Micro-Cap Mind CTI Looks Like a Buy (MNDO)

| About: MIND C.T.I., (MNDO)
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The Microcap Speculator submits: Mind CTI (ticker: MNDO) just reported strong earnings for the fourth quarter of 2005. The company earned $1.3M, or $.06/share for the quarter on revenues of $5.04M. Operating income was up 17% year-over-year, although net income slipped as interest income declined.

The company also declared a dividend of $.119/share, net of Israeli withholding tax. The dividend is payable on March 27, 2006 to shareholders of record on March 14, 2006.

Monica Eisinger, Chairperson and CEO, commented: "I am extremely pleased with reaching record results this quarter, both for revenue and operating income. In 2005 we achieved our long-term goal of finding the right acquisition target and closing it in a beneficial way. The strategic acquisition of Sentori strengthened our presence in the US and in the mobile market. During the quarter we completed deployments for some existing orders and had some new wins. The revival of the US markets and our focus on the wireless markets combined with our successful integration of the two businesses result in a stronger than ever backlog and pipeline, which we expect to lead to growth in the coming quarters."

My take -- I continue to like Mind CTI for these reasons:

  1. The balance sheet is rock solid. The company has over $10M in cash and $30M in long-term bank deposits. Those items amount to almost $2/share.
  2. The company is incredibly cheap on an enterprise value to sales, or enterprise value to EBITDA basis
  3. The company is positioned in hot sub-sectors (MVNO, VoIP, triple-play) within the telecom sector, which is itself strong.
  4. Record backlog should fuel future growth.
DISCLOSURE: I am long MNDO. Not a recommendation to buy or sell any security. For informational and educational purposes only.

MNDO 1-Yr Price Performance: