Since my last write-up on Gentex (GNTX) in August of 2021, operating conditions have gotten substantially more challenging, with semiconductor shortages not only having a bigger/longer-than-expected impact on light vehicle production, but supply chain cost inflation creating substantial margin pressures as well. Against that backdrop, I would argue that Gentex management is doing as well as they could reasonably be expected to do.
Gentex shares are down about 5% since my last update, underperforming many of the company’s peers, albeit not dramatically so. In that last article I was neutral on the stock, seeing high single-digit long-term potential but not finding the near-term outlook so compelling. My feelings are similar now, although the long-term potential is getting attractive, I think it may take a little while longer for the Street to warm up to the name.
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