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  • teamonfuego teamonfuego Oct 8, 2013 2:41 PM Flag

    Dividend Yield Now 4%

    This upcoming quarter they're expecting to do 5.88% sequential growth which equates to roughly 25% annual growth. They have actually managed to keep their overhead costs in check as they have grown slower than revenues.

    So if I assume 25% top line with 20% expense growth, I get $82.9 MM Revenues.
    Using same margins as last year I get $53.9 Gross Profit.
    Expenses were $34.5 MM so a 20% bump up makes them $41.4 MM next year.
    That equates to $12.5 MM operating income.
    They have a huge cash balance that they earn interest income on. Last year they had $79.9 MM cash at 12/31/12. They paid about a $7.8 MM dividend in June and as of 6/30/13 they had a $83.3 MM cash balance. That's a cash boost of about $11 MM in the first 2 quarters excluding the dividend. That's a little high but they should do about $14 MM in 2013. Anyway, Int Inc last year was $2.6 MM. I'm assuming another $2.8 MM. Tax rate was around 14%.

    $12.5 MM Op Inc
    +$2.8 MM Int Inc
    =$15.3 MM Net Income
    After tax (14%)
    =$13.13 MM
    Shares = 29.9 MM
    EPS = $0.44

    They pay 60% of income out as a dividend. That's $0.26. Based on a price of $6.44 that equates to a 4.1% dividend.

    So you get a 4% yield, 25%+ growth, and the company has $2.90 a share in cash. Kind of like low hanging fruit, no? Anyone else see something I'm missing?

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6.90+0.02(+0.29%)11:39 AMEST