James, I've looked at MAXS before, and thought that it seemed undervalued compared to its sector.
With low price/cash ratio stocks, there'll almost always be something that you will dislike, when you see it. If it's a bad phase of the cycle, that's something I like, but if it's management that I don't trust, then I can pass on it.
What can you say about the management of MAXS? All I know is what I see from a quick look at Yahoo's profile. I saw three people with the same last name, which is a red flag for me. When I saw their compensation, I thought it was out of whack with the size of the company. According to the proxy they don't seem to own very many shares, which is unusual for such a small family-run company.
TSFT has some of the same attributes: it's essentially a family business. It has multiple officers and directors with the same last name, which as I said is usually a big red flag for me -- it suggests that they likely don't have my best interests in mind. However, when I looked and found high insider ownership of the stock, compensation that was almost reasonable, and no significant related-party transactions, I thought it might be a tolerable risk. If you're aware of similar mitigating factors for MAXS, I'll take another look. |
