Comtech Telecomm. Corp. (NASDAQ:CMTL)

Showed up on MFI screener. Seems too good to be true (looks almost fraudulent), except the CEO and CFO were recently buying shares. CFO buys are somewhat rare in general. And it's not a China RTO stock!

The stock trades close to cash on hand ($22/share) and is trading like they have lost all their business. Yet they are profitable. EV/EBITDA is 2.72. EV/FCF is around 3.4.

Stats from MagicDiligence.com

Results for ticker 'CMTL' (Comtech Telecommunications Corp.):
Earnings Yield:   20.6%
MFI Return on Capital:   98.4%

MagicDiligence Research for 'CMTL':

Research Available for CMTL!

Instant Diligence:

The Earnings Yield of 20.6% is Very High.

The MFI Return on Capital of 98.4% is Very High.

Near-term Financial Health appears to be Excellent. The current ratio is 8.43.

Calculations:

(for quarter ended 2011-04-30)
Market Cap   =   Stock_Price * Shares
   =   29.05 * 32.38
   =   940.58

Excess Cash   =   Cash - MAX(0; (Current Liabilities - Current Assets + Cash))
   =   588.94 - MAX(0; (90.27 - 761.14 + 588.94))
   =   588.94

Enterprise Value   =   Market Cap + Total Debt - Excess Cash
   =   940.58 + 200.00 - 588.94
   =   551.64

MFI Invested Capital   =   Total Assets - Goodwill - Intangibles - Current Liabilities + Short Term Debt - Excess Cash
   =   979.53 - 137.35 - 47.50 - 90.27 + 0.00 - 588.94
   =   115.47

Earnings Yield   =   Operating Earnings / Enterprise Value
   =   113.60 / 551.64
   =   0.206 (20.6%)

MFI Return on Capital   =   Operating Earnings / MFI Invested Capital
   =   113.60 / 115.47
   =   0.984 (98.4%)

magic formula

Magic Formula

Solid stock. Pays 3.8% dividend. I show they have made money the past 5 years. Trading at just 8% over book (though that does include some goodwill). Finally an astounding $22 cash per share, for a $28 stock. Disclosure - I own in real life.

I'm willing to give this company the green thumb on CAPS because the valuations have come down to very attractive levels. The company has a ton of cash, and they hvae had no problem generating cash for several years.

However, I am hesitant to invest real money into this company, as it may end up being a giant value trap. They have two contracts with the US Army that make up over 50% of revenue, and they may disappear by the end of 2011.

A 3.2% dividend yield and low PE ratio (15.4) for the stock of a company growing earnings at 35%, annually, for the last 5 years and 24% for the last 10 years is too good to pass up.

On 30 stocks over $50 million market cap magic formula screen.

4-star CAPS rating and Schwab rates it a B. Pretty strong financial statements, although earnings have not increased significantly after they dropped off after the 2008 financial meltdown. Good cash flows and returns on investment. I calculate a book value of $20 a share, so that’s pretty solid compared to the current stock price. Big variance in analyst predictions of 1Q 2011 EPS (from 0.27 to 0.71). Descent dividend of > 3%. Going to purchase with real money portfolio.

There were 30 items in your list. Here they are in random order:

* CMTL 3*
* CNXT 3*
* NEP 5*
SNDK
SUPG
IPXL
PRSC
LO
PPD
VPHM
CECO
SCEI
IDCC
AGX
CBST
PDLI
APOL
KIRK
MSFT
ARO
RTN
HRB
OSK
USMO
UIS
ZLCS
TER
TNAV
AMED
AFAM
Timestamp: 2010-11-08 17:41:13 UTC

Comtech has had a bad few weeks as it lost a defense contract and its acquisition of CPII did not work out. However, it still remains a good investment as proven by its earnings report that came out on September 23.
Three things that make it a good buy -
a) Well-run company with great products
b) Bigger defense companies with plenty of cash are always interested in paying a premium to acquire CMTL
c) CMTL management is looking actively for acquisition, evidenced by their attempt at CPII, which is always a good sign

Below it's ave P/E, huge cash position will cause them to buy back stock, pay dividends and likely lead to being bought out.

The company is in a high entry barrier industry. Their technology is top notch and is being used in both Federal and Commercial worlds. The stock got beaten down lately (7/20/2010), and this is a good opportunity to buy in cheap. I added to my portfolio and I am looking to add more.

High growth

Blue force tracker!!=$

HiGrowth screen

Company

Return, 1998-2007

Jan. 1, 1998 Market Cap

Hansen Natural (Nasdaq: HANS)

21,201%

$16.5 million

Asta Funding

8,252%

$3.1 million

Celgene (Nasdaq: CELG)

6,771%

$129.0 million

Apple (Nasdaq: AAPL)

5,959%

$1.7 billion

Comtech Telecommunications (Nasdaq: CMTL)

4,246%

$11.3 million

Daktronics

3,493%

$23.1 million

Green Mountain Coffee Roasters (Nasdaq: GMCR)

3,455%

$24.7 million

Clean Harbors

3,378%

$15.8 million

Innodata Isogen

3,135%

$3.1 million

Immucor

2,941%

$70.0 million

Data from Capital IQ, a division of Standard & Poor's. Includes only U.S. stocks listed with verifiable stock price histories on major exchanges.

INCREASE IN SALE AWARDS OF OVER 4MILLION

They recently announced they are about to buy Radyne for $11.50/shr or $216.2M. Their stock are going up and you can expect them to go higher since company is expanding. Good choice for a long-term...

This company continues to receive orders, though not enormous by last year's standards. The stock continues to dribble away. Given the economy over the next year, I don't anticipate big orders like last year's $605.1 million MTS contract with the US army. If Republicans stay in office, I might change my outlook but definitely not if the Dems win the White House.

Great mgmt team with long history of underpromising and overdelivering. Solid gov't driven contracts in over the horizon satellite communications.