An analysis of a stock Zumiez INC

If you are wondering about the company no to worry I also thought I had it wrong just don’t confuse it with the word zombies and if that’s funny wait till you see the symbol name it trades with the symbol ZUMZ, sounds like a toddler try to talk may be its first words and exactly why nobody would be caught dead buying such a company worse you should hear what it sells its merchandise action sports related apparel, footwear, accessories and hardgoods, focusing on skateboarding, snowboarding, surfing, motocross and bicycle motocross (“BMX”) for young men and women.obviously don’t expect grandpa to be buying this company or you parents and just by those words it tells you just how much value it is even more amazing is the company has been profitable for 35 years straight that more years than I have been a live meaning it has stood at least 4 recessions including the one that seemed to swallow all the big companies alive well that just about it I didn’t even know prior to reading this annual report that the games are actually called action games I always referred to them as X games as is mostly advertised in ESPN if surfing board or skate boards are your thing I will show you who sell them.ZUMIES has a market cap of of 758.36M and even better it has an enterprise value of 589.53M and an EBITDA ratio of 6.01 in 2012 did an acquisition of Blue Tomato which mainly operate in the European market as strategy to enter the European market an diversify from just the US market.ZUMZ sell for 25.98 but its enterprise value per share is 20.23 this for a company that earned 1.52 per share but wait the company had charges I believe are non recurring though I am not sure of one which is litigation since it had the same litigation issue in 2009 but I will add the all charge offs since in my view they are non recurring which come in at 0.23 add back to earning and you get earning per share of 1.75 keep in mind that this company has been profitable for 35 years as we look at free cash flow in 2010 free cash flow came in at 28.6 falling to 19.3 in 2011 and jumping a high of 42.6 in 2012 this year it came in at 30.9 EBITDA has gone from a low of 17.9 in 2005 to 99.4 in 2014 and this will grow as the company has just entered the European market and it has it that it will open at least 55 more shops in all three markets US, Canada and Europe in 2014 also the management has been buying back shares with speed and they still have 14.6M dollars remaining to buyback more shares that with insiders owning 28% of the shares outstanding means their interest are well aligned with shareholders this is going to my portfolio immediately.More of this on valueinvestingkenya@wodpress.com

Quick question, how do you communicate in the Us?

I don't you see when you look at the financial statements of any company you can easily understand what to look for communication is not key its understanding the company that is the most important thing in investing in the US you get them for free from edgar actually I will be doing an analysis today of a company called majicjack symbol name "call" look it up on yahoo finance

RF Industry Ltd

The company goes by the symbol name RFIL on the Nasdaq stock exchange rfil primarily engages in the design, manufacture, and marketing of interconnect products and systems, including coaxial and specialty cables, fiber optic cables and connectors, and electrical and electronic specialty cables.The company is divided into three divisions Rf connectors and cables assembly,cable unlimited and medical cabling and interconnectors the first two make up more than 90% of sales in the last two years, of course this tells you little of the company and rfil falls in the Microcap with a marketcap of 33 mil that is sub 50 mil cap hence its called a Microcap even better the enterprise value (EV) of 20.13 that tells you something that it has more cash stashed on the balance sheet you should always love it when the EV is less than the more advertised market cap on a per share basis rfil sell for 4.06 and has cash and cash equivalent of 11.9 mil which is 1.5 on a per share basis net of debt which means we are actually buying rfil for 2.56 may I remind you that rfil total assets are made up of 79% of current assets that on a per share comes in at 2.38 net current assets (current assets- total liabilities) and its current assets are made up of assets that have little chance of obsolence.Now lets get to the ratios rfil made 5.5 mil operating cash flow even better it had 5.1 mil of free cash flow so how do you get free cash flow well you need to first figure out what maintainance capex is, well of the total capital expenditure as is on annual reports a percentage of it goes to growth and the other goes to maintaince you need to only subtract the maintainace capex which we illustrate as returning assets at the end of the year as they were at the begging of the year the ball point number is depreciation.On a per share basis rfil free cashflow comes in at 0.62 that massive free cash flow explains why the cash and cash equivalent literally more than doubled over the the last twelve months, I have always said PE is a bad indicator of what a company value is so let me give a real life example with rfil a check at yahoo finance and the PE is stated at 24.4 take out the cash and cash equivalent and the PE drops to 5 you need to understand the accounting rules of the GAAP or IFRS to take advantage of where they fall short rfil had diluted earning per share of 0.46 and for a company selling for 2.56 is a steal not to mention that net current assets stood at 2.38 without taking property plant and equipment into the calculation there is little chance of loss here and rfil is in take over territory here it only needs an industrial buyer attracted by the low EV to set things in motion couple by the more than average dividend yield of 6.9% and of the 18% of the total insider ownership of stock 8% is owned by the six board members so it seems we are sitting on the same side of the table rfil is a buy