It is tempting to call XP Power undervalued. The maker of power converters is historically a good business serving a growing market that is going through a rough patch, which is exactly what value investors want.
Temptation soon turns to doubt, however. The wider market isn’t wrong to worry about further setbacks and no longer views XP as a quality business. A series of blunders has tarnished its reputation and a quick return to past glories can no longer be taken for granted. In this case, the punishment may be just.
A few years ago, investors would have jumped at the chance to buy XP for 11 times forecast earnings. Now they are understandably cautious.
XP, which has its headquarters in Singapore, makes components that
