Over the last six months, Bel Fuse’s shares have sunk to $82.62, producing a disappointing 11% loss while the S&P 500 was flat. This might have investors contemplating their next move.
Is now the time to buy Bel Fuse, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Bel Fuse Not Exciting?
Even though the stock has become cheaper, we don't have much confidence in Bel Fuse. Here are two reasons why you should be careful with BELFA and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Bel Fuse’s 3.5% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the industrials sector. 
2. EPS Took a Dip Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Sadly for Bel Fuse, its EPS declined by more than its revenue over the last two years, dropping 16.9%. This tells us the company struggled to adjust to shrinking demand.
Final Judgment
Bel Fuse isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 8.8× forward EV-to-EBITDA (or $82.62 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better investments elsewhere. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.
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