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.
![WEMUlogo[1]](http://theindependentinvestor.com/wp-content/uploads/2009/04/WEMUlogo11.gif "WEMUlogo[1]")
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…
