Luxfer Holdings PLC (LXFR) has seen solid outcomes in its two quarters as a public company, with 20%-plus return on capital and solid growth opportunities in cylinders and industrial catalyst applications, says Mark L. Parr, Managing Director and Equity Research Analyst at KeyBanc Capital Markets Inc.
“This is kind of an unusual story. It’s a complex story, but I would say, just to summarize very simply, we think the valuation on this company — which is somewhat less than five times the enterprise value to EBITDA — is way out of whack with the company’s 20%-plus return on capital and well above average growth prospects,” Parr said.
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Parr says that though LXFR has had only two quarters in the books since they’ve been public, each quarter has seen solid outcomes. Additionally, the company has solid growth opportunities on the horizon in 2013 and 2014, Parr says.
“With some of the growth opportunities, in particular being cylinders for alternative energy for mobile applications, in terms of trucks and buses and cars, and also industrial catalyst applications that have a clear environmental solution and also a very good payback associated with them,” Parr said.
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