As for valuation. It is a simple cash flow analysis because it pretty much pays out its cash flow as a dividend. It sells for $2.98 and its quarterly dividends are .09 a quarter (past 2 years - .075 the one year prior) and has a special annual dividend of $.30. So it pays .66 a year which is a dividend yield of 22.15%. Its main patent expires in November 2016 so I used 7 years in cash flow assumption and assumed the company being worthless afterwards, but they still could sell their line of contacts albeit at a lower price. So if you discount future dividends assuming 5% growth rate (they have averaged 10% growth a year in operating cash flow) using a discount rate of 4% (average inflation since they have no debt other than accts. payable) you come up with a net present value of $4.57, which is a 53.35% discount to today's price. If you use 10% growth and the same 4% discount rate the stock is worth $5.29, which is a 77.52% discount to today's price Plus this looks like it might be a one month hold and sell before the exdividend date of the special divided. If you look at the stock price, it normally starts to climb in early August late July because its ex-dividend date for the special dividend is August 10 (they declare August 1st). It looks like in the past 3-4 years every late July to August the price jumps by over 50%.
$0.0 (07/16/09)
