This was posted on the yahoo board:
I am going to give it a shot to do a brief fundamental analysis on the last 4 quarters of Zagg. I am not a licensed broker or consultant.
Net income Trend:
for the 4 quarters starting December 31, 2009: Net income was 251,000; 791,000; 1,911,000; 3,859,000 respectively. That is an increase over the last 4 quarters of 215%, 141.6%, and 102% respectively. There are no typos here :).
Profit Margins:
Profit margins have seen a slight down trend since the 2nd quarter but are still at obscene levels. for the 4 quarters starting December 31, 2009: Profit margins were 53.9%, 56%, 50%, and 49.78% respectively.
Acid Test Ratio:
for the 4 quarters starting December 31, 2009: The liquidity ratios were 2.74, 3.10, 2.03, and 1.72. While ZAGG has lost some of it's liquidity it is still not at a level to be concerned about in my opinion.
Inventory Turnover:
for the 4 quarters starting December 31, 2009: the Inventory turnover ratio was 3.08, 1.97, 2.425, and 2.22 respectively. While there was a sharp decrease from the very high levels in the beginning of the year, this ratio appears to have stabilized at a confortable level. Meaning the inventory increases are due to an increase in demand and not due a slowing in sales, at least for the latter 3 quarters.
Now for the one of the most attractive ratios for Zagg.
The Debt to Asset ratio:
for the 4 quarters starting December 31, 2009: The debt to asset ratios are 0.27, 0.25, 0.36, and 0.39. While there has been a modest uptrend in this ratio, it is still at a very low level. This means There is very little risk at this point of Zagg going under due to defaults on it's debt.
This brief analysis reinforces my decision to be long on ZAGG using recent fundamental information as a guide to maintaining my investment. Good luck to all.
Hope this helps.
