Posted by Davy on October 7th, 2008 in Enlightened-American Portfolio, Stock Research
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Part 1 – Overview (below)

Part 2 – Risks & Upside

Part 3 – Valuation & Assessment

Nam Tai Electronics (NTE)

Nam Tai Electronics (NTE) is a holding company with subsidiaries engaged in the manufacture of electronics. The company operates in 3 segments: consumer electronics & communication products (CECP), telecommunications components assembly (TCA) and LCD products (LCDP). For FY 2007, the revenue and operating profits for the various segments broke down as follows: CECP (36% of revenues, 73% of operating income), TCA (53% rev, 34% OI), LCDP (11% rev, 3% OI). As of Q2 2008, the TCA & LCDP segments have deteriorated significantly as outlined below.

Intrinsic Value: $10 – $15 per share
Accumulate: $8.50 or better

FUNDAMENTAL METRICS
Share Price (09/25/2008): $8.81

• Market Cap: $395M
• Dividend Yield: 10%

• TTM P/FCF (P/5-yr avg FCF): 7.9 (8.4)
• Greenblatt ROIC (3-yr avg): 30.2% (30.5%)
• Debt-to-Equity: 0
• MRQ Total Liabilities to Equity (ex-goodwill): 0.30 (0.31)

• TTM P/E (Forward P/E): 6.32 (12.77)
• P/S: 0.58
• P/B (tangible – ex goodwill, intang, land rights): 1.1 (1.2)
• PEG Ratio 5 yr expected: 0.97

Part 1 – Overview (above)

Part 2 – Risks & Upside

Part 3 – Valuation & Assessment