TMAX, a toy mfg., at 5 1/2 down from ~8 a year ago, is a stock pick I identified.
I started with Telescan's ProSearch, and I searched for stocks over $3 with low 1 year and 18-month relative strengths, with market caps less than $100 M, and low institutional ownership. Since I tend to be cautious when investing in micro-caps, I also specified some value criteria to assure that the co. isn't likely to go out of business. These criteria were a low p/book, cash of at least 10% of market cap, and positive free cash flow. I generated a list of 25 stocks, picked some of the more appealing to look at the SEC filings. TMAX is one of the survivors. I'll list another one soon.
Like any beaten-down stock, there is going to be something negative in the recent developments. In the case of TMAX, I think this is not company-specific, but perhaps more peculiar to any co. dependent on Christmas sales: the co. said that its sales going into this Christmas were higher than ever before, but not as high as expected by analysts.
The toys include, among other things, Spice Girl dolls, which I've seen in the retail stores.
Market cap is $55 M, float 4.8 M shares. The co. is quite profitable. If the co. were to meet its FY 3/99 estimates of 1.21, it would have a p/e of 5, although the co. has indicated it will fall short of this by some unspecified amount.
More valuation criteria: PSR 0.6, p/book 1.52, p/cash flow 4.9, return on equity 37%.
They have zero debt and good cash, so the liuqidity looks quite safe to me.
Here's Yahoo's chart, news etc: quote.yahoo.com
Below is a MarketGuide report:
Market Guide Quick Facts Report
Toymax International, Inc SYMBOL: TMAX EXCHANGE: NASD
PRICING DATA (AS OF) 12/18/98 RATIOS & STATISTICS
Price 5.75 Price/Revenue (TTM) 0.57
52 Week High 11.38 P/E (TTM) 5.36
52 Week Low 4.19 Price/Book (MRQ) 1.52
Beta NA Price/Cash Flow (TTM) 4.94
Avg Daily Vol (10 Day) 0.02 Mil ROA (TTM) 18.71%
Avg Daily Vol (3 Month) 0.02 Mil ROE (TTM) 37.26%
Current Ratio (MRQ) 1.96
DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.00
Indicated Annual ($) 0.00
Yield 0.00% NOTE: TTM = trailing twelve months
MRQ = most recent quarter
SHARE RELATED INFORMATION SHORT INTEREST INFORMATION
Market Cap. ($) 60.979 Mil Current Month 0.191 Mil
Shares Out. 10.605 Mil Previous Month 0.199 Mil
Float 4.800 Mil Short Interest Ratio 7.1 Day
INSTITUTIONAL & INSIDER OWNERSHIP
PURCHASES SALES NET PURCH %OWNED
Institutions (3 Months) 0.173 Mil 0.606 Mil -0.433 Mil 7.0%
Insiders (6 Months) 0.000 Mil 0.000 Mil 0.000 Mil 54.7%
BUSINESS SUMMARY Toymax International, Inc. is involved in the
designing, marketing and distribution of toy products. For
the 6 months ended 9/30/98, net sales rose 12% to $49.4M.
Net income fell 5% to $5.4M. Revenues reflect the sucessful
launch of a line of Spice Girls products and increased sales
of the Precious Metals and Creepy Crawlers product lines.
Earnings were offset by lower margins due to increased sales
by the Hong Kong operation, which carry a lower margin.
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1996 1997 1998 1999
JUN 4,151 2,679 7,091 8,271
SEP 20,545 14,921 37,176 41,128
DEC 11,472 21,398 35,754
MAR 7,454 15,685 19,308
TOTAL 43,622 54,683 99,329
EARNINGS PER SHARE
JUN 0.000 -0.190 -0.050 -0.120
SEP 0.000 0.260 0.810 0.630
DEC 0.000 0.050 0.460
MAR 0.000 0.320 0.110
TOTAL 0.000 0.440 1.330
GROWTH RATES 1 YEAR 3 YEAR 5 YEAR
Revenue 81.65% 12.04% 24.36%
EPS 187.44% 229.00% 22.65%
Dividend NM% NM% NM% |
