Is Nam Tai About to Fly?

Feb.12.08 | About: Nam Tai (NTP)

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.

Pertinent Data

  • ~$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.
Technicals

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