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Nam Tai Electronics, Inc. Message Board

  • artistryonline artistryonline Sep 18, 2003 11:40 AM Flag

    How much debt is being taken on

    in relation to the new factory. Cash will be flowing only one way for a while and thats out. Add that to a very overheated stock and realistically the only way the stock price is going is downwards and when that happens it will happen quickly. I suggest that everyone consider taking some profits now.


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    • Good questions but I'm not worried too much. In 2002, NTE generated ~$30M in cash flow. They have a current ratio over 2.5 and LTD was listed at 2.8M (excluding the current portion of the LTD.) Don't forget the accelerating trend to outsource. Nam Tai feeds that frenzy. They managed to grow while their industry shrank. I'm not worried.


    • NTE has less than 2% debt to capital. It has sufficient cash to pay out of pocket for the factory. Nonetheless the street will normalize the expidenture for the new state of the art factory and build in the projected revenue from it and carve out a new forwarded looking PE which will portray NTE favorably. Although there is only one analyst covering NTE currently don't think for a minute that other underwriters don't have NTE on their screens. NTE is in great position to raise cash if needed. Your suggestion that everyone take profits now is not timely. Most likely you're another short who's feeling the pain of NTE's breakout this week. The better advice would be for you to cover your losses and move on to more fertile ground. You have a chance to get out now before your lossess mount. I know its bitter medicine but you'll feel better later on. Take it while you can. Get out now.

    • Just sold 2350 shares, but will buy again definitely on a pull back.

      Good luck LONGS

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