Dataram (DRAM): Micro-cap Name Selling Below Cash
Dataram (DRAM) is an idea I want to credit to a comment left by RJM in my Stocks Selling Below Cash post. The company is extremely small with a market cap of just over $10M, no debt and sells below net cash. Although the company doesn’t have any debt, DRAM does have operating leases which I account for in my analysis. Shares sold off sharply after the company canceled its dividend in June of 2008, although in hindsight shoring up the balance sheet seems like a good decision. The company isn’t bleeding cash and has a moderately healthy balance sheet.
Company Description
Dataram describes itself in its most recent 10-K as a developer, manufacturer and marketer of large capacity memory products primarily used in high performance networks and workstations. DRAM provides customized memory solutions for original equipment manufacturers (OEMs) and compatible memory for computers manufactured by Hewlett Packard (HPQ), Sun Microsystems (JAVA), IBM (IBM), and Dell (DELL). The company also manufactures a line of memory products for Intel (INTC) and AMD (AMD) motherboard based servers for sale to OEMs and channel assemblers. The company has been around for about 41 years. DRAM’s largest 10 customers accounted for 43% of sales in 2008, while DRAM’s largest customer accounted for 14% of sales. US customers account for 70% of sales, Europe accounts for 20% of sales, and Asia accounts for 10% of sales.
Operating Leases
PV |
K= |
7% |
|||
2009 |
411,000 |
384,112 |
|||
2010 |
418,000 |
365,097 |
|||
2011 |
371,000 |
302,846 |
|||
2012 |
34,000 |
25,938 |
|||
Thereafter |
0 |
0 |
|||
Total |
1,234,000 |
1,077,993 |
|||
Operating Lease/Share |
$ 0.12 |
Balance Sheet Analysis
Stats |
1/31/2008 |
4/30/2008 |
7/31/2008 |
10/31/2008 |
|
Cash/Share |
2.05 |
1.99 |
1.84 |
1.81 |
|
% Change |
7% |
-3% |
-7% |
-2% |
|
Adjusted Cash/Share (Net) |
1.94 |
1.88 |
1.74 |
1.70 |
|
Current Ratio |
16.00 |
9.98 |
10.09 |
11.15 |
|
% Change |
36% |
-38% |
1% |
11% |
|
Adjusted Debt/Equity |
4% |
4% |
4% |
4% |
|
Inventory Turnover |
2.10 |
2.13 |
2.57 |
2.43 |
|
% Change |
-24% |
1% |
21% |
-5% |
|
Receivables Turnover |
1.82 |
1.92 |
2.06 |
1.92 |
|
% Change |
-22% |
5% |
7% |
-7% |
|
Cash % of Current Market Cap |
134% |