i finally got around to looking at some of VTEX's fundamentals.
while this is by no means comprehensive, here are my initial thoughts ...
good reasons to like this company:
--definitely in a growing market
--consistent revenue and earnings growth
--diverse customer base (satellite systems integrators, TV
broadcasters, international telecommunications companies, phone
companies, private communications networks, government agencies);
no one customer represented more than 10% of sales in FY97; export
sales high but declining (56%, 59%, and 64% of total sales in FY97,
FY96, and FY95, respectively) and spread across western europe,
asia, and the middle east
--no debt
--high backlog ($73M in last year's 10-K; stellar relative to FY97
sales which were "only" $92M)
--$16 book value(!)
--$25 revenue/share(!)
--15% insider ownership (CEO rex vardeman has ~5%)
--hefty institutional ownership (from the most recent proxy dated
12/97, the biggest holders are ryback mgmt, fidelity, and EQSF
advisors with 8.5%, 8.3%, and 6.0%, respectively)
--nice acquisition history which has fueled lots of growth and given
them market share (1993 acquired antenna division of manufacturer
Krupp (Germany); in 1995 purchased Maxtech, a PA-based maker of low-
noise and solid-state power amps used to receive and transmit
satellite signals; last year bought TIW Systems, a maker of
satellite earth station products, in a deal valued at about $20
million)
--announced 500,000-share buyback earlier this year for stock plan or
acquisitions
concerns:
--low gross and profit margins for my taste (8% and 33%, respectively)
--ROE of 12%
--on oct 27, in the year-end press release, the CEO warned of
slowing growth in '99; this appears to be reflected in the one
analyst estimate i've found: $2.21 EPS for FY99 which is just 16%
growth over FY98 compared to 29% growth from FY97 to FY98
--very thinly traded
--historically, stock performance hasn't been great especially when
compared to the both the industry average and the mighty S&P
i'd definitely like to look at the new 10-K which should probably be
out any day now. also, i'm not that familiar with VTEX's major
competition (and i'm sure there are some big boys: COMSAT,
motorola?). in addition, i'm really not that satellite-market
savvy. anyone?
from this a-bit-more-than-cursory-look, i'm intrigued. i'm surprised
it doesn't rate a more lofty P/E.
if you're a fan of the PEG, using a forward estimate of $2.21,
a trailing EPS of $1.90, and a $17 share price, i get 0.548.
appreciate any feedback,
-chris. |
