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Technology Stocks : Aviat Networks
AVNW 24.14-1.6%Nov 4 3:59 PM EST
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To: Rob Preuss who wrote (238)1/8/2009 1:54:08 PM
From: The Ox  Read Replies (1) of 312
 
For the most part, I write off Goodwill whenever I look at a company's balance sheet. In any fire sale or distressed situation, Goodwill is relatively useless and unnecessarily inflates a company's book value. Its basically an accounting measure that holds the store of "overpayment" when acquiring an asset. Over 40% of HSTX's assets on their balance sheet are in the Goodwill and intangibles category. In the latest report, one can subtract 20% from A/R and 50% from Inventory, remove the intangibles and goodwill and come up with about $4/share for Net Tangible Assets. IMO, this is the most they get from a fire sale but it shows that IF the company can generate earnings going forward that the stock price was relatively inexpensive a few weeks ago. Keep in mind that fire sales don't usually give alot of credit for customer bases and intellectual property, some of the things that make up goodwill and intangibles.
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