommunication equipment, computers and other related products for several business enterprises such as medical devices and testing/instrumentation products. With operations spanning across Americas, Asia and Europe; it is a pioneer within these regions with immense growth opportunities within these areas.
NYSE:BHE opened at $23.37 on Friday with a market cap of $8321 million which leaves considerable space for expansion into new areas. The beta of the firm stands at 1.05 indicating its volatility has been almost similar as compared to S&P500 over a period of four months between December’22 and April’23.
Despite having a P/E ratio of only 11.86 which suggests that it might be undervalued in comparison to larger players like Apple or Microsoft given their P/E ratios around 30; even though they are both fundamentally different from Benchmark due to being cash cows resting upon consumer demand whereas Benchmarks focuses on supply chain solutions specifically as an OEM contractor which makes them highly cyclical upon customer demand.
Furthermore, investing funds in stocks can entail certain risks pertaining to various factors including capital loss risk due to diverse reasons such as general market conditions or industry risks or corporate governance issues but for large-scale investors who diversify their investments can also spread their risk against such loss. One can only hope that Franklin Resources has sold its shares for the right reasons, and will not regret its decision later on. Regardless, it presents a valuable opportunity for potential investors to purchase Benchmark Electronics’ stock at a slightly lower price point.
Institutional Investors Increase Holdings in Benchmark Electronics as Company Reports Mixed Earnings Results
Investment in Benchmark Electronics has been on the rise recently, with a number of institutional investors and hedge funds modifying their holdings in the technology company. HRT Financial LP grew its holdings by 149.5% during the fourth quarter, Brandywine Global Investment Management LLC increased its holdings by 5.3%, Dimensional Fund Advisors LP raised its position by 1.3%, Nicola Wealth Management LTD increased their stake by 37.2% and UBS Group AG grew their holdings by 76.7%. In total, institutional investors own 93.41% of the stock.
Several equity analysts have recently weighed in on Benchmark Electronics, with stockNews.com assigning a “hold” rating on the stock, and Needham & Company LLC providing a “buy” rating, but lowering their target price from $35 to $34.
Benchmark Electronics specializes in providing integrated electronic manufacturing services, engineering and design services, and precision machining services to original equipment manufacturers for various industries including industrial control telecommunications equipment, computers and medical devices.
On May 3rd of this year, Benchmark Electronics announced earnings data revealing that the technology company reported a $0.42 EPS for the quarter; however, it also had a net margin of just 2.36% and return on equity was just 7.31%. The business had revenue of $694.70 million for the quarter compared to an estimate of $660 million; revenue increased over last year’s results by 9.2%.
The company declared a quarterly dividend which was paid out on April 13th; shareholders received a dividend payment of $0.165 if they were recorded as shareholders of record prior to March 31st. This represents an annualized dividend payout ratio of approximately 33.50%, with an overall yield of approximately 2.82%.
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