For today's post, I swerved all the way over to the Leisure Goods industry.  CTI Industries Corp (CTIB) caught my eye because of the P/E ratio of 3.80, so I turned in for a closer look.

This is one of those rare finds that's good for all the wrong reasons.  Normally, I would say that both the price and the market cap are way too low.  The management effectiveness numbers are terrible, and the profitability is weak.  I must be absolutely out of my mind to even mention this, right?

Well, actually, CTIB does have some merit.  First of all, the price range in the last 52 weeks has been $2.88 to $10.39, with a current price of $2.94.  This means the stock is at the low end of its volatility, with the potential to approximately triple in value.

During the third quarter, the company sustained a net monetary loss of $0.18 per share.  This report came out on November 12th, and naturally the stock declined in value during a massive sell-off.  Its price has declined since then.

In spite of the net losses, however, the earnings per share are reported at $0.81, for the 3.80 P/E that drew my eye.  (Actually, I think the reported 3.80 is higher than the actual P/E, 294 / 81 should be closer to 3.63).  Also, the November 12th bulletin indicated that CTI has prepared a new product line and has released their 4th quarter sales estimates for this product.

This stock is a microcap with a relatively small number of outstanding shares that has recently plummeted in speculative value but is poised to sell a new product right around the Christmas season.  If the sales of their new zippered vacuum pouches exceed the $550,000 estimate for this quarter, the value of this stock may well triple after all.

There's a risk to this one, of course, namely that if the sales don't meet the estimate, the stock value may be reduced to half its current price.  Personally, I think the odds are in the shareholder's favor with this one.

To think a tiny, crazy stock like this might actually pan out.