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Why has this stock been left for dead?



April 28, 2010 – Comments (0) | RELATED TICKERS: ACTI.DL


Here's a stock that popped up on my radar screen, today a small Chinese tech company called Actions Semiconductor (ACTI).  I believe that ACTI makes chips for consumer products such as MP3 players, GPS, etc... 

The company's stock currently trades at $2.35/share.  According to the statistics that are available a Yahoo Finance it currently has $266,386,000 in "Cash," "Cash Equivalents," and "Short Term Investments" on the books.  If one divides that by the 86 million shares that ACTI supposedly has outstanding it comes out to $3.0975 per share in cash on the books along virtually no debt. 

These rough numbers that I came up with in a few seconds are fairly close to those that were mentioned in the company's 2009 year-end presentation to investors which listed the following (link): 

"Positive cash flow with over $254M net cash ($3.30/ADS)" [As of 9/30/09, down from $3.37 on 6/30/09] 

"Over $254 million in net cash, with positive cash flow since IPO" 

Companies that trade for less then their cash on the books pique my interest, but one has to ask themselves why they are so cheap?  Why has ACTI been left for dead? 

The company is losing money earnings-wise, but it appears to cash flow positive and trades at around 0.73 times book value. 

ACTI is scheduled to hold its annual meeting on May 13 and publish its first quarter earnings release and forecasts likely some time in May as well.  It is possible that information will come out in the meeting or the results / forecast that significantly move the price of this stock. 

I am throwing this one out there fairly early in the vetting process because I will fully admit that the semiconductor industry is far from my wheelhouse.  Is anyone in Fool Land familiar with Actions Semiconductor specifically or the industry in general? 


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