Sultan,
Here is comparison data to look at, then you'll have to make up your own mind as to where PSEM should be.
marketguide.com
As you can see, in valuation ratios, PSEM is way below its peers. Much more so than it deserves to be. The sector average P/E is roughly 45, with PSEM @ 23 (TTM). If PSEM were to meet the sector average, it would be trading @ about $35/sh. (These are not exact figures, I'm doing them in my head).
But PSEM does not have the revenue and earnings growth to match its peers, so this will keep the share price down somewhat. I see this as a reflection of its products. They are basically commodity products that cannot command premium prices. So what is MY target? Probably $24-25 by year end, but with continued upward potential through the next couple of years.
If they continue to broaden their moves into tele-
communication products, so much the better. If they heighten their visibility on the street, same thing. They COULD go to $30 a share by year end, but the market will have to determine that.
What we have here is a small, well-managed company that has demonstrated the vision and discipline to execute their business model very well, much like some of the large big caps. They dominate no market, but they can, and do, go toe-to-toe with the big boys, maintaining and growing market share and making money quarter after quarter. I think they're able to do this through a commitment to product excellence and great customer service, underpinned by what is obviously an excellent engineering staff and strong financial management.
Wish I could give you some harder target data, but this is all I have.
Regards,
Knip |
