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Universal Security Instruments Inc. Message Board

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  • Jeris3 Jeris3 Feb 17, 2007 2:30 PM Flag


    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

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    • 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 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

      • 1 Reply to Jeris3
      • Jeris3, thanks for the tip.

        If you have followed the company, could you elaborate a little on UPGs income decrease? I see that the companys sales are growing at a healty rate, while income decreased, e.g. there seems to be an erosion of margins in UPG. This might not be so bad if this erosion in margins is due to capital investments or other one-time expenses. If UPG can generate income growth from their sales growth, it will be a bargain at PE=7.8.

        Any thoughts?

3.60Jun 29 11:37 AMEDT