FEA said it's not an ordinary MIS company - it's "vertically integrated" - but it's not true. According to its 2008 annual report, its MIS segment contributed $69.8m to the total EBIT of $74.4m - it's more than 90%!
Having debts of $154.3m against "net assets" of $297.7m at 31/12/2008, its debt/asset may not look critically high at 52%, but with a total market cap of only ~$65m, the debt/market_cap = 237%, which is about the same or even worse than GTP/TIM a year ago.
FEA said its net asset backing was 73c/share, well above its share price of 16c at today's close - this looks just like in the last a few months of GTP/TIM.
The problem is that all those "net assets" numbers are deliberately inflated to get bank loans. As soon as gone belly up, even banks can get their money back.
FEA Price at posting:
11.9¢ Sentiment: Sell Disclosure: Not Held
