The company has been around a long time and we would consider management decent. It is a cyclical industry, and they have managed cycles fairly well. Insiders own 13.4%, Oakwest owns 20.1%. The stock has more than doubled in a year. Valuation is reasonable. (not cheap for the industry) at 18X earnings. There is some leverage, including lease obligations (2X cash flow) but net debt is decreasing. FTG lost money in 2021 and broke even in 2022. 17% growth is forecast for 2025. The 3Q showed revenue growth of 18% but bookings growth of 29%. Net earnings more than doubled. Aerospace and defence demand remains high. Gross margin rose 3 points to 27%. It is hard to say they have a moat, as the circuit board industry is fairly standard. But customer retention and growth imply it knows its business. Cyclicality and size are the main risks here. Investors are excited by AI, but it is really a hardware business here. We would be comfortable holding it though for small cap investors.
5i Research Answer: