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Universal Security Instruments Inc. Message Board

  • mmmparsley mmmparsley Aug 16, 2007 9:30 PM Flag

    The Milkman, The Paperboy, The Evening TV...

    Whatever happened to predictibility... Ba da bada bah bah da!

    Remember that Full House Theme? I love it.

    Now, onto UUU.

    What happened to the JV? Earnings will come back in the next year, and will show the current price to be WAY undervalued. But still, the JV was growing like crazy, and over the last 2 quarters the profits have been halved? There was no reason given outside of a slowdown in European orders for the earnings slip.

    Anybody care to shed some light on the subject for me?

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    • I was a little disappointed as well, but I do remember about a year ago when the JV sales took a big jump because of improved sales from Europe, so I guess it can go both ways.

      On the plus side, it's good to see revenue growth via the Home Depot channel. These revs have more than offset lower revs from the existing electrical distribution market although it's a lower margin business. The decision to get into retail again appears to have been a good decision by management which gives me confidence in them.

      I think the conduit business has the potential to be very good as well if they can leverage their existing distribution channels. I also hope they can increase their exposure to the Canadian economy which I am bullish on. If high energy and commodity prices persist, this should be good for Canadian economic growth.

      The one area that I am concerned about is UUU's cash flow situation. Operating cash flow has been negative the last few quarters...obviously due to increasing inventories in association with the HD sales and carrying the conduit business the last two quarters. But I'd feel much better if we could get some cash flowing through to the bottom line.

      • 1 Reply to betan2
      • Betan, Do you agree that in 12-18 months time, UUU is going to look really cheap here at 22. UUU should add at least 300K onto last q's earnings or more resulting from the large Canadian loss going positive as was mentioned in the last quarterly report.

        I'm going to bet that the likelihood of UUU's management turning their recent synergies into higher net profits than fiscal 07 is pretty high. I'm in at 23.00 again, and staying long.

        I think 40 is well within reach in the next 12 months.

3.23+0.15(+4.87%)Sep 23 1:29 PMEDT