Most undervalued NYSE stock 4 MM float +10%
GAI ($3.29) is a 4.3 MM float China semiconductor stock WITH $5.6 PER SHARE IN CASH AND REAL ESTATE!!
-$4 per share working capital, $3 per share cash, no debt
-Real estate worth $2.60 per share
IF GAI RISES TO $6.30, you only pay for cash and land and GET GAI BUSINESS FOR FREE.
-Tiny 4.3 MM float 28% held by institutions.
-Semiconductor chip sales DOUBLED last quarter and will continue to boom- THESE CHIPS ARE USED FOR CELLULAR PHONES- A BOOMING CHINA MARKET.
GAI CURRENTLY PRODUCING $25 MM PER YEAR OF CHIPS EXPANDING TO $50 MM PER YEAR BY MARCH 2008.
Global-Tech Appliances (NYSE: GAI): A Double Your Money Stock
Any investor with an appetite for risk and big reward should look at Global-Tech Appliances. The stock trades at only $2.60 and yet has $3.70 per share in cash! Additionally, there are real estate holdings worth at least $2.60. The company is cash flow neutral for now but with new product initiatives coming -- the stock can go significantly higher over the next 6-12 months.
Based in Hong Kong, Global-Tech Appliances Inc. is a holding company, owning subsidiaries that manufacture and market a wide range of consumer electrical products worldwide, including floor care products and small household appliances from kitchen appliances like breadmakers, coffeemakers, espresso machines, deep fryers, food processors, to beauty aids like hair dryers, hair-roller sets, and curling irons, to travel products, like voltage converters, to garment-care products. These products are marketed to customers under Black & Decker, Proctor-Silex, and Sharper Image among many other name brands.
Net sales for the fiscal year ending March 31, 2006 were $73.8 million, up 76%, compared to $41.9 million in the prior fiscal year. However, the company reported that gross profit margins in the Company's core business of floor care and kitchen appliance products will continue to remain adversely impacted by increase in material costs like plastics derived from natural gas -- particular as gas prices rise. As a result, GAI is lowering fixed costs with measures like reducing work force.
They also are pushing R&D in areas where they see promise. Their compact camera module components, used primarily in cellular phones, are growing in net sales, and therefore GAI is expanding the business and has formed an R&D team in Taiwan to push product development capabilities. This business segment is expected to give a boost to financial performance. GAI is also marketing a line of digital imaging products and anticipate that this new product category will soon become a growing part of our overall business.
Type of stock: A double your money stock. This consumer electrical product designer and manufacturer (with promising R&D in the digital imagining sector) is significantly undervalued.
Price target: I like the economics of Global Tech: It is trading at $2.60, but in cash and real estate assets alone, this is worth more in the range of $3.70 per share. It is cash flow neutral for now. While the core business of household products has been adversely hit by rising price of materials, GAI�s pushing into new product initiatives give this the potential to go significantly higher over the next 6-12 months.
