4/27/2011

Potential Value; Oversold in the Current Market

Sorry for not posting for some time. Many reasons but I have been working on a datamart to uncover short opportunities.

For tonight I was looking for overlooked or oversold value based ideas. It started with EV to revenue and I then compared this attribute to the average EV to revenue from 2006 to 2009. Only those ideas having a lower TTM EV/Revenue compared to the average 06 to 09 period were considered. The thought was finding stocks that have been oversold with a starting point of sales to enterprise value also with YOY quarterly revenue improvements, negative 52 week return, share buybacks over the TTM, strong balance sheet and other measures.  Below are 3 names to consider adding to a watch list.

IRIS: IRIS International Inc

Price = $9.41
EV per share = 8.22
YOY Quarterly Revenue change = 10.60%
Enterprise Value = 143,937,000
EV/Revenue =
FCF/EV = 4.62%

ISSC: Innovative Solutions & Support

Price = $5.37
EV per share = 3.46
YOY Quarterly Revenue change = 41.70%
Enterprise Value = 58,137,400
FCF/EV =9.54%

PSEM: Pericom Semiconductor Corp
Price = $9.17
EV per share = 7.13
YOY Quarterly Revenue change = 13.60%
Enterprise Value = 177,870,200
FCF/EV =.14%



Off the topic the following RISKY idea may interest some investors
 
This troubled deep value idea is MEAD.

MEAD: Meade Instruments Corp

MEAD
Current Price = $3.70


“Meade Instruments Corp., a consumer optics company, designs, manufactures, imports, and distributes telescopes, telescope accessories, binoculars, spotting scopes, microscopes, and other consumer optical products in North America and internationally.”

4.39 million market cap with no long term debt and TTM sales of 25.49 million with a YOY quarterly revenue increase of 18.90%.

Meade is a recognized brand name in the process of restructuring that has been given up by the investing public. So it’s a mean reversion candidate with an uncertain future.

Book value is 9.63,

Insider ownership 33.16%, 12.50% held by institutions,


MEAD is still restructuring and has yet to make break even results. This risky stock is far from a sure bet in this difficult economy for their high end optical products.

Long: MEAD

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