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SEC Filing
Year end: Mar. 31
APR 22, 2013
2013 Q3 Data
Check list:
1.Major Business.
Start 1990 as metal stamping OEM business(around 60%). It also do plastic molding just like DSWL, and assemble electronic parts(around 40%). Major customer is from German(50%) and Japan(30%) and US(20%).
Annual sale is around $20m to $30m. Up and down quite a bit. Gross margin around 20%.
2.Balance sheet.
Recent Price$1.67, Tangible book value $3.10, Share outstanding: 3.78m, Market Cap: 6.3m.
Debt: no, Inventory:$2.6m, Cash: $6m.
3.Credit facility.
Principles, interest rate, covenant, outstanding, payment schedule,
4.Financial data by years.
| 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 25.4 | 31.1 | 21.7 | 33.7 | 33.2 | 31.5 | 25.8 | 27.7 | 25.4 | 20.4 |
| OP Income | 0.2 | 1.7 | 0.3 | 0.9 | (2.3) | 0.4 | 0.6 | (0.3) | 1.0 | 0.2 |
| Income/s | 0.05 | 0.44 | 0.11 | 0.20 | (0.50) | 0.16 | 0.01 | (0.05) | 0.30 | 0.17 |
| CF-WC | ||||||||||
| CAPX | ||||||||||
| Cash | ||||||||||
| Dividend/s | 0.20 | 0.24 | 0.03 | 0 | 0.035 | 0.36 | 0.40 | 0.10 | 0.08 | 0 |
5.Cost structure
Leasing obligations. Flexible cost structure or fixed cost structure? Cost controls.
6.Insider holding, options, Insider trading info, share buy back.
Roland W. Kohl(CEO): 610k, 16%
Tiko Aharonov: 250k, 6.7%
Satoru Saito: 360k, 9.5%
7.Management compensation.
2012: Top 10 officers $800k
8.Employee numbers. Revenue/Employee. Compensation/Employee.
As Mar. 31, 2012, it has 319 employees.
9.Industry comparison.
Major competitors in the same industry. Whether the business is competitive?
10.Auditor
Better be among the big four.
11.Major events.
Business acquisition, law suit etc.
12.Comments.
(1) The company is quite similar to DSWL, both are OEM and has quite a lot cash and pays attractive dividend. However, it is different in the following:
a) it doesn't own and manufacture space while DSWL owns most space, this make the book value is less attractive.
b) Products are more diversified than DSWL which make it a better chance to recovery or even grows in revenue in the future.
(2) The dividend is not very stable. But the company generally likes to pay out money.
(3) Overall, I give it 6 quality score vs 5.5 for DSWL. However, the current price discount is less attractive than DSWL. Good to have it as an alternative of DSWL.
Update
May. 24 2013
Yesterday after a news that the company signed a multi-year contract, the stock shoot to $3.15 at some point, then closed at $2.25. Very lucky that I sold mine at $3.09 which made 80% return just in about one month. Some thoughts:
(1) The contract is less than 0.5 million in revenue/year. It won't change the company that much which clearly demonstrate the market was overreacting to the news.
(2) Yesterday about 1.6m shares changed hand which is about 60% of the public floating share. It is a crazy high number for this kind of company.
(3) My guess for yesterday's price and volume move is there was a short squeeze or someone might be interested to takeover the company.
Update
May 31, 2013
Yesterday there is another round up and down with a high of $2.25 and close at $1.86. The volume is about 400k.
(1) I checked the short interest so it is clear that both May 23 and yesterday short squeeze is not possible.
(2) Both the big volume and price jump happened on Thursday.
(3) Adding the 1.6m share in May 23, it seems someone had grabbed as much as 2m shares. Cost is around 1.6*2.5+2*0.4 = 5m. Adding the 1.2m share hold by insider, only leave around 500k share still floating.
(4) It might be a insider want to take the company private or third party want to take over it. With only 500k floating, I was wondering is there possible another round of big volume?
