Wednesday, August 8, 2007

Key Tronic Corporation

Key Tronic Corporation is a NASDAQ listed security that has been trading in a range between $3.57 and $7.58 over the past year. With 9,920,390 shares outstanding, a recent price of $4.93 gives a total market capitalization of $49,205,135. While there are certainly larger companies, Key Tronic Corporation has definitely earned its place in the pack. Last year, Key Tronic Corporation created $0.95 in earnings for every share outstanding.

Key Tronic Corporation is currently priced by the market at 5.20 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, Key Tronic Corporation is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.