FTG ReduxToday's closing price of 0.42 (up 50% today) is still only 50% of book value. The book value calculated from the FTG balance sheet is 0.84 per share ($29.1 million of assets minus $14.2 million of liabilities = equity of $14.9 million divided by 17.8 million shares = 0.84 per share).
In other words, if FTG were to be liquidated today nominal proceeds would exceed the current trading value by 100%. Of course, FTG would not be liquidated at book value because this calculation does not take into account the value of FTG's intellectual property, technical know-how, employee workforce skills, customer relationships, market position, etc., all of which would vastly exceed the calculated book value of the company.
Historically, the shares were trading around $4.50 per share in 2001 before 9/11 when the downtrend for the whole of the aviation industry started and continues until today. The company was much smaller at that time with total revenue of $30 million or about half of today's revenue. Also, the balance sheet was not in as good condition as it is today. The product line was limited to rigid PCBs and not diversified as it is today with flex PCBs, cockpit lighting, panels and sub-assemblies. There were fewer customers and the approved parts list was less extensive. Today, FTG counts among its customers all of the major aerospace and avionics manufacturers. FTG continues to add to a much expanded approved parts list and has positions on every new aircraft program. FTG is regarded by its U.S. peers as one of their major competitors in the aerospace and defense PCB market. The future for FTG looks to be pretty good.
Yet FTG shares continue to trade a what can only be considered abnormally low levels with no rational explanation and at a fraction of what should be their true market value. This surely must be a case where so-called market wisdom is certainly lacking.