Thursday, August 2, 2007

Hauppauge Digital Inc.

Hauppauge Digital Inc. is a NASDAQ listed security that has been trading in a range between $3.60 and $9.59 over the past year. With 9,958,770 shares outstanding, a recent price of $5.03 gives a total market capitalization of $49,594,675. While there are certainly larger companies, Hauppauge Digital Inc. has definitely earned its place in the pack. Last year, Hauppauge Digital Inc. created $0.38 in earnings for every share outstanding.

Hauppauge Digital Inc. is currently priced by the market at 13.30 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Hauppauge Digital Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.