Friday, March 20, 2009

Gennum Corp 2

As I said yesterday, I am reviewing this stock (TSX-GND) because I follow it. In looking at Insider Buying and Selling, I see that the CFO, CEO and some directors have increased their share holdings. There is mostly Insider Buying. I also note that Gennum Corp is buying back their stock. I have updated my spreadsheet with estimates. Do not forget that the purple in my spreadsheets are only estimates and as with all estimates can be very wrong.

Looking at the ratios, with the current price, the P/E is 14.4 against a 5 year average of 25.6. The current yield is 3.9% against a 5 year average of 1.5%. These are both very good changes. Also, the Price/Book Value ratio is .98 against a 5 year average of 3.16 and the Sales/Price ratio is 1.14 against a 5 year average of 3.46. These are also good changes showing that the current price is a good one. Also, as I said yesterday, the current price of $3.60 is lower than the 2008 Graham Price of $7.92 and potential Graham Prices of $4.98 of 2009 and $6.28 of 2010.

The other good thing about this stock is the strong balance sheet. The Liquidity Ratio and the Asset/Liability Ratio are both very good at 4.63 and 5.37, where anything over 1.50 is a good figure. The accrual ratio is also negative, and this also points to a good current price.

In looking the ratings given this stock by analyst, there are Strong Buys, Buys and Hold Ratings, with the consensus rating being Hold. The reason for the Hold ratings is that no one expects this company’s earnings to be good in 2009. They also expect that Revenues will decline for 2009. So what we have here is the stock at a good price, but with worries that its earnings and revenues are going to fall. The risk level for this stock is high, so if you buy such a stock, you have to be prepared to be holding a very risky stock.

In looking at the charts, this stock peaked in the last bull market and it has been trading in a band until the latest bear market. Since this bear market has started, it has only gone down.

Gennum Corporation designs innovative semiconductor solutions and intellectual property (IP) cores for the world's most advanced consumer connectivity, video broadcast and data communications products. Leveraging the company's proven optical, analog and mixed-signal products and IP, Gennum enables multimedia and data communications products to send and receive information without compromising the signal integrity. A recognized award-winner for advances in high definition (HD) broadcasting, Gennum is headquartered in Burlington, Canada, and has global design, research and development and sales offices in Canada, Germany, India, Japan, Korea, Mexico, Taiwan, the United States and the United Kingdom. Its web site is See my spreadsheet on this company at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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