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Universal Security Instruments Inc. Message Board

  • mmmparsley mmmparsley Feb 15, 2007 12:37 AM Flag

    UPG...

    Looks like another fast growing company in the same sector.

    I'm going to keep my eye on it. Looks undervalued, lacking sexiness, and complete with a strong management team.

    Dave

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    • does not look too shabby...

      personally i would be a bit put off by the high debt level, D/E=2.7, interst coverage of just 4.6 and a mere 1.6& profit margin means that a slight downturn in the market and erosion of margins may be enough for the company to slide into the red and struggling with its debt...

      but hey, i am sure lots of stock rockets started out with lots of debt.

    • Dave, I ran a little comparison of your UPG with UUU and although there are a few things in common like low volume and shares outstanding and PE there are a lot of important differences. For instance the Profit margin of UPG is 1.58% while UUU's is 17.93
      Operating margin is 3.50 to 11.22%
      EBITDA(ttm) is 3.28M to 6.53M
      Current Ratio is only 1.14 to UUU's 4.8
      As Steinelg mentioned Total Debt is 11.6M to N/A. Maybe there is something we don't know that would cause some one to select UPG over UUU but we do know alot about UUU that gives it an edge. Like the undervalued Jt. Venture, the massive potential smoke alarm market in Asia, the Conduit investment, the move into the retail sales market and the tried and true distribution method that is the key to it all. Just my opinion. Jeris

      • 1 Reply to Jeris3
      • Dave, I will give you my example of a UUU type company . Relm Wireless Corporation (RWC). Just like UUU about 4 years ago they realized that their future was with the wireless communication they were making and they sold off or discontinued other areas of business. They restructured their sales and marketing organization...sound familiar? From 2003 to 2005 working capital increased from 5M to almost 19M. Total assets went from 12M to 31M. Long term debt was reduced to 0. Stockholders Equity went from 5.9 to 27.8M....so similar to UUU. Sales increased from 19.7M to 28.5M and cost of products went down from 61% to 48% of sales. Net income increased from 4.4% to 36% and all the while they were increasing funds for research and development and coming out with so many new products. UUU has 17 employees and RWC has only 83. Most all of their products are outsourced. This UUU sells for a little over $6 ... very close to the price of UPG. They have been benefitting from deferred tax asset contributions to their income statement. They have 2 years left of similar assistance then they will be used up. The company has products that are used by the USPostal Service, Fire-fighters, police, schools, businesses and corporations and the military, etc. ....where ever they need secure and dependable communication systems. Motorola has 70% of the business they have only 1.5% but they are increasing market share just like UUU. They have 14M shares. Their CEO Mr. Storey has a taped discussion on the company made in December and still listed with company news events if you're interested. See if you don't see the connection between these two companies. Check out my figures and do your own d/d. My opinion isn't enough. Jeris

    • RWC is similar to UUU in the sense that it is a turn-around company...like UUU saw the potential for conduit in its future RWC
      sees the digital wireless products as the new future and is focused
      on bringing out new products in that area. You asked about net income and the reason it dropped the 3Q was because RWC increased Eng./product expense by 40% (last count they had only 20 employees in this area but I assume it has added more) and marketing/Sales has increased 65% and these two add up to around 900,000. That's about .06 on last earnings of only .08 so you
      can see it is significant. Also, about 330,000 was non-cash employee compensation which did not happen in prior year. Go to their web site and you will find what you need. I tried to but couldn't get the Storey video maybe you can.....Nov. l5th, 2006.
      In about 2 or 3 weeks earnings will be out for the year which should include a hefty def. tax asset. By bet is that in two years when
      the def.tax asset is used up they will be in a lot stronger and have a bigger market share. Just like UUU they have quality products and extremely competitive prices. My opinion. Jeris

 
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