This company is currently trading under 5x EBITDA. At 7x, which is probably a conservative valuation, the price would be $19 per share. In addition, this company is a perfect acquisition target for a large provider/manufacturer. In the meantime, enjoy the growth and quarterly dividends. What other company out there grew revenue by 90% and EBITDA by 1200% and pays dividends? If anyone out there knows of one, please let me know!!!
If you seriously want a stock, see HIMX. They are a Taiwan company with offices around the world but trade on the NASDAQ. They report on 7-Feb and are expected to do around $0.065 to $0.08 for the 4Q which wil give them around $0.29/share for FY 2013. They are trading just under $3/share so the P/E is very low and they trade near book value. They are also growing well.
They do pay around 50% of their profits in an annual July dividend so that could be around $0.15/share for a $3 stock and thus 5%.
Go to their website (Yahoo Finance Profile page has the address) and download their latest presentation from January. It is very enlightening and worth a some shares.
I just found NTE and am doing my due diligence. At present (very early yet), I see HIMX as having better margins but similarily underpriced.
But, HIMX may have the technology to hurt the business of NTE as they are involved in micro displays and projection displays for smartphones. Think how an eyeglass viewer could do away with screens and thus shrink phones to a wristwatch size. Want to show someone something on the internet or your phone? Use the micro projector and beam it on the wall. This is all very early but something Apple should do to WOW their customers. But, HIMX is also a boring IC comany who is at the high end where margins are better.
As we talked about in the fall when this was trading around 7 or 8 bucks, I will happily continue to drip the dividends as we wait for another leg up. If it dips, feel free to add more. It may be a bad analogy, but 10-15 years ago, the cigarette stocks were held down by constant fear of litigation -- this feels like it is held back by virtue of being a Chinese stock.
It is not a bad analogy. My largest holding was/is Phillip Morris. In 1994, the Florida Engles lawsuit verdict sent the stock into a nose dive. It bottomed around $18/share. It was scary to hold on as lawsuits were flying fast and furious over the next 6 years or so. However, some investors recognized that the company had a history of prevailing in the appeals courts and that the business fundamentals were sound . The courage to hold on paid off.
The company became Altria which later spun off Kraft and Phillip Morris. My shares were worth $54,000 at the nadir. Today the shares are worth over $380,000 and that excludes the very generous dividends paid.
I have the same feeling about NTE today. Value investing is not for squeamish. When NTE sank to $4/share and I was continuing to buy, part of me was thinking that I was catching a falling knife. I kept telling myself the potential reward is far greater than the risk. I believed that then,and I believe that now.