The Independent Investor

I’m looking for 3 big announcements within the next 30-40 days per the last investor conference; Zbox appears to be a 3rd party product that will be sold by Zagg, a new “game” changing product, and of course NASDAQ listing. In terms of the price, I do think we will see a bump up on all the forthcoming news.

However, I just can’t help but think the overall market is inflated currently and we may see a general downturn in the next couple of months. Our political leaders may be calling a bottom of the economy here but we can’t ignore the facts of unemployment (approaching 10%), savings rates are now increasing which impacts consumer spending, tighter credit, foreclosures still to come through 2011, and finally continual de-leveraging of credit card/commercial debt (with correlating defaults).

Zagg has done well despite the market’s overall hiccups, however, that’s not to say it will not be impacted going forward since the price is still trading at higher trailing P/E levels. It will take a steady mind to ignore the volatility to come and just trust that Zagg’s future earnings power is what will point us upward.

ZAGG announced the appointment of an additional member, Ed Ekstrom, to its Board of Directors. Not only will this satisfy NASDAQ listing requirements, but Mr. Ekstrom brings experience from working in executive positions for Hewlett-Packard and Intel. Mr. Ekstrom has served on the boards of several companies and is currently Chairman of the Technology Advisory Board for the State of Utah, as well as a managing director for vSpring Capital, an early-stage venture capital firm.

ZAGG continues to bear good news, earning $0.05 per diluted share in 2Q’09 compared to $0.01 fully diluted in 2Q’08. Earnings guidance provided by the company for 2009 is $38 million in revenue and $0.22 earnings per share.

2Q Developments: Read more…

You may have seen the section in a 10-k report, sometimes hidden way in the back, called “Summary of Significant Accounting Policies –Inventory Valuations”, and wondered what real effect it has on your investment. If the company you are following provides services, then this will have little bearing on net income; however, if the company is heavily reliant on producing or selling physical goods, then inventory methods can have a material (significant) impact on earnings. Read more…

GAXC is a cash cow that is selling at only 4x EBITDA and 5x free cash flow (factors in maintenance capex). A friend of mine (iancassel.com) notified me about this company and I took a position in it at .69 only two weeks ago (current price: .87). They have over 4,000 atm’s nationwide and are becoming masters at cutting costs and improving the bottom line. Next year they expect organic growth within the ATM industry as well as leveraging their current customer relationships by entering the DVD Kiosk business (redbox dvd concept). The value of the atm business alone exceeds $1 per share, however, with growth estimates into next year this company has a lot of upside.