Could Cash Machine Teleflex Stock Be Your Next Buy?

Teleflex (TFX) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With TFX

TFX may be down -9.9% so far this year but is now trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Teleflex is undergoing a strategic portfolio shift, selling its Acute Care, Interventional Urology, and OEM businesses for $2.03 billion. This creates a more focused “RemainCo” for vascular access, interventional, and surgical segments, which saw strong Q4 2024 growth in key areas like interventional (18.7%). Despite a preliminary 2025 revenue guidance cut due to slower intra-aortic balloon pump demand and OEM order delays, the completed Biotronik Vascular Intervention acquisition expanded its product offerings and global peripheral intervention presence.

TFX Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 5.4%, but Teleflex stock does
• Strong Margin: Last 12 month operating margin of 17.6%
• Growth: Last 12 revenue growth of 5.4% – low growth, but this selection is all about high yield and margin
• Valuation: TFX stock currently trading at 56% below 2Y high, 16% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of TFX fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While TFX stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. TFX fell about 46% in the Dot-Com crash, nearly 54% during the Global Financial Crisis, and slipped almost 59% in the recent inflation shock. The smaller pullbacks weren’t gentle either — dropping 20% in 2018 and over 42% at the start of the Covid pandemic. It shows that even with strong fundamentals, TFX isn’t immune when the market turns sour. Risk is still very real. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read TFX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell TFX Stock.

Stocks Like TFX

Not ready to act on TFX? Consider these alternatives:

1. General Mills (GIS)
2. Brown-Forman (BF-B)
3. Vail Resorts (MTN)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

A Multi Asset Portfolio Gives You Safer Smarter Growth

Stocks soar and sink but bonds commodities and other assets balance the ride. A multi asset portfolio keeps returns steadier and reduces single market risk.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices