TECNOGLASS INC (NYSE:TGLS) – A Quality Stock with Strong Fundamentals

TECNOGLASS INC (NYSE:TGLS) stands out as a potential candidate for quality investors, meeting key criteria for profitability, financial health, and growth. The company, a manufacturer of architectural glass and aluminum products, has demonstrated consistent performance and efficient capital allocation.

Key Strengths

• High Return on Invested Capital (ROIC): TGLS has an ROIC (excluding cash and goodwill) of 28.03%, well above the 15% threshold for quality investments. This indicates efficient use of capital to generate profits.
• Strong EBIT Growth: The company’s 5-year EBIT growth stands at 31.02%, reflecting improving operational efficiency and pricing power.
• Healthy Debt Management: With a Debt-to-Free Cash Flow ratio of 1.30, TGLS can repay its debt in just over a year using current cash flows, signaling financial stability.
• Profit Quality: A 5-year average Profit Quality of 90.99% shows that net income is consistently converted into free cash flow, a sign of reliable earnings.

Fundamental Analysis Summary

TGLS scores 7 out of 10 in our fundamental rating, with particularly strong marks in profitability (9/10) and financial health (8/10). The company outperforms most peers in margins, ROIC, and solvency. While its valuation appears slightly expensive, this is partly justified by strong growth expectations.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.