SMDM Grew Revenue 90% Last Qtr and the Stock Barely Popped
SMDM (The Singing Machine), grew net sales 90% versus the same quarter last year from $8.7mil to $16.7mil, and earnings grew to $1.4mil vs. $150K the previous year's same quarter. Now the trailing P/E ratio is below 3 if you back out their pile of cash. The small company has NO debt, too. Over the last 3 years, annual revenues have grown from $19.1mil in 2010 to $25.9mil in 2011 to $34.1mil in 2012. With this kind of growth, this company does not deserve a low-single-digit P/E ratio and a P/S ratio of .25. This stock is way undervalued.
This rapid growth is three-fold: First, their products have been added to more big-box stores causing top-line revenue to grow by 90%. Second, year-over-year increase in e-commerce sales straight from their website is up by 60% to 65,000 units. Third, the growth in the economy is adding to sales volume, especially during the Christmas season.
The stock finally popped like it desrved to, but it has trended back down over the last 6 weeks. Here's another chance to buy a stock with 90% revenue growth year-over-year at just 5 times trailing earnings, and .25 times trailing revenue!