NASDAQ:TAIT – 1,21 USD
Taitron Components Incorporated (Taitron) is a distributor of electronic components and supplier of original designed and manufactured (ODM) electronic components (ODM Components). The Company is engaged in the business of providing distribution and services for electronic components. The Company’s product offerings range from discrete semiconductors to electronic devices. The Company also offers engineering and services, focusing on providing contract electronic manufacturers (CEMs) and original equipment manufacturers (OEMs) with ODM services for their projects (ODM Projects). The Company offers ODM Components under the private label brand TCI through manufacturing partners. The Company’s products include Rectifiers, Diodes, Transistors, Optoelectronic Devices and Passive Components. The Company’s Taiwan and China locations provide support for inventory sourcing, purchases and coordinating the manufacture of its ODM Components and ODM Projects. – Google Times.
1. Adequate margin of safety (criterion a) or b) must be met):
- P/NCAV < 1x
- 0,66x ✓
- EV/Operating earnings(5y&10y) < 3x
- 5y = N/A X
- 10y = N/A X
- Negative operating earnings 5y & 10y.
- P/NCAV < 0,75x
- 0,66x ✓
* I have adjusted NCAV to reflect the recent dividend of 0,03 USD per share.
2. The risk of permanent loss is low:
2.1 The risk of bankruptcy is low (criterion a) or b) must be met):
- Debt/Equity < 25 %
- 7 % ✓
- Z-score ≥ 3
- 3,2 ✓
2.2 The company’s business model is not totally unprofitable (criterion a) or b) must be met):
- Positive retained earnings:
- 4 M$ ✓
- Positive aggregate operating income for the last ten years:
- -7,4 M$ X
3. The company does not have a shareholder unfriendly capital allocation:
- Shareholder yield TTM ≥ -2 %
- Dividend yield TTM = +4,1 %
- Net buyback yield TTM = +0,2 %
- Net debt paydown yield TTM = +7,5 %
- = +11,8 % ✓
- NCAV-burn rate Qx – Qx-4 (YoY) and Qx – Qx-1 (QoQ)
- Qx – Qx-4 = +0,7 %
- Qx – Qx-1 = +0,1 %
- The CEO (Stewart Wang) owns 61,5 % of the company.
- Insiders together own 78 % of the company.
- Worth of shareholding / salary + bonus
- CEO = 7x.
- Insiders = 8x.
- See DEF 14A link above.
- Other analysis of TAIT:
- TAIT is a nano-cap stock: 6,8 M$ in market capitalization. The trading is very illiquid.
Disclosure: The author is long NASDAQ:TAIT when this analysis is published.