The Razor's Edge

2-Year Price History

A Word Of Caution

Stocks trading for less than $1 are loosely termed "penny" stocks. Andrea Electronics Corporation (ANDR) is selling for less than $1 per share. While, we stand by our ratings methodology for long term value investors, often times "penny" stocks will be more volatile. Because many "penny" stocks are lightly traded their stock price can fluctuate because of a single large trade. Also, there is generally less analyst coverage of such "penny" stocks and thus less information from which to base our rating.

Therefore, (and as always), check additional sources and available information regarding Andrea Electronics before making an investment decision.

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

ANDR Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at ANDR through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 6.54x and 1.00x respectively.

Utilizing this range we can see that ANDR’s current Price to Sales per share ratio of 0.50x is significantly below its average levels historically. In fact, with a current price of $0.04, ANDR is a full 87% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for ANDR.

ANDR Cash Earnings

Price to Cash Earnings analysis is inappropriate for this company due to an insufficient positive cash earnings history. Rather than calculating a potentially misleading Price to Cash Earnings analysis, we have chosen to give ANDR a neutral Price to Cash Earnings outlook at this time. However, we should point out that this metric is a significant element in Ockham’s methodology to analyzing the outlook for any company. Therefore, for ANDR, our assessment is now more dependent on the Price to Sales analysis, and investors should be cautious with a company with very limited, if any, positive cash earnings.

ANDR Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. As far as our investing methodology goes, it is not necessary to pay a dividend in order to get a favorable rating, so as for right now ANDR gets a neutral rating for the dividend portion of the model. The company is not currently paying a dividend nor have they in the fairly recent past.