Disclosures

Benchmark Electronics Inc.

Disclosure

  • B. Riley & Co., LLC does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
Disclosure Chart

Initiated Coverage on 07/14/2015 with a Buy Rating and Price Target of $25.00

Ratings Distribution as of May 23, 2017
Rating Number of Companies Percent of Total Number of Companies with
Investment Banking Relationships
Percent of Total
Buy 157 69.8% 21 9.3%
Neutral 67 29.8% 1 0.4%
Sell 1 0.4% 0 0.0%
Total 225 100% 22 9.8%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect "Buy" rated stocks to materially outperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly attractive.
  • Neutral: We generally believe "Neutral" rated stocks will perform roughly in line with the S&P 500 and Russell 2000 over the intermediate and long term.
  • Sell: We generally expect "Sell" rated stocks to materially underperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly unattractive.

Risks and Considerations

  • Acquisition/Integration - The Company actively evaluates potential acquisitions as part of its growth strategy. Acquisitions pursued by the Company could be dilutive to financial results and result in a difficult, dilutive or expensive integration.
  • Competition - The industry is highly competitive and many of the Company's competitors have greater resources.
  • Currency Exposure - Since the Company purchases its finished goods from foreign manufacturers and sell its products in transactions denominated in U.S dollars, a weakening of the U.S dollar could negatively impact the Company.
  • Economy - Macro-economic issues such as increasing oil and gas prices and a possible drop in consumer spending could have a negative impact on the Company's business.
  • Financial Results - Any slow down or other changes in the capital spending pattern of the industry may negatively affect the Company's sales.
  • Financial Results - The Company's business is affected by the general IT spending environment especially as customers delay purchases of IT equipment.
  • Financial Results - Unpredictable timing of customer orders.
  • Freight costs - Increases in freight costs caused by high gasoline prices or other factors could cause margin erosion or lost market share if the Company raises prices.
  • International Operations - The Company derives a significant portion of its revenues from outside the United States. The Company is subject to foreign exchange risk and the risks inherent in managing a global Company.
  • Inventory risk - Depending on market conditions, the Company's gross margins could come under pressure if market prices quickly fall within a three to five week time frame.
  • Labor - The Company has a large number of full-time employees and is party to several collective bargaining agreements that cover some of these employees. Additionally, the Company is facing rising labor costs.
  • Loss of Key Personnel - In our opinion, the current management team will be instrumental in executing the Company's growth strategy. The resignation of a key member of management would have a negative impact on the Company.
  • Manufacturer/Supplier Dependency - The Company relies on a few key manufacturers/suppliers. This lack of diversification could create interruptions in the Company's supply of products and a corresponding loss of revenues.
  • Natural Hazards - The Company's operations are located in an area prone to natural hazards. Damage to the area would impair the Company's ability to fill orders from customers and distributors.
  • Pricing Pressure - The Company's business could be affected by pricing pressure within the market.
  • Weather - The weather can significantly impact the Company's results.
  • General Industry - The Company could miss our estimates and/or their financial guidance.
  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.