The Razor's Edge

2-Year Price History

A Word Of Caution

Stocks trading for less than $1 are loosely termed "penny" stocks. Emerson Radio Corp. (MSN) 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 Emerson Radio Cp before making an investment decision.

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

MSN 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 MSN 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 0.39x and 0.16x respectively.

Utilizing this range we can see that MSN’s current Price to Sales per share ratio of 0.09x is significantly below its average levels historically. In fact, with a current price of $0.70, MSN is a full 68% 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 MSN.

MSN Cash Earnings

MSN is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all company's or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at MSN, it is our goal to provide a balanced view of the stock as an investment, because no analyst can know exactly where management's current focus and direction may be at any one time. Therefore, we utilize a neutral Cash Earnings outlook for MSN until more appropriate positive data can be analyzed.

MSN Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure on a company's inherent expectations. MSN is not paying a dividend at this time, nor do they have a history of paying a dividend for the last 10 years plus. Therefore, we are not utilizing the dividends portion in our study. If MSN initiates paying a dividend, we will begin to factor this into the Ockham approach.