4/29/2014

Outlier … Boring Value Thought


Far from perfect and I don't expect this small but consistent dividend micro cap stock to move much in the near term. But its worth watching.



Richardson Electronics Ltd. (RELL) ,“Richardson Electronics is a provider of engineered solutions, power grid and microwave tubes and related components, and customized display solutions.” Source Morningstar


Why makes RELL an outlier? 






Strong financial position,healthy improving gross margins from product mix and management's focus,  no debt, near 3 year lows for dividend yield, p/s and p/b. Historically and industry cheap over the prior 3 year period. 
Value institution holding or adding shares Royce, RGM Capital, Gates Capital Management, Paradigm Capital Management, Gates Capital Management.
Three facilities owned and 29 facilities leased. They own corporate facility and largest distribution center, which is located on approximately 96 acres in LaFox, Illinois and consists of approximately 242,000 square feet of manufacturing, warehouse, and office space. 





















Market Cap: 141.23M , Enterprise Value:  18.05M
Price/Sales:   1.02 , Price/Book : 0.79
Enterprise Value/Revenue:  0.13
Enterprise Value/EBITDA: 14.47
Qtrly Revenue Growth (yoy):  -2.20%
Gross Profit (ttm):  41.54M , EBITDA (ttm):  1.25M
Total Cash:       130.48M
Total Cash Per Share:     9.30
Current Ratio:    10.32
Book Value Per Share:    12.74
52-Week Change:   -9.61%
52-Week High: 12.27 , 52-Week Low:    10.00
Shares Outstanding:  14.02M , Float:  7.71M
% Held by Insiders:  22.43%
% Held by Institutions:     70.00%

Short % of Float: 2.50%

QuarterFiscal 2014 Results:

“We remain committed to profit improvement with growth initiatives that allow us to leverage our global infrastructure. While we are not satisfied with our current financial performance, we are pleased to see pockets of growth in key geographic areas and markets. Sales in both the Asia and European regions improved versus the prior year. In terms of key markets, we are seeing growth in industrial markets as well as the automotive markets which utilize laser cutting equipment,” said Edward J. Richardson, Chairman, Chief Executive Officer and President.
“We believe our fourth quarter sales should be in the range of $34 to $36 million. We continue to focus on acquisition targets, and to invest in key initiatives such as vacuum capacitors and our new product development team focused on microwave solutions. Both take advantage of our global infrastructure and provide significant opportunity for sustainable growth over the long term,” said Mr. Richardson.
“We believe our fourth quarter sales should be in the range of $34 to $36 million. We continue to focus on acquisition targets, and to invest in key initiatives such as vacuum capacitors and our new product development team focused on microwave solutions. Both take advantage of our global infrastructure and provide significant opportunity for sustainable growth over the long term,” said Mr. Richardson.

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