I like to see management with some intestinal fortitude. Global Gains recommendation Nam Tai Electronics
The electronics manufacturer saw sales dwindling by 30.6% year-over-year to $102.2 million. In that situation, many a company would take any revenue it could get by running deep-discount sales, conducting slightly softer negotiations, and so forth. Indeed, Nam Tai's gross margin shrank from 13.3% a year ago to just 7% last quarter, which could make you think that there were low-margin sales going on.
But the company rejected thin-margin orders large enough to have a material effect on its LCD panel assembly sales. Weak demand for cell phones, consumer electronics, and LCD screens may damage Nam Tai's sales, but management will not paint itself into an unprofitable corner by signing bad deals.
It's easy to maintain fiscal discipline with a strong balance sheet like Nam Tai's, of course. The company lost $3.9 million in the first quarter, but that's a rare loss in Nam Tai's two-decade history -- and $230 million of cash on hand should easily keep the company afloat through these hard times.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.