Nam Tai Electronics, Inc. (NYSE:NTE)

spiritof78 (97.75) Submitted: 2/23/2007 9:08:31 AM : Start Price: $11.06 NTE Score: -51.32

A diversified electronics and TI producer trading near it's 52 week low. It has had some very disappointing recent earning results, so capital decline is well deserved. However the big question for an investor is, is this a short term miss or evidence of a long term lack of innovation. I see many positives first off from a technical analysis its a small cap payer of regular dividends with miniscule debt and $5 per share in COH. It's founder still sits on the board which is something that shows commitment. It's margins are slightly higher than its competitors who have not taken full advantage of their economy of scale to keep smaller companies out of the picture. It's R&D lab is impressive which is also what I think happened to cause the loss. Science and inventing is fundamentally testing, assigning a theory and performing tests. What you saw cause the revenue decrease was a lack of new innovation, not pushing out bad innovation. Their products are still quality, it's better not to put out a new product than to put out a bad new product which does damage to your name brand. Sometimes when innovating your exploration doesn't yield the results you hoped for, in this even Nam Tai reloads and tries again the following year, rather than put out the bad widget and damage their reputation.