Right now the icing is worth 3 times the cake, so lets not overlook it. Also, the icing doesn't rely on margins, apples smart phone share, or other things that can fluctuate in a matter of a few months. The only thing that can affect the icing, is a crash in china, and that isn't that likely, and even if it did, the icing would still be worth a lot.
The icing is important because it gives you a massive floor on the stock. A floor that is probably actually higher than the stock price is right now. Becasue of that, you can bet huge on the stock and still sleep at night. And the cake (NTE operations) will most likely kick in and make the share price go much higher than just the icing. Becasue daddy needs a new SL 65 AMG. It's all risk/reward, and this is about as good as I have seen in awhile.
I communicated with investor relations yesterday regarding the land value. I was told that NTE has not fixed a specific value and that their value analysis is not complete. They did say,however, that they believe the value to be "substantial".
Well, they practically quadrupled their sales in the fourth quarter from the year ago period, and are adding 13.3" ultrabook LCMs this spring, so I think you can have both cake and icing.
As far as diversity of customers, that's a bit tougher. For small/medium LCMs there's Japan, Korea, Taiwan, and China. There's Japan Display and Sharp in Japan...very high technology, top of the line. In Korea there's Samsung and LG...they do their own LCMs, and while high quality, they don't have the low power innovations Japan does, though a bit lower cost than Japan. Also, Samsung is concentrating on AMOLED more now. Taiwan has AU Optronics and Innolux, decent quality and resolution, but behind Japan and Korea, and they do their own work. Finally there's China, with various low cost providers but low tech and the margins really wouldn't be there to make it worth Nam Tai's time.
Nam Tai used to do lots of other electronic things including bluetooth headsets, calculators, electronic language teaching aids, etc. They could still do those, but the volume was nothing compared to the LCM business they are in now. They could do something like camera modules for phones and digital cameras, and have done that in the past. It's high volume, but there's significant competition. Anyway, the way to get more diversity would be to try and enter another area of electronics, but right now they just don't have the factory floor space to do that in a big way and the LCM business is treating them very well.
My mistake. I sold Cirrus today because of concerns that Apple was seventy percent of sales. I took that money and bought more NTE. I felt there was more upside with NTE and the dividend is an added bonus. I appreciate your comments.