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Strategies & Market Trends : Low Price/Cash Ratio Value Stocks -- Ignore unavailable to you. Want to Upgrade?

To: stock leader who wrote (1386)	2/12/2009 11:37:35 AM
From: FIFO_kid2	Read Replies (1) \| Respond to of 1931

Elroy even though NTE is the best of breed of the Chinese contract manufacturers, over the last decade there has been a massive erosion of margins and earnings power with no signs of let up. In the early 00s they could earn $4.00-$5.00 per annum in earnings and now they are in the $1.50-$2.00 range at best. Unfortunately, I think the future valuation of NTE will be more dependent upon its dividend yield than earnings and really should be avoided until there is some signs of a rebound in the electronics sector but before the reinstatement of the dividend. With that said under normal market conditions the stock has a valuation potential trading at a level somewhere of 4-5% yield which could be a nice winner IF they can reestablish the dividend at generous levels again. Right now I would rather stick with companies that should show YOY rising margins in 2009 with tolerable balance sheets and be nimble if the trend starts to collapse. Gold mining, oil refining, fertilizers are some sectors that should show improving margins.