Nidec: Accounting Irregularities And Weaker EV Profits Decimate The Investment Case
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Stephen Simpson20.56K FollowersFollow5ShareSavePlay(9min)CommentsSummaryNidec has launched an investigation into potential accounting irregularities and suspended the dividend and buybacks until the investigation is complete.Profitability and margin challenges in the EV motor and inverter businesses have led to large writedowns, impairments, and near-zero auto segment margins.Valuation appears deeply discounted, with DCF and EV/EBITDA suggesting 50%+ upside, but reliability of financials and execution remain highly questionable.Only highly risk-tolerant, speculative investors should consider NJDCY, given unresolved accounting issues and an uncertain path to sustainable profitability. John Webb/iStock via Getty Images There were already some concerns growing around Nidec (NJDCY) (NNDNF) (6594.T) over the last year or two, with analysts and investors questioning the profitability (and long-term margin potential) of the EV motor and inverter businesses, theThis article was written byStephen Simpson20.56K FollowersFollowStephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.