SMTX DD Info: $8 Target SMTX is up 50% today, but is still trading at a huge discount.
SMTX announced $.14 EPS in Q4 2009. The CEO said 2010 sales will ramp up further.
SMTX HAS THE POTENTIAL TO EARN $.80 - $1.00 IN 2010.
SMTX trades at a P/S ratio of 0.15 compared to the Industry average of 0.63. If SMTX traded at even HALF the sector average it would be $5.
The EMS sector is BOOMING driven by computer upgrades induced by Windows 7. IEC, CLS, SANM have posted best results in years, and ahve risen 500%.
The SMTX CEO, John Caldwell, is a corporate turnaround legend. He turned computer company GEAC computer around, it rose from $1 to $11 and was bought out.
The 2 most successful U.S. hedge funds- Bain Capital and Renaissance Capital, own SMTX. Renaissance has an army of engineers and MBA's scouring for undervalued stocks.
SMTX has slashed costs to the bone by closing its Boston plant. They will now be able to grow revenues and more importantly, MARGINS, with the cheap labor pool in the China and Mexico. I expect when SMTX hits $60 MM sales again it will have MUCH higher margins and could earn $.30 per share.
SMTX has a tightly held 12 Million float. It can move very fast, in 2005 went from $1 to over $3.50 in a few weeks. It was $8 in 2006.
In short, SMTX has all the ingredients to go much higher in a very short time frame.
HIGHLIGHTS:
- Profitable
- 12 MM share float
- $35 MM market cap
- $200 MM + revenues
- Last CC: Healthy increase in backlog
- Last CC: Revenues and net income will be go up this quarter. Profitable again.
- Last CC: Customers, new and old, expected to ramp up production in 2010
- Traded at $8+ two years ago
- Major players in sector (FLEX, JBL, SANM) have gained up to 500% in 2009 while SMTX is still under the radar
- Frequently mentioned as acquisition candidate because of heavy industry consolidation
- Company hiring at all worldwide locations due to ramp up in order and backlog growth.
