• the company has been profitable 15 out of 19 past quarters, and virtually all of the loosing quarters were due to one time events; • 2008 EPS = +.02$/share and the company expects double digit growth in 2009 due to second half of the year project completion, as milestone collection is uneven and lumpy, with preset targets triggering large payments; • accounts receivable 4.2M$ ( 0.17$/share); • working capital 1.9M ( 0.07$/share); • book value 1.5M$ (0.06$/share, no goodwill & intangible); • market cap stands at 1.3M$; • Gross margin 52%; • no lawsuits; • insider activity resurfaces and share buyback is in place (Normal Course Issuer bid); • long term debt is not an issue at only 510k; • Recent announcement of joint venture will Al Mozoom in the middle east thrust, aiming for larger contracts which could/should move NTG outside the box;
Combined with better market sentiment across the board, should NTG live up to the expectations, attractive gains are sought when one contemplates the valuation metrics described above. Any equity position taken by Saudi business men/partners(prior or subsequent to large contracts with Al Mozoom) would serve as a stock price catalyst, in my opinion only. And it is a known fact the CEO is touting foreign investors in the middle east.
The CEO is taking advantage of bargains offered during tax loss selling season, as is the case every year for many stocks. See the latest insider transactions on record.
NTG Clarity Networks Inc. (NCI) As of December 9th, 2009
Dec 09/09 Dec 09/09 Zaghloul, Ashraf Direct Ownership Common Shares 10 - Acquisition in the public market 47,000 $0.030 Dec 09/09 Dec 08/09 Zaghloul, Ashraf Direct Ownership Common Shares 10 - Acquisition in the public market 28,000 $0.030
Q3 Summary
• Revenues almost doubled in Q3 versus 2008, even in the financial crisis; and don’t forget NTG Clarity has signed a joint venture with Al Mozoom, thus paving the way for larger projects in the middle east going forward;
• One should also understand that revenues this year have come mainly from the middle East; when the financial crisis settles, people should remember that they use to perform work in North America and Europe as well;
• In Q3, the company was profitable once again, and had it not been for non-recurring issues, they would have declared net earnings of +.02$/share; the prior contracts taken effect now were signed in US dollars, and the weakness of the US dollar in the financial crisis has played against them. They’re also being cautious and adding provisions for bad debt for 75k;
• Expenses have dropped more than 20% from Q3 2008, even though revenues almost doubled. This is a significant management effort to contain costs;
• The company has a share buyback in place, but has not acted on it yet. When the gates open, shareholders should be rewarded;
• The new overseas office NTG Clarity Arabia is up and running;
Profitable even with significant non-recurring issues (US dollar weakness), increasing revenues, enticing gross margins, cost containment, initiatives for larger projects taken, share buyback in place…and trading at a ridiculous 1M$ market cap, in my opinion, patient holders have a clear shot at a multi-bagger.
Of course, once again, the above is simply my personal understanding and not to be construed as investment advice. I’m not a broker, promoter, director, manager or employee of the aforementioned company, just a shareholder. Some typos could have occurred , do your own due diligence.
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