TFX, Teleflex

Will it survive?

• Can it pay its interest? 1.2×
  Thin
  Operating income $118M ÷ interest expense $100M
  What this means

  Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.

• How heavy is the debt, net of cash? $2.3B · 19.1× operating profit
  Heavy net debt
  Cash $379M − debt $2.6B
  What this means

  Netting $379M of cash and short-term investments against $2.6B of debt leaves $2.3B owed, about 19.1× a year's operating profit (22.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? 178d
  Long (60+ days)
  DSO 63 + DIO 169 − DPO 55 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

• Return on invested capital 7%
  Below average through the cycle
  9-yr median, range 2%–12%; the latest year is left out — large non-operating charges put its operating line well above pretax profit
  Industry peers: median 4%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years, so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 13%
  Solid through the cycle
  10-yr median margin, range 0%–21%; latest $1M = operating cash $97M − maintenance capex $95M
  Industry peers: median 5%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 0% of revenue this year, a 13% median across 10 years. Treating stock comp as the real expense it is (less $26M of SBC) leaves ($24M).

• Are earnings backed by cash? $97M
  Loss, but cash-generative
  Net income ($906M) · cash from operations $97M
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

• Where do the earnings go? 24915%
  Returned more than it generated
  Dividends + buybacks $360M ÷ Owner Earnings $1M
  What this means

  The company returned more than it generated: against $1M of Owner Earnings, $360M (24915%) went back to shareholders, $60M dividends, $300M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $26M stock comp, the real buyback was about $274M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.

• Investing or harvesting? 0.54×
  Harvesting
  Capex $95M ÷ depreciation $178M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size Near
  Revenue ≥ $2B · $2.0B
  What this means

  Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

• Strong liquidity Pass
  Current ratio ≥ 2× · 2.54×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt Miss
  Debt ≤ working capital · $2.6B vs $1.2B WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Earnings stability Near
  A profit every year (10-yr record) · 1 loss year
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Pass
  Uninterrupted dividends · paid every year (10)
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth Miss
  Earnings +33% over the record · −181%
  What this means

  At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-3.61/share (latest year $-20.46), the averaged base the calculator's gate runs on, and book value is $70.58/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 9 of 10
  What this means

  Lost money in 1 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 0 of 10 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 16% → 9% (3-yr avg ends)

  In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

  What this means

  Through the cycle the operating margin slipped — about 16% early to 9% lately, median 16% — competition or costs are biting in.

• Reinvestment, incremental ROIC −6%
  What this means

  Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.

• Owner earnings growth −13%/yr
  What this means

  Owner earnings shrank about 13% a year over the record.

• Worst year 2025 · 5.9% op. margin
  What this means

  Stayed profitable even in its hardest year, the resilience that survives recessions.

• Share count −0.7%/yr
  What this means

  The share count is shrinking, buybacks are quietly growing your slice of the business.

• Dividend record paid
  What this means

  Paid a dividend in 10 of the years on record.