The Independent Investor

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…

WEMU has shown good growth in share value since covering the company in April, or 74% at its 52 week high of $7.50, but has fallen back after 2Q earnings. New markets have been penetrated through solar module endorsements, such as South Korea with the IEC (International Electrotechnical Commission), the US with UL (Underwriters Laboratories), and six western states with CEC (California Energy Commission) certifications. Since then, management has and still is pursuing a formal listing with either NASDAQ or AMEX. CFO John Ballard stated in the 2Q ’09 conference call that he cannot place a time frame on when a formal listing will occur, but believes it will be “soon”.

WEMU announced second quarter revenues of $10.32 million (51% increase) and net income of $19,299 –decreased by a prior period error. The earnings can be viewed in the positive if you like to see quarterly year over year revenue growth, or otherwise if you were expecting the 2009 goal of $100 million in revenue and $3-$5 million in net income. Solar modules faced a 55% decline in value (down to $2.03 per module), which in turn decreased revenues for the company. The new 2009 guidance given by management is 60 million in revenues and .56 earnings per share (roughly a $2 million net income) based on backlogged revenues. Read more…

PRICE: $4.31

Worldwide Energy & Manufacturing (WEMU) is an American based Chinese contract manufacturing company that specializes in mechanical, electrical, solar panel, and fiber optic production. WEMU has recently expanded into manufacturing its own photovoltaic (solar) panels and has a newly leased plant located in China for manufacturing solar modules. With plans to expand into the US and certain Asian markets this company promises great growth.

WEMU’s 2008 balance sheet reveals a current ratio of 2.25, which I consider healthy for debt. Share structure is tightly maintained with only 3.5 million shares outstanding, and 356,000 in the float (traded by the public). I discovered WEMU when it was at $2.77, or 6.7x earnings. The current market cap is only 11.1 million, which is almost trading at book value.

The newly leased solar facility is capable of producing $224 million at full capacity, which is intended to be filled by the end of 2010. Solar contract manufacturing makes up 67% of the business in 2008, but is expected to account for 80% of revenues in 2009. Income for 2009 is estimated to be $3.3 million net of tax compared to 2008’s net income of $1,459,260. Read more…