I know I will get flak for this, but I took a look at this one and several red flags went up.
1. This company is not reporting properly to the SEC. I can not find any of it's required filings anywhere. This being the case, the NASDAQ can delist them at any time and stick them on the OTC BB where it seems that they belong. Aside from that, it is really unprofessional.
2. Questionable insider buying. The lack of required filings also indicates that there is no way to check and see if insiders are actually buying. They are not doing the proper documentation. In a deeds not words world this means as far as I can tell they are talking out their asses. It also means they could just as easily be dumping this stock and no one would know because they are not doing the proper filings. The fact that these guys announced in a press release that they were buying instead of just doing the proper paper work is also suspect, and leads one to believe that they were trying to hype the stock.
3. CNBC hype. Someone is just trying to get out of a bad position. Whoever said anything on CNBC about this stock just wanted out. The aftermath of CNBC hype on a backwater company is always PAIN.
4. The stock is foreign. Good luck trying to collect on damages if some real discrepencies start to crop up, or even doing any real DD.
5. There is no interest in this stock at all. It has one analyst covering it with a hold and only a 10% institutional interest. No one will ever be interested in this stock either because there is no real information out on it.
6. Questionable dividends. If this company was planning to pay dividends it would have just done it. The delay involved is just another red flag.
7. Poor technicals. This stock has never done anything but go down. Every move up is met with someone dumping all over it. This is not a good situation. If the MM's are intent on killing this stock it will never go anywhere.
That is my .02. I was as fair as I could be in looking at this stock. I actually intended to buy it at first. But, there are just too many red flags and questionable practices taking place. Possibly in your own mind you can find fault with a few of my points, but they all seem fair to me. I'd sell and wait for this company to at least start making the proper filings with the SEC.
Bottom line: Your insticts are true. Counter-terrorism is like a fire and there's only one animal in the animal kingdom that has the instinct to go out of its way to put out a fire. It ain't a human. Ask yourself this question: At what point has the stock had a bad enough beating for us to feel better about putting our money on it? Instinctively the answer is 'never' but greed tells me its time to buy this puppy.
Is the stock down because of the lack of SEC filings or are investors only now taking that into consideration? I see it as an opportunity. BTW, there are BB stocks that go for $40/share so delisting isn't the death penalty.
I don't recall any CNBC hype, though Magal WAS the number one defense issue percentage gainer during the Desert Fox attack of Iraq, as reported in the Dow Wire. We have our MexicoJoe hype from time to time but since October, we've been finding real price support reminiscent of early 1996.
It HAS paid dividends as little as three years ago ($1.05, in December 1995). If you want to base dividends on earnings, why not wait until the traditionally big 4thQ is over? (at least in the prior two years) Our analyst is projecting $.10 for the 4Q.
Accountants are responsible for doing the books. Magal brings in outside accountants just like everyone else. While this doesn't assure a perfect 10Q or 10K, it does mean that they're looking at the financials with their own reputation on the line.
Magal is expanding rapidly vis a vis purchasing other companies. It isn't an easily understood business. If it was easy creating a fictitious company with a PE < 10, why isn't everyone doing it? Maybe that's one you can answer.
I've seen this kind of thing before. A lot of people ARE doing it. It's always a foreign stock. It is always priced to good to be true. There are always a lot of promises being made. There is never any evidence of any follow through on the promises.
I don't want to be put in the position of being the board asshole who throws cold water on everyones party. I'm not going to argue a negative position non-stop. My last posting speaks for itself. This company is doing nothing through the proper channels or using the proper procedures. Either that makes perfect sense to you as a reason to get out quick or it doesn't.
If the company were to start reporting it's activities in the proper fashion with the SEC and becoming more transparent I would likely be a buyer myself. But, I'm not touching this company with a ten foot pole until it does. I want to see proof of insider buying, mergers, and quarterlies reported according to SEC standards. There is absolutely no excuse for the company not to follow the rules if it is legit. And, if they make an excuse for not reporting properly, you better really start running.