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Motley Fool Hidden Gems / HGS: CNS


Subject:  some CNS thoughts Date:  5/18/2004  12:51 PM
Author:  illini1990 Number:  372 of 766

CNS is trading today around $9.50 as of this posting. This is the lowest
the stock has been since last July. However, now the company has $49M
in cash instead of $41M, which translates to $3.50 a share. Also, the
dividend now stands at 0.2/9.5 = 2.1%. It's trading at 2.4 times book
value. Still no debt. Matt Richey valued the rock-bottom value of
the stock in the September issue at $9.78 assuming no growth.

The downside? Some question marks about growth, which is understandable.
The ability of management to market Breathe Right successfully for
growth is under question, as well as develop new products (although
the fiber tablets and snore relief seem to be doing at least okay).

I think what's attractive about this stock is it's relative safety and
dividend. It somewhat resembles FDP in that it has a good margin of
safety, a decent dividend, but questionable long-term growth prospects.
This makes it at the very least a decent short-term market hedge, with
a decent (but certainly not guaranteed) upside.

If this goes much lower, I will probably buy even more. What price it
will take for me to buy I still uncertain of, but it's getting darned close.

Thanks for reading! :)


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