Fantastic Earnings out!Yet once again CRY has produced a fabulous earnings report. They far exceeded their guidance (4-5 cents), again, and the analyst consensus (4 cents). Q3 EPS climbed 71% over last years Q3. YTD EPS up 42%. They have bought back nearly half a million shares in 2005 and still hold $92M USD in cash. Net earnings of $5.1M but cash flow over $14M and the best part for me is the net margins are steadily climbing back up in recent Q's. The net margins for Q3 2005 were 24.3%. The amazing part is that this is seasonally the weakest Q of the calender year. The guidance is also terrific and well above consensus by 4-5 cents and they always beat their guidance.
This company has enviable fundamentals and yet they get little respect. The share price is controlled by a herd of market sheep that don't have a clue what they are doing or how to analyze a business. The market either loves it or hates it and the stupid thing is that little has really changed except market perception. The Betfair effect will be somewhat gradual and will be over shadowed by the organic growth. Since Lewis Rose took over as CEO, they have performed magnificently. They have done everything right and exceeded expectations consistently. Kudos to Mr. Rose and his team.
It is worth noting, however that the management team has certainly looked after themselves with the stock option plan. However that gets factored into the EPS & net income so it is difficult to complain too much.
We should see about $1.45 USD in EPS for 2005 (Dec). This gives a PE multiple of 11.6....unbelievably cheap. If you subtract out the net cash, it moves to about 8. Have a great day, Cheers!!!