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J. C. Penney Company, Inc. Message Board

  • netmargintrumps netmargintrumps Mar 6, 2013 12:09 PM Flag

    SMDM is Undervalued with a .21 P/S ratio and a P/E of 2.6

    The Singing Machine (SMDM) has moved back to profitability and is growing revenues (top line) and profits (bottom line). However, the stock price doesn’t reflect it yet. It has a market cap of only $7MM, but earned $1.4MM in profit last quarter alone. Net sales increased 90% year-over-year to $16.7MM for this quarter thanks to a strong Christmas. The company has over $3MM in cash with no debt, which is more than 7 cents per share. The company trades at 20 cents per share, and its trailing earnings are 5 cents over the last four quarters. Backing out the cash, this company is trading at 2.6 times trailing earnings (20-7)/5=2.6. Over the last 12 months SMDM has had $34.1MM in revenues, meaning the company is trading at 20.5% of revenues( 7/34.1=.205).

    Management said that they expect these impressive numbers to continue, as the company has added another big-box retailer to its distributors, as well as a 65% increase in sales off of its website. At 20 cents per share, this company is way undervalued. It is priced for no growth at all, but it is growing revenues, profits, and margins.

    Don’t take my word for it; check out SMDM. Look through their financials and check out their product's website yourself.

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