Recommendation: Strong Buy
Reasoning: Incredible valuations, Superb financial security
Description: Nam Tai is an electronics design and manufacturing services provider to original equipment manufacturers of cell phones, PDAs, calculators, digital camera accessories, LCD modules, etc.
- ~$6 cash per share (current share price = $9.00)
- $1.28 FCF/share
- Price/Sales 0.51
- Price/Book 1.20
- 10% dividend yield
- Debt/Assets 1.49%
- Sales are declining in cell phones but increasing in other areas.
- New CEO recently appointed/restructuring completed
- Expect further weakness but potential for acquisition is too great to ignore. Cash levels are so high ($6/share) that some form of deal should be expected.
Chart looks negatively balanced still but the potential for a deal is huge. Expect to lose money initially.
Significant volume support seen recently.
Disclosure: Author's firm is long NTE