Syntax-Brillian Sales Are Up

On February 11th, 2008, Syntax-Brillian (BRLC) delayed the release of their quarterly earnings report but did give some preliminary information about the quarter. The combined number of units sold in Asia and North America, through direct sales as well as sales made by royalty partners, was 642,000 compared to 240,000 units in the previous quarter and 352,000 units in the same quarter last year.

This impressive growth is in line with the phenomenal growth being reported by other TV manufacturers and LCD TV component suppliers such as Corning (GLW). I will not speculate as to what the final earnings will be for the quarter as there is still much confusion over how the royalty system will imact results as well as how the tooling deposits will be accounted for and how the repurchase of TVs from SCHOT will impact the quarterly results. In fact, I will say that anyone that does speculate on these matters is engaging in deceptive practices.

What we do know is that the LCD TV industry is as strong as it was forecasted to be and that BRLC is growing nicely. As might be expected with a young and growing company, there have been growing pains. But consider how great of a value this company's stock is right now. According to the numbers given by Scottrade, the tangible book value as of 2/12/08 is $3.07. That means it closed on 2/11/08 at only 63% of its tangible book value. That alone makes it a takeover target. Its P/E for the trailing 12 months is 7.9X, its normalized P/E for the most recent fiscal year is 4.0X, its TTM price to sales is 0.2X, and its TTM price to cash flow is 9.5X. This seems like a great low risk value play which has been way oversold.

Disclosure: Author has a long position in BRLC

Comments

[robert99:]

I lost some money on BRLC at around $4, and although I am hesitant to buy back in because of that, it does indeed look very enticing.

2008 Feb 13 03:13 PM

[Bharat Upad...:]

I think that at this price there is good potential for some gain but I am hesitant to buy more seeing declining price trend on almost every event throughout the year.

2008 Feb 13 04:21 PM

[retrobeast:]

Buyout or Merger is in the works. BRLC will rise like a rocket in the next few months. Buy, hold, be happy.

2008 Feb 18 08:37 PM