satyam

Satyam (say), an indian computer outsourcing company, stock price recently plunged because it's ceo wanted to buy two construction companies (completely unrelated to current business) controlled by the ceo's family business for 1.6 billion dollars. However, when investors complained, the ceo abandoned his plans, but the damage had been done. The managment has lot its credibility. However, if you look at the company is very, very attractively valued. It is trading at $8/share. Almost half of the $8, it has in cash. And it supposed to earn almost $1.50/share this year. With a PE of almost 5 and with that much cash on hand and the ability to genearte tons of free cash flow, this is a very cheap stock. I initiated a position at $8.15. Hopefully, they follow their plan do use the cash to buy back shares or somebody takes them over.