Richard Electronics (RELL)
Price: $8.70/share
Market Cap: $119 million
NCAV: $166.3 million
Mkt Cap/NCAV: 0.71
Cash: $97.2 million
S/T Investment: $33.3 million
NCAV: $13.97
Tangible Book Value Per Share: $11.64
Earning Power Value: $15.34
Cash and Short-Term Investment Per Share: $9.30
Overview
Richard Electronics (RELL) is a classic Benjamin Graham and Walter Schloss play. The firms has a clean balance sheet with the bulk of its assets being made of of cash and short-term investments Richard Electronics has little to no debt and a tangible book value of $11.64. The company has a long track record and has been in business for over 60 years. With $97 million in cash and $33 million in short term investment and little debt you can't go wrong. The company is sell for 0.6x its NCAV. Currently the market is valuing the company for less then its cash and short term investment on its balance sheet.
Business Overview
The company is in the business of providing engineered solutions, power grid, microwave tubes and related components, and customized display solutions. Through the company's core engineering and manufacturing capabilities to provided specialized technical expertise and valued added engineering solutions.
Products The Company Provides
- Capacitors
- Electromechancial
- Electron Tubes & Vacuum Devices
- Electro - Optics
- Laser Consumables and Parts
- Inductors
- Microwave Power Sources
- Magnetrons
- Microwave Measurement Devices
- Waveguide Components
- Passive Devices
- CRTs
- LCDs
- Power Amplifers
Application Products Are Used In
- Broadcast Transmissions
- Dielectric Heating
- High Energy Transfer
- High Voltage Switching
- Induction Heating
- Laser Cutting
- Medical Imaging
- Microwave
- Microwave Processing/Heating
- Plasma
- Power Conversion
- Radar
- Radiation Oncology
- Rectification
- RF Amplification
- RF Oscillaction
Financials
For the nine months ending in February 2015, the company had revenues decrease 1% to $102 million and had net loss before extraordinary items totaled $3.4 million v.s. income of $2.5 million. Revenues from the industrial power group (EDG) segment decreased 65% to $22 million and revenues from the display system group (CANVYS) segment decreased 78% to $5.0 million.
Third Quarter of 2015
For the third quarter ending in February 2015, the company reported net sales of $33.5 million, a 1.8% increased from the previous years of $32.9 million. Sales for the company's EDG and Richardson Healthcare businesses increased 4.2% and 3.5% respectfully. But the company's sales for its Canvys division were down 7.4%, compared to the prior year's quarter. For the third quarter gross margin increased to $9.8 million and operating expenses were $12.6 million. By the end of the third quarter the company had cash and investments of $113 million.
Cash and Share Repurchased
Richard announced a third quarter dividend of $0.06 a share and a dividend of $0.054 dividend for holders of class B common stock. The dividend will be payable on May 22, 2015, to all common stockholders of record on May 7, 2015. During the third quarter the company $1 million of its cash to repurchased 134,300 of shares. Since the company announced its repurchase of share plan in 2011, they have repurchase over 4 million shares. Richards Electronics had make it clear that they will continue to repurchase shares.
Valuation
Richard Electronic has an current and quick ratios of 8.22 and 6.37 which shows that the company has an strong balance sheet with its assets outnumbering its liabilities. The company balance sheet is clean and the bulk of its assets are made up of mainly cash and investments. Richard is selling for 0.7x its tangible book value and 0.6x its NCAV value. The market is currently valuing the firm for less then its cash and investments on its balance sheet. Richard Electronic has $9.30 per share cash and investments and sells for $8.70 per share. Right now you can buy a stake Richard and its get non-cash assets for free around with 0.60 cents per share in cash and investments. The company may be reporting short-term losses but has an earning power value of $15.34 per share.
No comments:
Post a Comment