I'm in today.
Here is why:
I'm estimating profit margin for -07 to be a pathetic 4%. Historically it's from 15-20%
I'm est growth at only 6%.
Est 2007 outstanding shares (guessing no buyback) at 56MM
This gives an EPS of $0.40. This would value the company at $10.
Add on the ~$7 in cash, and the company is worth $17.
Another way to look at it (not my calc's but still very valid)
The lowest analyst estimate for 07 is $0.63
you multiply that by the going p/e for the sector
and you get 26. Cut that in 1/2 just to be conservative and you get 13.
13 X 0.63 = $8.19
add on the $7 in cash ...
you got $15 a share
If you're not conservative and give it the whole p/e of 26, you have $23 a share (again with a eps of 60 cents!)
You throw on the 30% short ratio ... and well it looks pretty clear.
Sure there's going to be some problems with the megapixel vs VGA mix going forward which will kill the profit margin ... but that's already factored in!!!
If you have other EPS estimates profit margin estimates, sales projections for '07 ... I'd love to see your analysis
one very important factor you have failed to take into account...
HONG - is Taiwanese and they are the most un-trustworthy business people -
He is far more interested in Saving Face - then being honest to the shareholders...
My analysis is simple. The company has about 54.8m shares outstanding. There are about 22.5m shares shorted. What this mean is, there are currently 77.3m shares sold to the market (54.8 + 22.5). At the current stock price 11.33, the market is giving OVTI the market cap of about $876 million (77.3 * 11.33). I'm not saying 876 is a fair value, all I'm saying is the market is giving OVTI that value.
If you look at the market cap for OVTI at yahoo, it's $621 million and the enterprise value is $266 million. http://finance.yahoo.com/q/ks?s=OVTI
If you just look at the numbers alone, I think OVTI is a good buy at a discount.