Thursday, November 15, 2012

Taitron Below Net Current Asset Value NCAV

Taitron Components (TAIT)
Let's just say an interesting business. It is a very small company and is international. It is in the distribution and supply of brand name electronic components, and original designed and manufactured (ODM) electronic components like discrete semiconductors. They also provide ODM services, such as outsourced product design and manufacturing assembly services for contract electronic manufacturers and original equipment manufacturers. The company sells its products in the United States, Mexico, Brazil, China, Taiwan, Canada, and internationally.

The stock price has risen consistently overall to where it is today from a deep low of $1.51 in mid 2005.

At its current market price of $2.74 as of June 1st on the exchange it is selling for below net current assets (net current assets - total liabilities) coming from its most recent quarterly on the SEC's site. This should be pretty close to its liquidation value theoretically but isn't close to the floor for the stock. But is the market efficient? Checking out some other things, they've reduced their long-term debt for the past 3 quarters but surprisingly this year they started paying a dividend of $.10 a share that they plan on keeping for 5 years. I don't think they have the cash flows or the opportunity that warrants paying a dividend with the business currently at hand. They have grown book value over the years and have always traded at low multiples. Are they expecting something great this year or next? Interesting. I'll be updating over the next days with some other small-cappers that I think have even maybe more potential and leave me scratching my head.

No comments:

Post a Comment