OFF TOPIC -
John,
Surface look at SFAM was pretty nice, based on:
1. P/E is very attractive compared to industry
2. debt/equity = o
3. book/share = $11.38
4. sale growth %(1 yr) = 35.5% vs. industry 15.9%
5. Pirce/sales ratio = 1.57 vs. 1.54 (let's call this a wash)
6. Net % Margin = 11.6% vs. 5.9%
It makes me want to dig a little deeper based on:
1. Komag and AMD are 25% of their total business
2. Future earnings growth % is low compared to industry average
3. ROE = 13.2 vs. 20.9 (why is this so far off?)
It appears there is more to be happy with, than sad about. However, I did not get a chance to look at the news yet, or SEC filings. If these show no real killers waiting to occur, then I think you have a nice opportunity with SFAM. I think they should be working hard to make ROE higher; the low number may suggest the company is used to living well, and locked in that mindset. I also consider it important for SFAM to diversy it's customer base, working to develop a lower dependence (25%) on Komag and AMD.
I cannot offer anything else at the time, but in light of current activity, my guess is there is time to think about this for a little while.
Regards, JB
P.S. IBD is hard to beat, 3-years of morning doorstep delivery makes it even better. |
