I voted with Kelloggs group. So today I get a next day UPS letter with a desperate plea explaining why Kellogg can't be trusted. Reminds me of the last minute mud slinging election stuff you get. Clearly MFC is running scared right now. I have a fair bit of confidence in what Kellogg has to say. I've been involved in other companies he's invested in, and he's not said a word. I think he's reached the point where he felt he had to do something. The points he makes about MFC not doing what they say they will, changing auditors and sitting on mountains of cash all are valid concerns.
Bankruptcy? Hahahahaha!!! That's ridiculous. You declare bankruptcy when you are deep in debt and have negative cashflow for quarter after quarter. Nam Tai doesn't have negative cash flow or any debt. They will be paying a dividend for one more quarter.
Nam Tai's prospects have changed dramatically in just 6 months. From a company expecting $3 billion a year in sales, to one that is shutting production facilities. But bankruptcy? Not a chance. The company has something like $20 per share in assets including cash and land. It will take some time (probably years) for that value to be realized. But if Nam Tai hits $5 soon, it will be a screaming (long term to be sure) buy at that price.
It seems strange that the company would be doing the real estate development themselves. Are they basically throwing in the towel on the electronics business and essentially becoming a REIT?
The answer is no. Apparently that decision is largely tax driven. If they were to sell the land, they would pay a 60% tax on the gain. But if they develop the land, they pay about 6% on the profits. Just a slight difference. To do that they will need partners who will be running that operation, they are not going to suddenly become real estate experts. They will shortly be putting forth more information about their plans for the land.
But in the meantime, it's full speed ahead with the electronics business. They are hoping to have announcements of new contracts soon.
I'm not seeing anyone saying anything about the shares rising. But it's been a real run up, increasing by 50% in just 1 month. Anyone seen anything substantial?
The cancellation of the conference calls is a response to the law suits. Those suits allege that Koo deceived investors in conference calls. So the company response is to not hold conference calls. It's not a good development.
Are you short this puppy? Paying the 5% dividend and hoping the company fails when they are increasing their employees by 40%? Man you are brave.
That's an uninformed statement. It depends on the business. Manufacturers have lower margins than say, software companies. 10% this last quarter was a gift. 7% is about right for Nam Tai. The important thing is that orders are not decreasing. If they are increasing headcount by 40%, business will be growing significantly this year. I'll take 7% on $2 billion in sales (or more) every day and give the CEO a raise.
Nam Tai is going to enter the Ultrabook LCM business making 13.3" screens. This is fairly similar to the large tablet screens so they will be able to modify existing product lines to produce them. Ultrabook LCMs will be about 15% of their production.
They are expecting gross margins to be in the range of 7% this year.
Nam Tai is still ramping capacity and expect to be going pretty much full blast by the end of this year.
Head count will increase from about 7,000 now to 10,000 by year end.
The transition to the new facility in Shenzhen will take about 3 years. At that time they will sell the current facility, which is now quite a valuable asset with the rezoning.
I agree with most of what you say. However, the $300m per quarter is the capacity they *will* have when they finish building their new plant, probably in 2016. Capacity now is probably in the $200m a month range.
You miss the point Hagen. Basically if what we're saying is that Apple treads water, it means that Nam Tai will *only* have 2 billion in sales and make $3.00 a share this year. If Apple were shrinking significantly, I would agree with you about this is bad news for Nam Tai. But let's say Apple had instead reported a 10% growth in unit volume. What would that have meant for Nam Tai? Nothing, since they are still ramping to capacity based upon what Apple already requires. That extra business would have gone elsewhere. These are still huge numbers for Nam Tai with Apple pretty much breaking even.
It is *not* very poor results and guidance. It is a little less than expected. But it's not off a cliff as some people feared. Apple is still selling 10s of millions of iPhones and iPads each quarter. We wil not know until next week, but so far I don't see where this will affect Nam Tai at all. But it will be interesting to see what Nam Tai's expectation is for this year. I think it will continue to be for record revenue and earnings.
Peaked is a relative term. Apple's stock maybe. And might iPhone and iPad growth slow? Probably. But slowing growth is still growth. The point of the video is that the iPad boom continues. Nam Tai only needs a sliver of the market to make huge profits. And on a relative basis Nam Tai is extraordinarily cheap. Remember that Apple will continue to produce new products. The iPhone 5s will be out this year. And that assumes that Nam Tai is *only* supporting Apple. This is a really great story.
If I had to pull all my money in one stock, it would be Nam Tai by a mile. Do you see stocks with this kind of growth potential? Frequently. Do you see stocks that represent this kind of value? All the time. Do you see stocks that are spinning off significant cash flow? For sure. Do you see stocks paying a 4% plus dividend? Absolutely. Do you see all of those though in one stock? Yeah, in Nam Tai and in virtually nothing else. Though it more than doubled this year, I will be flabbergasted if it doesn't double again next year, at least.
A fascinating thing. Take a company like Diamond Foods. Their market cap is 1/2 of Nam Tai's, yet 8 analysts provide earnings estimates. Nam Tai? None. When that changes next year, then we'll see something.
Fill the gap? Imagine people investing their hard earned money on such things. When for example did Apple 'fill the gap' between $100 and $300 a share? Answer: Never and never will. It went straight up.
"Jesper Madsen, manager of Asian income mutual funds for Matthews International Capital Management, stated in an interview that of the Chinese companies paying a dividend, none has been a fraud."
I've checked on this, and Madsen is right. There is *no* evidence of financial fraud from dividend paying Chinese companies like Nam Tai. You cannot pretend to send someone a check, it's real money.