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Nam Tai Electronics, Inc. Message Board

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  • hageneriksson hageneriksson Jan 19, 2013 5:50 PM Flag

    Thank you Mr. Market

    I like the company as they appear to be well managed and took in some great contracts over the last year. In fact the stock earned me a great amount of money in 2012. They are also offering investors a sizeable dividend which was just doubled recently.

    Short term I am very cautious on the outlook for NTE as the company has become to some extent dependent on Apple related revenues. The supplier order cuts in recent weeks are reality and not just an unfounded rumour as ALL financial analysts already significantly cut Apples earnings and revenue estimates starting from Q1 2013.

    The cannibalization of the IPad by the IPad Mini is no secret either and the IPhone is selling below expectations in most mature economies outside of the US - especially Western Europe and Asia are quite weak as Android based smartphones are further gaining market share. Germany (my country) is an extremely weak spot as subsidized phone contracts have been on the retreat for many years now. High end Android smartphones from the likes of the Samsung Galaxy S3 offer better specifications and much lower price points than the IPhone so without subsidization most people are simply not willing to pay a sizeable premium for a phone which ranks behind the Android competitors in most independent tests and reviews.

    We will learn more about this next Thursday when Apple reports - for myself I prepare for a really dismal outlook below the extremely conservative views investors are already used to.

    I firmly believe that NTE will be hurt by the Apple problems and revenues will be down significantly in Q1 and perhaps even in Q2.

    A weak Apple outlook would certainly hurt NTE shares again next week with any signs of weak order trends at NTE itself on their January, 28 conference call most likely sending shares even lower.

    At some point the dividend yield will stop the fall but this will be solely dependent on how bad things really are for the company.

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