1/17/2010

NOOF up 21% Friday

I own shares of NOOF and was glad to see some volume on Friday as the stock moved 20%higher on the day. Review the link below.

the stock has several positive metrics. mean reversion, large cash balance , huge share buybacks when stock was depressed by "Mr Market, material discount to prior 3 -5 years earnings, ownership by several value institutions, huge discount based on P/S or P/B ratios, 04-08 average ROIC of +18%, no shorts.

Please review the link for more data

3 comments:

Chad said...

I also hold NOOF, for some of the reasons you describe:

1) Normalized OI/EV (last five years) quite low
2) large buybacks at attractive prices
3) strong gross margins
4) few viable competitors in the brokering side of the biz.

On the negative side, their main biz of selling/brokering movie packages to cable providers is declining in the US (though growing internationally). The internet has offered access to adult movies at very low cost (and at times free), and that trend will likely continue.

Good luck.

ShadowStock said...

Hi Chad

I’ve introduced NOOF before on my lists in several posts such as

http://shadowstock.blogspot.com/2009/03/creating-shareholder-value.html

$1.43 and other times after

http://shadowstock.blogspot.com/2009/09/significant-company-buybacks-and.html

I agree on all of your comments. One of my main reasons for introducing last night is the market has moved so much there are not many value plays as attractive as NOOF, imo. Even with the negative macro trends eventually a stock becomes cheap enough that they can represent value as you know. So that was my motivation for reintroducing.

Thanks for taking time to comment and contibute your thoughts.
John

Chad said...

Going back through my notes, there are some other concerns that I'm keeping an eye on:

1) Comp. for named execs is not miserly
2) Cash management with the line of credit seems odd, particularly given their penchant for holding abundant piles of cash
3) The profitability of the film production unit is hard to track, and may offer a temptation to overspend.

Obviously though, I am willing to overlook these, given the price paid and my estimate of their competitive position.

I really do appreciate the work that you do here and thank you for it. I looked for some avenue to show more tangible appreciation but couldn't find one. Let me know if you have any suggestions.

At any rate, thanks again.