Aastra Technologies

Aastra Technologies(TSX:AAH)is in the telecom equipment industry and closed today at $22.78 per share. With 14.03 million shares outstanding, the market capitalization is $320 million. Cash and short-term investments total $104 million, while debt is just $23 million. So...enterprise value is: 320 - 104 + 23 = $238 million.

Cashflow has been impressive. The past 5 years, operating cashflow has averaged $59 million, while capital expenditures have averaged only $14 million. So that's about $45 million in free cashflow annually. Not a bad return on $238 million dollar investment!

A lot of the free cash has been used to make acquisitions and revenues have grown from $500 million in 2005 to $833 million for 2009. However, management has been pretty good at returning some cash to the shareholders, buying back about 20% of the outstanding shares over the past few years and paying a dividend of 20 cents per share quarterly for a yield of 3.4%.

So cash generation and utilization have been good, especially relative to its current enterprise value.

On top of that the balance sheet looks fine. Net current assets after deducting ALL liabilities (Graham's net-net) are $9.78 per share.

This site is all about stocks that are cheap relative to cash and assets, and Aastra fits the bill.

Be sure to your own due diligence before making any investments. And of course, I own shares in Aastra.