5-Star Stocks Poised to Pop: Nam Tai

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, electronics manufacturing specialist Nam Tai Electronics (NYSE: NTE) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Nam Tai's business and see what CAPS investors are saying about the stock right now.

Nam Tai facts

Headquarters (founded)

Macao, Macau (1975)

Market Cap

$189.5 million

Industry

Electronic manufacturing services

TTM Revenue

$577.9 million

Management

Founder/CFO Ming Kown Koo
President/CEO Karene Wong

Return on Equity (average, last three years)

12.5%

Competitors

Flextronics International (Nasdaq: FLEX)
Jabil Circuit

CAPS members bullish on NTE also bullish on:

General Electric (NYSE: GE)
Johnson & Johnson (NYSE: JNJ)
Apple (Nasdaq: AAPL)

CAPS members bearish on NTE also bearish on:

Ford Motor (NYSE: F)
D.R. Horton (NYSE: DHI)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 818 of the 845 members who have rated Nam Tai -- some 97% -- believe the stock will outperform the S&P 500 going forward. These bulls include Gtrinvestor, who is ranked in the top 0.1% of our community, and pick compiler AllStarPortfolio.

In May, Gtrinvestor tapped Nam Tai as a compelling balance-sheet bargain:

Stock is trading for less than its cash on hand. Yes, contract manufacturers are going to get hit during these hard economic times for its current customers, but it may pick up new business with companies trying to shed assets and "non-core" activities such as manufacturing.

In a pitch from two weeks later, AllStarPortfolio (using a pick and pitch from All-Star bullishbabo) elaborates:

Nam Tai Electronics earned money every year for the past 10 years, and has had only a handful of quarters with negative earnings in its history. For a small electronics manufacturer and designer, that's an impressive history of profitability...

Take a look at the 3/31/09 balance sheet, and you see $5.14 per share in cash. This stock trades below its cash per share. As an additional bonus, this company has zero long-term debt and its cash alone covers all liabilities.

Before 2009, [Nam Tai] paid a dividend for at least 10 years straight. Not long after [Nam Tai] cut its 2009 dividend, the stock price tanked. It's not a guarantee, but I'm willing to bet that [Nam Tai] reinstates its dividend when economic conditions improve. [Nam Tai] is cheap even without considering the juicy dividend it used to pay, but the dividend is a nice future bonus.

What do you think about Nam Tai, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Nam Tai is a Motley Fool Global Gains pick, Johnson & Johnson is an Income Investor choice, and Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 08, 2009, at 10:43 AM, pondee619 wrote:

    "On May 05, 2009, at 2:42 PM, TMFEZMagic wrote:

    Hi pondee619,

    Thanks for reading and the great idea.

    We're currently in the process of creating a CAPS player to track all of the "Poised" and "Plunge" articles.

    We should have the player set up in no time, so stay tuned!

    Brian"

    BRIAN:

    Under what name are your "Poised to" stocks listed in CAPS? thanks

    PS: could anyone at the Fool forward this to Brian? I don't think he looks at his articles, or the comments thereto, once he writes them.

    Thanks:

    I see that you are back from the holiday weekend. You have not responded to my many requests for this "new" players name. You said that you would be creating said player "in no time".

    Are you just lazy, inconsiderate or lying about setting up the CAPS player? Or, could it be, that you ran a trial of said player and found how poorly it is going, putting the lie to the premise of your series?

  • Report this Comment On July 08, 2009, at 12:58 PM, JJP69 wrote:

    Toyota and Honda did get taxpayer assistance, from the Japanese people for both the recent econimic situation and the development of advanced technologies. Also don't forget the gifts by the local states for the transplants. Here in Washtenaw Co, MI Toyota won't pay any real estate taxes for 10 years on their new facility. Not counting the fact that their bid was half of what a local land developer was willing to pay.

    So yesterday Ford = Bad, today Ford = Good. How does your data from "impartial" sources and "independent" research firms vary so much?

  • Report this Comment On July 08, 2009, at 1:54 PM, kinnedie wrote:

    Nissan just received $1.6 billion from the American tax payers, to upgrade their Tenn. facility, that originally cost about $750 mil. to build in the 80's! The money was originally funded in 2007, for American automakers, to develop fuel efficient vehicles. Since GM and Chrysler don't qualify the charity has been extended to their replacements, the offshore manufacturers. Their charity also extends to Toyota, by taking GM out of the truck business and encouraging the reopening of the MI and TX Tundra factories. "THE BEST INVESTMENT IN THE WORLD IS AN AMERICAN POLITICIAN" the former Nissan CEO.

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12/2/2009 4:00 PM
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NTE $5.39 Up +0.04 +0.75%
Nam Tai Electronic… CAPS Rating: *****
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