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НТЕ Message Board

  • rnighty_bigfoot rnighty_bigfoot Sep 1, 2006 8:47 PM Flag

    Opinions please?????


    The link below is from price calculator. I put in a 5% growth rate for the next 5 years (which is very low, the company isn't even predicting this low of a growth rate). I also changed the perpetual growth rate from 2.0 down to 1.50 (which again is low) and it still says NTE is worth over 16 a share.

    Does anyone agree with this assesment? Does this mean the last months sell off is a bit overdone?

    I welcome any comments. Bought at end of day 11.37. I just don't see the price hanging this low for a very long time. There's too much opinion.

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    • There are 3 reasons why you should discount 50% of the price from DCF valuation:

      1. Management has not been truthful (not conservative). No way they did not know this is coming and shoud have disclosed when they announced thier reduction in dividend. My guess is that they wanted to spread the bad news.
      2. It is going to get tougher with margins as well as revenue.If you look at other EMS provider e.g. Flextronics, Jabil, etc...their margin and growth numbers are horrible.
      3. If this is under value, why there is no buybacks or insider buying? I will wait for this indicator before moving in.

      I have been sitting on the sideline for awhile to let all of this play out. It is not over yet. if you want a better value play (i'm self-proclaim value investor), try JLG.

    • It's undervalued based on trailing #s, but the only thing that will matter are future #s.

      Right now, they expect to make 22-25 cents this quarter on flat revenue. If this quarter is the only hiccup and they return to some semblance of growth (or at a miminum stop the bleeding), then the stock will trade higher. If not, then it won't.

      Did that ^ say enough of nothing to satisfy ya?

      The dividend and the cash on books might be the best reason to buy the stock now. Factoring out the cash, NTE trades for about 6 dollars per share. Plus I think it's anti-dollar denominated cash.

      My personal guess for the stock is that it will trend lower for the rest of the year until the fundamentals for next year become more clear. Maybe a low of 9 1/2 to 10 (factoring out dividends) as tax loss selling commences. I think we will also see 12.5 before year end too. Basically, range bound.