I may be missing something, but at $.67 per ADR Net earnings (after significant non-cash items such as the foreign-exchange loss), a P/E of 5, and a growth rate of earnings per ADR of close to 25% Elektra is clearly a bargain. Plus this company has a leading brand name, practically no competition (can you name the number 2 competitor?), and the best collection system in Mexico (better than any bank). Does anybody out there have any thoughts to share?
Stock closed at $5 today and when the next person reads this board (which should be in a month or so judging from traffic) look for a close above $6. The EKT stores are packet with holiday shoppers, the peso has stability, and this year private companies have actually paid their employees Xmas bonuses. I'm very positive on the LT prospects of EKT.
Fully agree. Even at $5, the stock is trading at only about 30% of its previous high. More important, the business is solid. The stores serve a huge segment of the Mexican population which would otherwise have to buy in more expensive small mom-and-pop stores. Elektra has done some very smart cross-merchandizing in its stores, for example setting up Western Union MoneyGram outlets in its stores so when Mexicans working in the US send money to relatives back home they pick up the cash in an Elektra outlet. I think the stock has a good chance to get back to the $15-18 range where it was 18 months ago.
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