Posts Tagged ‘buy recommendation’

MCZ – Initiation of Buy Recommendation

By: admin | Date posted: 12.13.2006 (12:00 am)

MCZ- Mad Catz Interactive (American Stock Exchange) (Closing Price $0.65)

Mad Catz (ticker: MCZ) is a speculative play on the release of the next generation game consoles (the XBOX 360 and the Playstation 3). This company has improving fundamentals and will benefit from the hype surrounding the new game consoles.

Mad Catz sell peripherals such as controllers, racing wheels, and console accessories. Consumers will buy these products when they purchase their new consoles. The initial release of the consoles will help increase sales for MCZ but the biggest benefit should come after a year or so after the consoles have built a consumer base. (more…)

SVLF – Initiation of Buy Recommendation

By: admin | Date posted: 12.13.2006 (12:00 am)

SVL – Silverleaf Resorts (American Stock Exchange) (Closing Price – $4.20)

Silver Leaf Resorts is the epitome of an underfollowed and undervalued stock. I first came across SVL a little over a year ago by using a stock screener. It had good earnings and was trading at half its book value. The stock was a no brainer at the time but unfortunately I had no money to invest in it. Silverleaf promptly shot up from about a dollar fifty to over four dollars. I wish I had bought some then but it is still a bargain now.

SVL’s current forecast for 2006 is for net income of 0.53 to 0.56 per diluted share. If you use the lower end of their earnings guidance and today’s closing price of 4.2 you get a PE ratio of 8 (4.2/0.53 = 8). They are guiding towards earnings growth of 16% next year, which I think is conservative. If you use their earnings growth as a measure of what the PE should be (16) this values the company at $8.2. While the PE ratio is a subjective valuation measure, I believe SVL is currently undervalued. (more…)

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