Nam Tai Electronics, Inc. (NTE)

Nam Tai Electronics provides manufacturing and design services to telecommunication and consumer electronic original equipment manufacturers. The company generates its revenues from three segments namely Consumer Electronics and Communication Products (CECP) Telecommunication Components Assembly (TCA) and LCD panels (LCDP). Company sells its products primarily in China, Europe, Japan, United States and Korea. The TCA segment that primarily manufactures color and monochrome LCD modules to display information in cellular phones, telephone systems, and RF modules for integration into cellular phones constitutes 72% of the revenues.

The electronic manufacturing services industry in which the company operates is intensely competitive and a drive to offer products at cheaper rates is putting immense pricing pressure on the manufacturers. The company had posted revenue growth of over 30% in 2003-05 owing to the fast growing mobile phone market. Since then, Nam Tai has taken a huge beating in its TCA segment, which has hampered the top-line performance. Financial results of Fiscal 2006 have been fairly disappointing for the company with only over 9% rise in the total revenues. Cut-throat competition has forced Nam Tai to sell the products at lower prices eroding the bottom-lines. Management expects pricing pressure to continue in future and has charted vertical integration plans in the major manufacturing facilties in China to control the costs. However, the benefits are likely to materialize only after two years.

Mobile phone market in countries like Japan and China is reaching the maturity stage and would not experience the same rate of growth in the coming years. As Nam Tai is heavily exposed to the mobile phone market, this could paralyze its growth prospects. As environment looks challenging ahead, management has lowered its previous revenue forecast for fiscal ’07 and ’08. With declining profits and no solid initiatives to drive revenues ahead, Nam Tai is expected to receive some hammering in the near future.

The market over reacted. Great fundamentals here by almost any metric... with so many businesses facing at least some commoditization pressures, I'll go with a company with hardly any debt, earning real money, and a history of giving it back to shareholders.

Summer hedge -- I don't have enough red thumbs in place right now and this company -- appearing as my Stock of the Day today -- seems a good candidate for near-term underperformance.

Its core business is weak. Its governance is questionable. Its market cap is lower than I think it was when I first started noticing it on stock screens a decade ago. My due diligence is close to naught on this stock -- if you challenge me as to what great scenario I have foreseen that causes NTE to underperform, I don't have one for you. It's just an intuitive call, and not one with high confidence at that. That's the why. Underperform -- and I'm likely to end this pick before summer's end, regardless.

Great company with a healthy dividend. Although the dividend was cut in half, the company can use that money to grow the business and improve on R&D. This stock should be up 50% this year!!!

punished already. still profitable. just a guess that this will bounce back upwhen people appreciate the dividend and + cash flow.

low PS, reasonable PE

Tight Bollinger Bands, Lots of cash, no debt, high yield

I love hot Asian dividends.

Another play that has been beat down and set for a massive jump soon. This is a real stock that is on sale and is just down right CHEAP. Got to love the dividend. This is one sweeeeeet total package.

Great earnings record, negative enterprise value, plenty of cash, etc.

Shrinking margins in highly competitive electronics business have pushed this stock down. NTE is still growing and a new factory will add to 2007 results leading to a price rebound. Dividends have been reduced for 2007 yet at this price should still give a nice yield and help this stock to outperform.

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.

Cash per stock > Stock Price. Enough said.

Fudamentals look good... Intuition tells me this stock will bounce back. Most of my top gains have come from buying after a market over-reaction and the recent crash of this stock definitely qualifies as such in my book.

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

This is a value play. The company has a dividend, a bunch of cash, has positive earnings (granted cost cutting is driving the earnings, but management is doing what they are hired to do manage). Finally I don't believe the economy is going into the gutter and this company will benefit

This stock is a steal at around $3 per share. It's a fools rule breaker and it's based in China which is set to recover from the current global downturn faster than the US. All in all a good buy in a growing market sector.

Chinese, LT debt<2%, high yield> 7%, low p/e trailing <6, forward<14, tech

Trading for less than cash on hand.