worth a little research

Over any 12 month period I read 100’s of reports & very few companies have that WOW factor. On reading NTC (Netcomm Ltd) recent Full Year Results I was drawn to further research on the company.
Positives:
1. NTC revenue grew by 305% in the last 12 months to $78.4m (not a bad effort during the GFC)
2. Profit after tax was up 175% to $5.691m.
3. NTC appear to be a global leader in 3G mobile broadband technologies aiming to grow its international customers
4. NTC enjoyed improved profit margins on its revenue up from 4.7% in 2008 to 7.89% in 2009
5. EPS on a diluted basis grew from 2.38 cents in 2008 to 5.96 cents in 2009
6. NTC also displayed improved employee productivity based on the revenue earned in 2009
7. Net assets grew from $9.084m. in 2008 to $15.876m. in 2009
8. Cash flow from operations grew from a negative of $1.059m in 2008 to $8.934m in 2009
9. NTA per share also grew from 9.3 cents to 11.2 cents in 2009
10. NTC look set to reinstate the payments of dividends with an Announcement within 14 days of their 20/8/2009 ASX Report
11. NTC has a very experienced management team & board of Directors (refer 2008 Annual report)
12. The Managing Director Mr. D J Stewart is also the largest shareholder (Brad Industries P/L 22.6m in 2007), so his interests are aligned with shareholders interests
13. The share price chart shows a increased volume & maybe the start of a breakout as the market starts to rerate this stock.
14. Given its current price of 31 cents, it is only trading on a P/E of 5.2 , if it continues its growth story it is easily capable of trading on a P/E of say 8 which would take it up to around 47 cents
15. It looks like the institutions are not yet on Netcomm’s share register, so it could be very interesting when they start buying
16. No large debt commitments on the balance sheet
Negatives:
1. Looks like a large seller has been in the market recently i.e. Yellowtuna Networks Ltd (refer ASX announcement 4/9/2009, sold down from 9.2m (8.95% ) to 7.8m. (7.6%))
2. In the coming year NTC will have to make allowances for greater tax payments in its cash flow statement than appeared in 2009
3. Revenue appears to have dropped to about $38.2124m. in the second half year as compared to $40.259m in the first half year, with a slight drop in margins from 8.34% to 7.443% on revenue
Conclusion:
Happy to become a shareholder based on this little company continuing with its growth story in the 3G broadband market over the next 12 months. Please do your own research on NTC as no investment advice is given.
Sources:
1. ASX announcements 20/8/2009 & 4/9/2009
2. ASX announced Half Yearly for December 2008 on 12 /2/ 2009
3. ASX Annual Report 2008
4. Netcomm website: http://www.netcomm.com.au

Regards
Buffett