Q: This stock has risen significantly since May and I'm wondering why and is this a company that is worth considering as a medium term investment.
5i Research Answer:
NFI is a small, highly-cyclical company that ran into a debt crisis. Solvency was becoming a concern. But it managed to restructure some of its debt, and has now started to win significant new bus orders. Debt is still high, but maturities have been extended. Typically, 'back from the dead' companies tend to do well as survivability becomes less of a question. Recent earnings were good, the backlog is growing, and cash flow has improved. BUT..it is not cheap, and we are still not entirely comfortable here. We will give it credit for its turnaround, but would still consider it higher risk and not hugely attractive for most investors.