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Nam Tai Electronics, Inc. Message Board

confluence12003 6 posts  |  Last Activity: Nov 19, 2014 1:22 PM Member since: Feb 17, 2003
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  • Reply to

    New to the stock market

    by rowleyca77 Nov 19, 2014 11:35 AM
    confluence12003 confluence12003 Nov 19, 2014 1:22 PM Flag

    Number one rule of investing in individual stocks: make your initial investment small, very small. and build up a cushion relating to your cost basis. It allows one to hold on when stock does some gyrations like this stock is capable of doing, Allows more time to become comfortable with the company and stock behavior.

    Maybe use this company for a template. I like that revenue is increasing at a good clip AND income is increasing at an even faster rate--they got some leverage somewhere. Pay attention to cash flow, both net operating and free cash flow. Again these metrics are increasing at a faster rate than revenue.

    Look at ROE, but understand it can be skewed by a high debt load. This company has good ROE even with a large amount of cash and no debt. Return on invested capital is more difficult to pin down, but the company noted in the conference call that ROIC is 25%.

    But, the overarching thing to remember: don't overly fall in love with any stock because they are capable of disappointing.

    One last thing, periodically pick up issues of Investors Business Daily and get a feeling of chart behavior relating to accumulation/distribution and basing patterns like cup and handle. Forget their dogmatic doctrines.

  • confluence12003 by confluence12003 Nov 14, 2014 11:06 AM Flag

    I actually don't come down hard on investors that are disgruntled about the price action, especially when one incorporates the recent 10% one-day drop after reporting stellar earnings. Someone is capable of exerting an undue amount of influence over this stock. However, right now the overall market seems to be looking for some catalyst to go higher, and there has been so much damage to this stock that it has to undergo a period of mending.

    Please don't accuse me of being impatient. I've been investing in individual stocks for almost 15 years and am no stranger to waiting for companies to reach full valuation. That said, I think this is one of the soundest companies I've ever owned. Still looking for some flaw. Most likely, the biggest bogeyman out there is some external event dealing with some customers--the recent overblown chip scare comes to mind. Then again, the customer base and products are so evenly distributed. Hmmm, just so hard to find flaws.

  • confluence12003 confluence12003 Nov 12, 2014 11:04 AM Flag

    Yahoo has the current account ratio at 4.8. They can buy shares til it gets to a more standard 2-3.

  • confluence12003 by confluence12003 Nov 11, 2014 1:20 PM Flag

    Seems like a lot of investors are using nonGAAP estimated 2015 earnings of 4.44 /share and getting valuations of 100/shr. This 4.44 fiigure excludes stock based compensation and amortization of intangibles. Let's face it, these are not one-time unusual charges and should not be excluded from expenses.

    More appropriately, take about 83% of $4.44/share ($3.68). $3.68 times a multiple of 20 is $73.68, and then add $4 cash for a present value of $77.68.

    How did I arrive at the 83% figure? Last qtr Gaap earnings of .90 vs. nonGaap of 1.12 is 80%, and I added 3% because some of the charges are probably indeed unusual, and this gap between the two methods will continue to shrink with growing earnings.

  • confluence12003 by confluence12003 Nov 7, 2014 10:55 AM Flag

    This company manages cashflow very well. Inventories and receivables very tight and they manage to extend accounts payable. Hence, we have one of the few small-cap tech companies paying a dividend.

  • Reply to

    Added more at $60.04...long and patient

    by todd0888 Nov 7, 2014 10:06 AM
    confluence12003 confluence12003 Nov 7, 2014 10:17 AM Flag

    I added at 61 and 63 after selling some of my shares before earnings. What' s not to like in the recent report? I see the value at 75-80. Cash on hand, can't forget to add that to price projections.

NTE
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