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 such as profitability, financial health, and consistent growth. The company, which specializes in architectural glass and aluminum products for construction, has demonstrated strong operational performance and efficient capital allocation.

Key Strengths

• High Profitability: TGLS has an impressive Return on Invested Capital (ROIC) of 28.03%, well above the 15% threshold for quality stocks. This indicates efficient use of capital to generate profits.
• Strong Margins: The company maintains a robust operating margin of 26.67%, outperforming all peers in its industry. Its gross margin of 43.79% also ranks among the top.
• Healthy Debt Management: With a Debt-to-Free Cash Flow ratio of 1.30, TGLS could repay its debt in just over a year using current cash flows—a sign of financial stability.
• Consistent Growth: Revenue has grown at a 5-year CAGR of 7.23%, while EBIT growth has been even stronger at 31.02%, reflecting improving profitability.
• High Profit Quality: Over the past five years, 90.99% of net income has been converted into free cash flow, indicating reliable earnings.

Valuation Considerations

While TGLS scores well on profitability and financial health, its valuation appears slightly elevated with a P/E ratio of 21.92. However, its strong growth prospects and high margins may justify the premium.

Our Caviar Cruise screener lists more quality stocks with similar characteristics. For a deeper analysis, review the full fundamental report on TGLS.

Disclaimer

This is not investing advice. The observations are based on data available at the time of writing. Always conduct your own research before making investment decisions.