A minnow. But a fat minnow, if you ask me.

Taitron Components swims with some sharks in the semiconductor space, operating sourcing in China and Taiwan (!) and, with its 15 employees, distributing that inventory out of its owned Valencia, CA, headquarters to a market capitalization tune of $17mm on a good day. The Chinese division of the company provides engineering solutions and arranges production processes for Original Equipment Manufacturer (OEM) partners. The Company manufactures custom solutions for multi-year projects, but does not have long-term contracts as part of its business model. Its revenue is only roughly 5% Asian, with the remainder being stateside.

TAIT sells into unique (or semi-kitschy, if you prefer) industries like wild animal feeders, DC motor timers, public street light controllers, LED modules, batteries, and universal remote controls. The company shifted its strategy from the “Best Buy” superstore model to a more custom-oriented one, but still carries 12,000 components in inventory for more than 100 suppliers.

Compared to other shares trading publicly, it might run up against NVDA and INTC. However, since it is so small and its distribution solutions so custom, it seems to have been overlooked by the broader market’s run-up and interest in those two names.

TAIT’s financials are where the minnow looks exceptionally fat. While it is merely a distribution company, the firm’s cash balance as of 9/30/2024 was $4.7mm compared to total liabilities of $1.5mm. Market capitalization as of March 2025 was $15.3mm, and Price to Earnings is roughly 11x as of March 2025, based on LTM 9/30/2024 Net Income of ~$1.3mm. Net total assets are in excess of market cap by $1.5mm, or 110%. The shares trade in penny territory at ~$2.50. These calculations indicate the purchaser of TAIT gets a free 30 cents per share for their trouble, or buying at a discount of 10% of NAV, not to mention the company pays a 20-cent dividend annually, compared to holding 30 cents per share in cash.

Now, you must know the risks about which financiers may be concerned. First and foremost, TAIT is a distributor. The implication of this business model is that the company does not own the intellectual property of the products with which it is associated. Since it is up against the big boys in the semiconductor space, and since Point #2 cannot be avoided here, make sure you tread carefully despite the rosy money picture.

Point #2: TAIT is directly connected to both China and Taiwan, who don’t like each other politically. Not only must it compete for scraps against the distribution services of the hammerheads and the great whites, but TAIT must be wary of its engineering and manufacturing relationships in these two Asian countries always at loggerheads in the very same operating space. Again, invest at your own risk.

To round it out, however, insider ownership is almost half of the stock, compared to 15% institutional ownership. The insiders do not trade really ever, and why would they? With a profit margin of roughly 20-30%, sit on that puppy and collect your coupons. And there’s no short interest.

So, light overhead, aligned insiders, no long-term debt, positive cash flow, and all dividends covered by cash for the next 18 months minimum. Compared to those high volatility sharks flying around, we have a nice catch.