Q2 2009 data(09/2008)
This company produces security product likes the smoke detector for home use. I have watched it for almost one year. It was falling down from over $30 pre share. Previously I feel it is cheap when it is around $6. Now it is around $2.6.
1. It is a microcap with market cap 2.5m x $2.6 = $6.4m which is really small.
2. Book value around $9. Far above market price. No debt.
3. Average earning for recent 5 years are above $1.5.
So why it is trading so low now?
1. The meltdown of house market which is their primary market.
2. In 2007 to early 2008, they made a wrong investment in Canada which made them lost several million of dollars. The money is not a big issue, however, this reflect the weakness of their management.
3. Their history: their revenue used to be around $25m from 1992 to 1995. Then go down to $7m at 2000, 2001, then rebound back to $33m at 2008. They are trading on OTC board from 1996 until 2003. Previous than 1996, I don't know.
4. Before 2003, they were losing money or making very little profit for 10 years. Their stock has been traded around $1 at 2002.
5. Revenue, Employees number and Income(all in millions except employee number:
Year Revenue E(S)* SG&A Income HKJ Rev** HKJ**
1994 26m 4.2 -1.0 16 1.3
1995 25m 4.3 -1.6 15 0.9
1996 19.5m 30(15) 3.7 -0.8 10 0.2
1997 15.5m 17(9) 3.2 -1.0 6.5 -0.2
1998 11.5m 18(7) 2.1 -0.1 7.0 0
1999 9m 14(6) 2.1 -0.9 6.5 0.3
2000 7.5m 16(8) 2.2 -0.7 5.5 0.1
2001 7.5m 16(8) 2.5 -0.6 6.0 0
2002 10.5m 17(9) 3.4 -0.8 11.5 1.2
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2003 16m 16(9) 4.3 0.6 23.5 1.9
2004 17m 17(9) 5.0 0.5 24 2.2
2005 23.5m 18(12) 6.2 0.9 26 2.4
2006 29m 15(12) 6.8 2.4 25 2.1
2007 33m 34(16) 6.5 3.6 41 3.8
2008 34m 19(14) 6.1 1.4 30 2.0
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09Q1 6.2m 1.24 0.25 7.8 0.29
09Q2 8.4m 1.65 0.16 11.9 0.60
*E(S) = Employees(Admin & Sales Person)
**HKJ = Income from Hong Kong Joint Venture
Mar. 24, 2009
Just found out they never paid any dividend in the past 20+ years. Stop watching.
