Dennis,
Like you, I have been out of this stock for some time, selling in the 20's when I felt that the company was not serious about an acquisition and I had serious doubts about maintaining their profit margins. Well these problems have begun to surface and the stock has dropped. At these levels, is it time to buy? Idon't really know yet, but I'm going to keep an eye on it. You don't get too many chances to buy stock in a company for 10 and change that has a book value of over 13 and cash of $7.34/share. A couple of big question marks arise to me, 1. Will Koo ever decide to buy a company to help the company grow faster? 2. Are margins going to continue to drop? 3. 70% of their business is in calculators, that makes their product mix too heavily weighted in one sector. 4. With $7.34/share in cash, what is your Return on Investment for this money,obviously, it can be put to better use.
I bring up these questions not as one who is slamming the company but rather one who may decide to jump back in. I feel that the company needs to show increases in their sales. Am I right in that the only way the company can show sales for the partial acqusition that they just made, they need to own 50.1% of the company. If that's the case, don't be surprised if they do that if for no other reason than to show sales on their books.
If anyone thinks that with $7.34/share that the company is ripe for a buyout, think again, the only buyout would come from management,all IMO, Koo will never work for anyone else.
Any comments are welcome, as always.
Kevin |
