Wednesday, January 18, 2012

Vox populi vox VOXX

VOXX International Corp. (VOXX) is a distributor of consumer electronics headquartered on Long Island just outside New York City.

VOXX's main brand is Audiovox, but it has a lot of other labels for its products, such as RCA, Acoustic Research, Jensen and the newly acquired Klipsch. It also provides OEM components to the auto industry.

So car stereos, remote control units, mobile media, home electronics -- VOXX distributes stuff that's ubiquitous, but you've got to search your head to remember the brand name (the historical RCA being the exception).

In a sense, the voice of the people (in their ears, at least) is the voice of VOXX, but few are aware of it.

VOXX's chart is the most bullish among the 21 stocks added to Zacks top rank today. (See my essay "10,000 Charts" for an explanation of how I screen.) UAN was in second place, and CPWM in third.

The stock began its most recent upswing in early October 2011, at $4.69, and peaked today at (so far) $12.25. That's nearly a three-fold increase that grabs my attention, certainly. The only pause is the rise came during five weeks in November and December.

VOXX gapped up a spectacular $2.12 on Jan. 10, after earnings per share exceeded analyst expectations by 28%, with a volume that day of 855,000 shares -- this on a stock that normally trades below 100,000 shares in a day.

The price ended down a bit on gap day, and has in the five ensuing days risen, and today broke past the gap-day high.

So it's a classic bull chart -- steadily higher highs and higher lows with good news greeted by exuberance. 

Clearly, the rise is future oriented, based on hope rather than past performance. Return on equity is about 8% -- OK but nothing to celebrate. The debt/equity ratio is 0.19, not overly high but not low either. Institutional ownership is 65%, not down in the cellar but certainly with a foot through the cellar door. 

But price to sales is 0.37, which is astonishingly low. Anyone who buys VOXX is getting it for a song.

The low volume precludes any options position under my rules. There are only five strike prices for February, and only one strike has any open interest -- seven contracts. So it's shares or nothing for this play.

The next earnings announcement is May 16.

Decision for my account: I've bought share of the stock.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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