Here is a little report I put together on NTAIF. It is totally my impression and I welcome critical input. If you choose to buy this stock I would suggest you choose another source besides this "Home Grown" Report. I do this with all my holdings. The Technical info is omitted. Jeff
Nam Tai Electronics, Inc Nasdaq:NTAIF
Company Snapshot:
Business - Quality manufacturer of mid range electronics for OEM's.
Headquarters - North America: Vancouver, B.C.; China: Gaundong Province, Shenzhen China
Market Capitalization - $185,168,950 Share Price 16.75 (6/01/98)
Shares Outstanding - 10,972,975 (3/31/98) Shares Authorized - 20,000,000 (1994)
Revenues - $132,000,000 (FY 1997) Revenues - Qtr 1 1998 $26,300,000
Quarterly Dividend - $.07 (1.67% annual yield) Stock buyback underway - yes
Stock Trading Range - 52 week period ending 6/01/98: $9.25 to $32.50
Principal Customers By Region: North America 51%, Japan 24%, Europe 18%, Others 7%*
Principal Customers By Company: Texas Instrument 38%, Sharp 35%, Seiko 10%, Nintendo 7%
Value Snapshot:
Price Earnings - 4.8 (Trailing 12 months EPS as of 3/31/98)
Net Income Qtr 1 98 vs Qtr 1 97 - $5,870,000 vs $5,570,000 up 5.3% vs 97
Earnings per share Qtr 1 98 vs Qtr 1 97 - $.53 per share vs $.71 (reflects @ 3,233,435 dillution)**
Revenue Qtr 1 97 vs Qtr 1 98 - $26,300,000 vs $31,200,000 (15.6% decrease)
Price to Book - 1.23 (6/01/98) Price to Sales - 1.41 (12/31/98)
Long Term Debt to Cap - N/A Total Debt to Cap - 13.2%
Return on Asset - 18.6% Return on Equity - 21.1%
Gross Profit Margin Qtr 1 98 - 25.1% (increase of 7.2% vs Qtr. 1 97)
Book Value of Stock: $13.62 ($8.93 in Cash 3/31/98)
** Shares Outstanding Qtr 1 1997 - 7,898,900 Total Shares Out 3/31/98 11,132,335
Safety Snapshot:
Market Capitalization - $185,168,950
Long Term Debt to Cap - N/A Total Debt to Cap - 13.2%
Book Value of Stock: $13.62 ($8.93 in Cash 3/31/98) Beta -
Longevity - 10 consecutive years of profitability and revenue growth since initial IPO
Dividend - Intact since 1994, Recently raised to $.28 and moved from annual to quarterly
Diversity of Customer base - The risk here are fairly large since 90% of business is with 4 Clients
*Asian Risk - Since 1995 sales to Japan down 10%, North America up 21%, Europe up 5%.
Timing Snapshot:
52 Week Moving Average -
Stocastics -
Relative Strength Index -
Current Price - $16.75 (6/1/98)
Recommendation: Solid company fundamentals with good growth over 10 year period
are compelling. The company is in a financial position to grow it's business through acquisition,
maintain dividend, and continue stock buy back program. Margin pressure may be an issue
should Japan situation deteriorate further. This pressure should be mitigated by corresponding
declines in component prices, and preferred relationships with primary OEM's. The Primary risk
for the company are a lack of customer diversity and a further economic decline in
Japan and its potential impact. In addition the company does plan additional acquisitions in these
tougher times for the Asian electronics industry. I feel the strong fundamental value here
warrants exposure and would buy the stock up to a $20 given present information. With
stablization in Asia, and additional customer relationships , I would re-evaluate additional exposure.
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