Taxing Decision

I neglected to mention over the weekend that there were two new stocks in the mechanical top 30 screen: MTXX and JTX. I find both of these to be rather interesting. I did own MTXX earlier this year, but sold it prematurely (thankfully). Their problems are well-chronicled with their nasal spray being pulled off the market due to some people losing their sense of smell. Everyone is running around like their hair is on fire about MTXX right now... but their fear could be an opportunity. They have $4.20 a share in cash and trade 28% under book value. The question will be how much will their income drop? I ran my calc routine assuming the income drops in half:

		mtxx
+	Operating Income After Depreciation	12.16
-	Minority Interest - Income Account	-
=	Income for Calculation	12.16
	Diluted Shares Outstanding	9.400
	Share Price	5.50
+	Market Cap Calc	51.70
+	Preferred Capital	-
+	Debt in Current Liabilities	-
+	Long-Term Debt	-
	Cash and Short-Term Investments	40.02
-	Excess Cash	40.02
=	Enterprise Value	11.69
+	Property Plant and Equipment - Net	4.13
+	Receivables	16.12
+	Inventories	7.74
+	Other Current Assests	3.67
+	Working Cash	-
-	Accounts Payable	3.01
-	Current Liabilities - Other	12.47
=	Invested Capital	16.19
	Earnings Yield	104%
	ROIC	75%

I didn't pull the trigger today on MTXX, but I am intrigued. If there is another sell-off, I might take a flier around $5.20. We'll see.

JTX is a stock I know well. I have owned them twice as an MFI stock in the past, and it wasn't exactly a rewarding experience. However, I do wonder if they have hit bottom. They have a brand new CEO and the stock popped about 40% when they hired the new guy (or was it because the old guy left?). The stock settled back down after a so-so earnings report. They have said they are going to look at making some major changes, might be a chance to get in on ground floor... I still think this franchise can get back to being a $20 stock under good managment... heck everyone has to do taxes, even with our new president. So I did buy-in today at $5.54, looks like a good entry price. My one concern is they have more debt than I'd like. Here's the calc worksheet for JTX:

		jtx
+	Operating Income After Depreciation	57.47
-	Minority Interest - Income Account	-
=	Income for Calculation	57.47
	Diluted Shares Outstanding	28.570
	Share Price	6.01
+	Market Cap Calc	171.71
+	Preferred Capital	-
+	Debt in Current Liabilities	-
+	Long-Term Debt	232.00
	Cash and Short-Term Investments	0.31
-	Excess Cash	0.31
=	Enterprise Value	403.40
+	Property Plant and Equipment - Net	27.69
+	Receivables	30.84
+	Inventories	-
+	Other Current Assests	19.80
+	Working Cash	-
-	Accounts Payable	33.69
-	Current Liabilities - Other	10.37
=	Invested Capital	34.26
	Earnings Yield	14%
	ROIC	168%