Profile in Short
The company is a leading probe card and distribution and service solutions provider serving the semiconductor and electronics manufacturing industries (Google if you don't understand...That's what I did.). It provides innovative, engineering-focused solutions to the semiconductor and electronics manufacturing chain. Their customers include global semiconductor companies such as integrated design manufacturers and foundries, as well as the electronics contract manufacturers. Headquartered in Singapore, the company also has operations in China, France, India, Japan, Malaysia, Singapore, Taiwan R.O.C, Thailand, U.S.A and Vietnam.
Based on the Triple S Scorecard (Present Price of $0.370):
Why So Good?
Low Price to Book -This stock caught my eye as I have been looking at deep-value stocks. As of 19 April 2016, it has a very low Price to Book Ratio of 0.465.
Consecutive Net Profit with Dividend - The company has been consistently producing net profit and distributing dividend to shareholders for the last 5 years.
Below Net Current Asset Value Per Share (initially) - At that time when it was priced at 0.300, the stock is priced below its Net Current Asset Value of 0.322. This meant that whatever non-current asset that comes along with the purchase... it comes as Free of Charge!
Passed Triple S Scorecard (initially) - At that time it was priced at 0.300, the company passed the Triple S Scorecard beautifully.
Why So Bad?
Super High Intangibles - I have spotted this company a long time ago. But I hesitate to buy as it has a high intangibles amount. To me, intangibles are "nothing" and do not really has any physical value. It will be dangerous if companies just write them off suddenly.
What it really produce? - After googling, I stay cannot really identify what the company produce. I just know it is something that has to be in Electronics Applications. However, what are the uniqueness of this product that is produced by Ellipsiz, as compared to others?
Sunset Industry - The semiconductor industry is in a very uncertain period. Many companies are going through merger and acquisitions. Furthermore, with technology being ever-changing, will Ellipsiz continue to stay relevant? If it has to continue to stay relevant, then more money will need to be invested in Research and Development. Eventually, the super long term is grey and uncertain.
From the factors above, I bought this stock mainly based on the numbers and it passing my Triple S Scorecard. Nevertheless, even when the stock price is at 0.370 and has failed the Triple S Scorecard now, I will hold on to them and await their next result.
Right now, the stock's Price to Book is still very low with Net Asset Value per share at about 0.70+. If you are looking at Deep Value Stocks, this could be another good pick.
Current Price: 0.370 as of 19 April 2016.
Please do your own due diligence before you invest in this stock.
Do note the author is vested in this stock/company at 0.300.