Neo Material Technologies (NEM)

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Neo Material Technologies (NEM)

Post  Max on Sat Jan 08, 2011 9:09 pm

This is a very quick fundamental analysis of Kucher's pick.

125M shares outstanding

$0.53 per share cash
$1.66 per share current assets
$2.02 per share Book value
$0.23 per share debt (difficult to calculate, so I included all liabilities except A/P)
2.73x Current Assets / Current Liabilities

$0.48 per share EPS

((($7.69 current price - $2.02 book value) / $7.69 current price) x (100 / (($7.69 current price - $2.02 book value) / $0.48 EPS)))
=8.5% expected annual ROI
(this highly simplified formula takes into account the idle cash invested in book value and ROI is basically calculated as the # of years of EPS in order to return 100% of the stock price in excess of book value. Thereafter, the earnings are expected to continue at the same rate, so the ROI should continue at the same rate.)

Not bad. Financially looks in good shape and if you are expecting prices/income to increase, then you could have a good pick.

I know nothing about the prospects for this company, so in the worst case if they were to have losses and have to liquidate, the stock would bottom out around book value of $2 per share. The stock is trading as though the earnings are secure.

Summary: With a little more research, I could learn to like it.

Max
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Re: Neo Material Technologies (NEM)

Post  jkucher on Thu Jan 13, 2011 9:35 pm

Here is the summary of what Neo Materials materials are used.

Neo Material Technologies Inc. is a producer, processor and developer of neodymium-iron-boron magnetic powders, rare earths and zirconium based engineered materials and applications, and other rare metals and their compounds through its Magnequench and Performance Materials business divisions. These innovative products are essential in many of today's high technology products. Magnequench's Neo powders are used to produce bonded magnets, generally used in micro motors, precision motors, sensors and other applications requiring high levels of magnetic strength, flexibility, small size and reduced weight. Rare earth and zirconium applications include catalytic converters, computers, television display panels, optical lenses, mobile phones and electronic chips. The Company's rare metals products are primarily used in the wireless, LED, flat panel, turbine, solar and catalyst industries.

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Re: Neo Material Technologies (NEM)

Post  jkucher on Tue Jan 18, 2011 11:33 pm

I bought yesterday for $7.5, it's already at $8.49, Hopefully this trend continues

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Re: Neo Material Technologies (NEM)

Post  Max on Wed Jan 19, 2011 2:19 am

Nice gain. I should have bought, but still not familiar enough with the company.

Max
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Re: Neo Material Technologies (NEM)

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