Scottrade has a link showing that Reuters has initiated coverage of EDIG on 9/18/2007 with a rating of 'outperform!' I'll try to post the report:

Reuters Company Research
e.Digital Corporation (EDIG) 18 Sep 2007
Performance Rating: Outperform
1997 2007
Share Price Summary Overview Percent Price Change EDIG S&P 500
Close Price on 9/18/07........................................... $0.21 Float (mil)........................................................... 242.400 Year to Date................................23.49............ 7.16
Absolute Price Change on 9/18/07............................ 0.02 10 Day Average Volume (mil)................................... 0.268 One Year.....................................32.26.......... 15.28
Percent Change..................................................... 7.89% 1 Day Volume Change on 9/18/07.........................-2.07% Two Years...................................70.83.......... 23.46
Off 52-Week High...............................................-28.07% Market Capitalization (mil)...........................................$50 Three Years.................................. 7.89.......... 34.67
Over 52-Week Low.............................................. 46.43% TTM Price/Earnings......................................................NA Five Years..................................-48.75.......... 80.21
Beta....................................................................... 0.686 Price/Earnings Current Fiscal Year Estimate...................NA Ten Years................................... 20.59.......... 59.89
Table of Contents
Reuters Rating ....................................... 2
Getting Acquainted .................................3
Significant Developments ........................4
Significant Developments continued ........ 5
Share Price Trends .................................6
General Sentiment ..................................7
Stock Price Rationale ..............................8
Footprints of Success ............................. 9
REUTERS COMPANY REPORT DISCLAIMER
This research report is provided for informational purposes only and on the condition that it will not form the sole basis for any investment decision. Reference to any company is not a recommendation
to buy or sell the shares of such company. The information used for, or presented in, this report has been obtained from sources believed to be reliable, but Reuters makes no representation as to the
accuracy or completeness of such information. This report in intended only for users in the United States. Reuters has no obligation to update, modify or amend this report or to otherwise notify a reader
thereof in the event that any matter stated herein becomes inaccurate. Reuters and/or its affiliates/investors may hold securities positions in the companies discussed in this report and may frequently
trade in such positions. Such investments may be inconsistent with the quantitative analysis provided in this report.
This report was generated using a proprietary quantitative model that leverages widely accepted statistical methods and financial concepts to rank and rate a universe of more than 4700 US companies
and US-listed ADRs with a market capitalization greater than $50mm based on a series of financial attributes. These ratings are not intended as an indication of how an individual's investment will
perform. As used in this report, "Outperform" designates the companies that rank in the top 30% of companies covered by Reuters, "Neutral" designates the middle 40%, and the bottom 30% are
designated "Underperform". All ratings are relative to the universe of companies covered by Reuters and not to any specific benchmark.
© Reuters 2004. All rights reserved. This report may not be reproduced, modified, distributed or published without the prior written authorization of Reuters. Reuters and the sphere logo are the
trademarks or registered trademarks of the Reuters Group of companies around the world.
Reuters Composite Rating
We cannot guarantee that each stock will perform
in accordance with its rank. But we do believe that
over the long term, stocks rated Outperform (30%
of all stocks we rate) will, in the aggregate,
outperform stocks rated Neutral (40% of all stocks
we rate), and that stocks rated Neutral will, in the
aggregate, outperform stocks rated Underperform
(30%). All analysis is based on publicly available
company financials, fundamental ratios, relative
rankings of financial data and ratios, and observed
security prices.
Underperform Neutral Outperform
EDIG shares are presently rated OUTPERFORM.
No forecast is made for the stock market as a whole.
However, we do believe that whichever way the market
moves, stocks rated OUTPERFORM have, in the
aggregate, a higher probability of performing better than
most others.
Component Rating
Fundamental
Quality
Outperform
Neutral
Under
Technical
Factors
Outperform
Neutral
Under
Value
Catch-up
Outperform
Neutral
Under
Operational
Trends
Outperform
Neutral
Under
"Under" = Underperform
Component Weight
Types of investment criteria differ in how useful
they are for predicting future stock movement.
Based on our research, the Composite Rank
assumes these relative degrees of importance.
Fundamental Quality 36%
Technical Factors 27%
Operational Trends 13%
Value Catch-up 24%
Technical Factors: Neutral
This rating is based on analyses of share price
movements over a variety of time periods. We
compare performance characteristics of individual
stocks with those of all the others we rate.
Generally speaking, our goal is to favor up-trending
shares that have experienced recent corrections
and de-emphasize down-trending shares
experiencing uncharacteristic periods of strength.
Here is how EDIG shares performed during the
various periods we examined.
Price Change
Past 7 days 2.5%
Past 30 days 7.9%
Past 60 days 17.1%
Change for Past 180 Days: -23.4%
Open on 3/23/07 Close on 9/18/07
$0.27
$0.21
Change Between 60 and 30 Days Ago: 8.6%
Open on 7/23/07 Close on 8/20/07
$0.18
$0.19
Change Between 180 and 60 Days Ago: -34.6%
Open on 3/23/07 Close on 7/20/07
$0.27
$0.18
Change Between 180 and 90 Days Ago: -30.8%
Open on 3/23/07 Close on 6/21/07
$0.27
$0.19
Fundamental Quality Component: Neutral
This rating is based on characteristics traditionally associated with "good" companies. We focus on how each company
measures up against others, and give careful attention to recent improvement or slippage relative to other companies.
TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
TTM Return on Investment
Improvement in TTM Return on Investment
TTM Pretax Margin
Improvement in TTM Pretax Margin
Depreciation in Excess of Capital Spending Needs
Issuance/Repurchase of Common Shares
Common Shares Dilution
Presence/Absence of Unusual Income Items
Value Catch-up Component: Outperform
This rating measures the extent to which the share price adequately reflects improving or eroding fundamentals, and favors
shares whose prices have been slower to "catch up" to improving performance measures. TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
Price Catch-up with TTM Earnings
Price Catch-up to TTM Sales
Price Catch-up to TTM Free Cash Flow
Price Catch-up to MRQ Book Value
Operational Trends Component: Outperform
This rating reflects how strong a company's recent Sales and EPS (reported as per GAAP) growth have been relative to other
companies we rate. MRQ = Most Recent Quarter. TTM = Trailing Twelve Months.
Very Negative Negative Neutral Positive Very Positive
Most Recent Quarter EPS Growth
Improvement in EPS Growth for Consecutive Quarters
Improvement in EPS Growth (MRQ vs. TTM)
Most Recent Quarter Sales Growth
Improvement in Sales Growth (MRQ vs. TTM)
Peer Comparison
This section shows the comparison of key components between EDIG and several of its peers.
Company Name (Ticker)
Composite
Rating
Fundamental
Quality
Technical
Factors
Value
Catch-up
Operational
Trends
e.Digital Corpo... (EDIG) Outperform Neutral Neutral Outperform Outperform
Panasonic Manufacturing... (3719) NA NA NA NA NA
Sony Corporation (ADR) (SNE) Outperform Neutral Outperform Outperform Neutral
Samsung Electronics Co.... (005930) NA NA NA NA NA
Hitachi, Ltd. (ADR) (HIT) Neutral Neutral Neutral Neutral Neutral
Audiovox Corporation (VOXX) Underperform Underperform Underperform Outperform Neutral
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Performance Rating: Outperform
Reuters ratings are based on a proprietary model that leverages widely accepted statistical methods and financial concepts to select attributes shown to be strong indicators of future
stock price performance and applies these to rank stocks along a normal distribution curve. Ranks for Fundamental Quality, Value Catch-up, Operational Trends and Technical Factors
are combined into a Composite Rating of Outperform, Neutral or Underperform.
September 18, 2007 Page 2
Business Summary
e.Digital Corporation is a provider of secure portable video on demand products. The Company's secure digital
video/audio technology platform (DVAP) can be applied to produce portable electronic products. In February 2006,
the Company introduced a new DVAP device, the eVU mobile entertainment device targeted at the in-flight
entertainment (IFE) and other markets. The Company commenced eVU customer trials and commercial shipments to
customers during the fiscal year ended March 31, 2007 (fiscal 2007). eVU, features sharp images on a 7 inch or
8-inch high-resolution liquid crystal display (LCD) screen, a 40 gigabyte to 200 gigabyte of rugged and reliable
storage, high-audio fidelity, dual stereo headphone jacks, embedded credit card reader/processor, touch screen
capabilities, a full feature graphical user interface, hardware security technology, and 14 hours of high-resolution
video playback on a single battery charge.
Contact Info
e.Digital Corporation is headquarted at:
16770 West Bernardo Drive, San Diego, CA,
92127
United States
(858) 304-3016
www.edigital.com
Robert Putnam, Investor Relations
Financial Trends
TTM = Trailing Twelve Months, * = Most Recent Quarter.
Historic Growth Rates
Fiscal Year Ending 3/31/03 3/31/04 3/31/05 3/31/06 3/31/07 TTM 3 Year 5 Year 10 Year
Sales (mil) $2.6 $3.4 $4.3 $3.3 $1.8 $3.1 (19.02) (5.57) 10.75
EPS (GAAP) ($0.05) ($0.02) ($0.02) ($0.03) ($0.01) ($0.01) NA NA NA
Dividends/Share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 NA NA NA
Book Value/Share ($0.03) ($0.03) ($0.03) ($0.02) ($0.01) * ($0.01) NA NA NA
Tangible Book Value/Sh. ($0.03) ($0.03) ($0.03) ($0.02) ($0.01) * ($0.01) NA NA NA
Cash Flow/Share ($0.05) ($0.02) ($0.02) ($0.03) ($0.01) ($0.01) NA NA NA
Free Cash Flow/Share ($0.03) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) NA NA NA
Key Ratios
Historic Averages
Fiscal Year Ending 3/31/03 3/31/04 3/31/05 3/31/06 3/31/07 TTM 3 Year 5 Year 10 Year
% Sales Growth 7.4 31.6 24.4 (23.5) (44.2) 36.3 (14.4) (0.9) 32.1
% EPS Growth 8.0 (53.4) 1.1 31.3 (49.5) 59.8 (5.7) (12.5) (15.4)
% Gross Margin (34.7) 20.2 23.4 18.5 56.5 40.9 32.8 16.8 (17.6)
% Operating Margin (225.0) (68.1) (47.9) (78.2) (114.0) (61.0) (80.0) (106.6) (219.6)
% Tax Rate 0.0 0.0 0.0 0.0 0.0 NA 0.0 0.0 0.0
% Return on Assets (366.2) (316.2) (181.1) (198.6) (215.0) (187.7) (198.3) (255.4) (230.7)
% Return on Investment 441.7 243.8 210.0 162.8 199.5 NA 190.7 251.6 (4.1)
% Return on Equity 226.6 86.6 85.6 126.6 108.2 NA 106.8 126.7 29,015.1
Asset Turnover 1.4 4.3 3.2 2.1 1.2 2.2 2.2 2.4 1.5
Receivables Turnover 6.5 31.4 95.6 116.1 90.8 7.4 100.8 68.0 36.2
Inventory Turnover 6.7 37.6 1,302.0 NM 5.1 NA NA NA NA
Equity Information
Whether you are willing to accept companies that have or don't have major shareholders with controlling ownership blocks,
multiple classes of common, or convertible debt or preferred issues is a matter of individual preference. Look here for
anything along these lines that might make you more or less inclined to invest in this company.
Common Stock $.001 Par, 8/07, 300M auth., 246,091,809 issd. Insiders control 3% (includes 3.7M in options). PO: N/A. FY '02 Qs are
reclassified. FY '03 Qs are restated due to change in accounting method. Series D Preferred Stock $.001 Par, 5M auth., 91K issd. Series
EE Preferred Stock $.001 Par, 20K designated, 1,250 issd.
Analyst Footnotes
Look for accounting changes, restructurings,
etc.which may affect how useful historic data is
inassessing future company prospects.
1/99, Name changed from Norris Communications, Inc.
FY'92 & '93 fncl. restated for sale of controlling interest
in JABRA Corp. *3/96 & 3/97 summarized & expanded
Qs = 6 months.
Peer Comparison
This table gives an indication of how e.Digital Corporation stands in key respects compared with companies in the Electronic Instr. & Controls Industry
Company Name (Ticker)
Last Fiscal Year
Revenue (mil)
Current Fiscal
Year Projected
Revenue (mil)
Projected
Price/Sales Operating EPS
Current Fiscal
Year Projected
EPS
P/E Based on
Current Year
Estimates
EPS % Growth
Previous 5 Years
EPS % Growth
Next 5 Years
e.Digital Corpo... (EDIG) $1.8 NA NA ($0.01) NA NA NA NA
Panasonic Manufacturing... (3719) NA NA NA NA NA NA NA NA
Sony Corporation (ADR) (SNE) $72,095.7 $75,272.8 0.6 $1.04 $2.86 16.5 63.9 16.9
Samsung Electronics Co.... (005930) NA NA NA NA NA NA NA NA
Hitachi, Ltd. (ADR) (HIT) $89,061.9 $91,904.6 0.2 ($0.85) $0.88 70.1 NA NA
Audiovox Corporation (VOXX) $456.7 NA NA $0.16 NA NA NA NA
Koninklijke Philips Ele... (PHG) $37,411.6 $37,265.9 1.3 $1.08 $3.38 12.9 NA 24.9
Toshiba Corporation (US... (TOSBF) $63,245.9 $7,620,014.1 NM NA NA NA NA NA
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Getting Acquainted
Start your analysis by learning what the company does, how well it does it, where it stands relative to peers, and whether aspects of the corporate structure or capitalization are
bothersome to you.
September 18, 2007 Page 3
Significant News Stories Mapped to Price Chart
Volume (mil)
0.00
3.40
A. e.Digital Corp. Announces eVU Portable IFE Opening Order From Air France ... ($0.20)
B. e.Digital Corp. Issues H1 2008 Revenue Guidance ($0.18)
C. e.Digital Corp. Receives Initial eVU Portable IFE Systems And Services Orde... ($0.21)
D. e.Digital Corp. Announces Supply Agreement With Alitalia ($0.22)
E. e.Digital Corp. Announces Award Of Contract ($0.16)
F. e.Digital Corp.'s eVU Portable Entertainment Systems Selected by Mezzo Fo... ($0.16)
Jan'07 Feb Mar Apr May Jun Jul Aug Sep
$0.29
0.25
0.20
0.15
Significant News Stories
A. September 12, 2007. e.Digital Corp. Announces eVU Portable IFE
Opening Order From Air France For Six A319 Dedicated Flights e.Digital
Corp. announced that it has entered into an agreement to supply its proprietary
eVU portable entertainment systems to Air France. Air France has been providing
eVUs to Business Class passengers on long-haul flights to Djeddah, Malabo,
N'Djamena, Nouakchott, Pointe Noire and Riyadh utilizing A319-ER dedicated
aircraft since mid-summer. The agreement includes eVU support equipment and
on-going services.
B. July 2, 2007. e.Digital Corp. Issues H1 2008 Revenue Guidance e.Digital
Corp. announced that it expects to report over $3 million in revenues for the first
half of fiscal 2008.
C. May 1, 2007. e.Digital Corp. Receives Initial eVU Portable IFE Systems
And Services Order From Lufthansa e.Digital Corp. announced that it has
received an initial eVU portable entertainment systems and services order from
Lufthansa. In connection with this initial order, the Company has also entered into
supply and content integration agreements with Lufthansa. This order is part of the
new orders and contracts e.Digitalannounced on March 29, 2007.
D. April 4, 2007. e.Digital Corp. Announces Supply Agreement With Alitalia
e.Digital Corp. announced that it has entered into an agreement to supply its
proprietary eVU portable entertainment systems to European air carrier, Alitalia. Per
the agreement, e.Digital is supplying Alitalia an initial 120-unit order for Premium
Class passengers. The agreement includes eVU support equipment and on-going
services. This order has been shipped to Alitalia and is part of the $2.5 million+ in
new orders and contracts e.Digital announced March 29, 2007.
E. March 6, 2007. e.Digital Corp. Announces Award Of Contract e.Digital
Corp. announced that its eVU portable entertainment systems are being utilized by
MEZZO, a U.K.-based provider of fully outsourced IFE solutions, for its services on
business class luxury airline, Silverjet.
F. February 27, 2007. e.Digital Corp.'s eVU Portable Entertainment
Systems Selected by Mezzo For Jet2.com Inflight Entertainment Services
e.Digital Corp. announced that its eVU portable entertainment systems have been
selected by MEZZO, a U.K.-based provider of fully outsourced IFE solutions, for its
services on U.K.-based airline Jet2.com.
G. January 8, 2007. e.Digital Corp. Enters into $8.5 Million Common Stock
Purchase Agreement with Fusion Capital e.Digital Corp. announced that it has
signed an $8.5 million common stock purchase agreement with Fusion Capital
Fund II, LLC, a Chicago-based institutional investor. Under the agreement, the
Company sold to Fusion Capital $250,000 of its common stock at a purchase price
of $0.12 per share and has agreed to sell to Fusion Capital an additional $250,000
of its common stock at a purchase price of $0.12 per share on the date that a
registration statement related to the transaction is filed with the Securities and
Exchange Commission (SEC). The Company may sell an additional $8.0 million of
common stock to Fusion Capital from time to time over a 25-month period after the
SEC has declared effective the registration statement related to the transaction.
The proceeds will be used to expand its eVU mobile entertainment system
business, accelerate licensing efforts of its flash memory-related patent portfolio
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Significant Developments
This page lists significant news developments related to e.Digital Corporation and shows how key stories may have an impact on the stock price. When looking at the chart, note the
extent to which share price reactions to stories was temporary or lasting.
September 18, 2007 Page 4
and for general working capital. Under the agreement, the Company has the right
to sell shares of common stock to Fusion Capital from time to time in amounts
between $80,000 and $1 million, depending on certain conditions, for up to $8.0
million of additional funds. The purchase price of the shares will be based on the
prevailing market prices of the Company's shares at the time of sales without any
fixed discount, and the Company will control the timing and amount of any sales of
shares to Fusion Capital.
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Significant News Stories Continued
September 18, 2007 Page 5
1 Year Price Chart with Bollinger Bands and Relative Strength
Technical analysts believe a narrowing of the bands suggests a significant price movement, up or down, will soon occur. Also, many say stocks that move outside the bands and then
back inside will soon move toward the opposite band. The Relative Strength Index (RSI) calculates the strength of the current price movement compared to other recent moves and
may signal when a trend is unsustainable. Technical analysts also believe RSI peaks/valleys forecast changes in share price trends.
0.17
0.21
0.25
$0.29
0.34
Average Volume
Oct' 06 Nov Dec Jan' 07 Feb Mar Apr May Jun Jul Aug
Volume (mil)
Relative Strength Indicator
50%
100%
Low: .14
High: .29
10 Year Price Chart (Monthly)
4.00
9.00
14.00
19.00
$24.00
0.01
1998 1999 2000 2001 2002 2003 2004 2005 2006 Vol (bil)
5 Year Price Chart (Monthly)
0.10
0.20
0.30
0.40
0.50
$0.60
0.008
2003 2004 2005 2006 2007 Vol (bil)
6 Month Price Chart (Daily)
0.17
0.20
0.23
0.26
$0.29
0.33
Apr' 07 May Jun Jul Aug Vol (mil)
1 Month Price Chart (Daily)
0.18
0.19
0.20
0.21
0.22
$0.23
0.23
Aug' 07 Sep Vol (mil)
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Share Price Trends
Stock price trends depict the collective opinion of the investment community. You don't have to agree with consensus views but seeing how others feel can help you decide what to
look for as you go further in your analysis. Consider it similar to reading a review before seeing a movie.
September 18, 2007 Page 6
52 Week Price History
0.17
0.21
0.25
$0.29
0.34
Average Volume
Oct' 06 Nov Dec Jan' 07 Feb Mar Apr May Jun Jul Aug
Volume (mil)
50 Day Moving Average
200 Day Moving Average
Price History
Calendar Year 1998 1999 2000 2001 2002 2003 2004 2005 2006
High Price 0.16 3.74 24.50 4.09 1.91 0.63 0.63 0.34 0.22
Low Price 0.05 0.06 1.34 0.73 0.17 0.13 0.02 0.06 0.02
Year End Price 0.06 2.91 1.69 1.32 0.19 0.52 0.33 0.08 0.17
High P/E NA NA NA NA NA NA NA NA NA
Low P/E NA NA NA NA NA NA NA NA NA
Year End P/E NM NM NM NM NM NM NM NM NM
Dividend Yield NM NM NM NM NM NM NM NM NM
Price Performance
When stocks significantly beat or trail the S&P 500 or the industry, investors are looking more intently at company- specific
matters than general-market factors. In the two percentile rank columns, a high "Rank in Industry" coupled with a low
"Industry Rank" could signify a hot stock in a cold industry. The reverse, is also noteworthy.
Time Period
Actual
Change
Percent
Change
vs.
S&P 500
vs.
Industry
Rank in
Industry
Industry
Rank
4 Week 0.02 10.8% 5.5% 6.1% 50 32
13 Week 0.02 10.8% 11.8% 12.1% 79 50
26 Week 0.00 1.5% (5.8)% (10.6)% 49 68
52 Week 0.05 32.3% 14.7% 4.5% 60 68
Year To Date 0.04 23.5% 15.2% 3.1% 64 68
BarChartKey Rank Key
YTDR4 Wk. WorstRBest 1R100
Short Interest
A high or increasing short interest implies that many investors expect the stock price to decline. You can treat that as a
warning. Or you can disagree with the crowd and buy stocks with high short interest in anticipation of a short squeeze (a rally
that occurs when short sellers rush to buy a stock, fearing losses they might incur if they wait too long). Prospects for a
squeeze are indicated by high readings in the "Days to Cover" column (which tells how many days it would take for all short
interest positions to be covered if recent trading volume levels persist). The risk: The bears may be right. So research other
aspects of the company.
Month Shares % Outstanding Percent of Float Days to Cover
August 2007 510,000 0.90 1.03 1.24
July 405,000 0.72 0.82 0.37
June 370,000 0.66 0.75 0.83
May 197,000 0.35 0.40 1.95
Insider Trading
Insider buying can be seen as bullish because,
presumably, their company knowledge is superior.
However, insider sales are less reliable because
insiders may sell for a variety of reasons that have
nothing to do with their opinion of the stock.
In the last 6 months, there have been no insider
purchases, and there have been no insider sales.
Net Change (6 months) 0 mil
6 Month Net Transactions 0
Institutional Ownership
It's worthwhile to know what institutions are doing
simply because their stock positions can be so
large. In the short term, stocks will perform well if
institutions are buying and perform poorly if
institutions are selling.
2 institutions own 0.0% of the 0.25 billion common
shares outstanding. This is lower than the average
institutional ownership of the Electronic Instr. & Controls
Industry at 51.3%, and lower than the average of the
S&P 500 as a whole which is 71.4%.
Net Change (3 month) 0.0%
Net Purchases (3 month) 0.03 mil
Shares Purchased (3 month) 0.04 mil
Shares Sold (3 month) 0.02 mil
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
General Sentiment
You can follow popular opinion or choose a contrarian's strategy. Either way, you should know whether the Street is bullish or bearish. Investor sentiment is typically positive when
the 50-day moving average is rising, especially if it's also above the 200-day moving average. Additionally, changes in price trend can be deemed more definitive if supported by
higher than normal volume.
September 18, 2007 Page 7
Viewing Things In Context
Many people erroneously work with valuation ratios calculated based on numbers that aren't truly representative of a company's underlying sustainable financial characteristics. Thus
it's important to determine if today's sales and EPS are significantly depressed or elevated due to temporary factors such as business cycles. Higher ratios can be tolerated if sales and
EPS are temporarily depressed. But if the company is experiencing unsustainable boom conditions, seek lower ratios. GAAP = Generally Accepted Accounting Principles.
Fiscal Year Ending 3/31/01 3/31/02 3/31/03 3/31/04 3/31/05 3/31/06 3/31/07 3/31/08E 3/31/09E
Sales/Share $0.01 $0.02 $0.02 $0.02 $0.03 $0.02 $0.01 NA NA
Price/Sales NA NA 8.90 NA 7.98 8.19 24.52 NA NA
EPS (GAAP) ($0.06) ($0.04) ($0.05) ($0.02) ($0.02) ($0.03) ($0.01) NA NA
P/E (GAAP) NA NA NM NA NM NM NM NA NA
EPS (Normalized) ($0.06) ($0.04) ($0.05) ($0.02) ($0.02) ($0.03) ($0.01) NA NA
P/E (Normalized) NA NA NM NA NM NM NM NA NA
Dividend Yield (%) NA NA 0.00 NA 0.00 0.00 0.00 NA NA
Valuation Based On Growth
The faster a company grows, the higher its stock's P/E can be. Contrary to popular belief, PEG (P/E over Growth Rate) need not always be 1.00 or less. But all else being equal, lower is
better (and 3.00 is usually too high). Try to favor company PEGs that are lower than industry and market PEGs. In all cases, watch for very high growth estimates. If overly optimistic
projections get cut, PEG would wind up being higher. FY = Fiscal Year.
Price/EPS (Est.) for Current FY Price/EPS (Est.) for Next FY Long Term Growth Estimate Next FY P/E over LT Growth
e.Digital Corporation NA NA NA NA
Electronic Instr. & Controls 20.03 15.74 14.34 1.07
S&P 500 18.59 16.07 12.32 1.44
Comparative Valuation Ratios
Valuation below industry or S&P 500 averages can be attractive - unless the company is materially worse in terms of quality
growth prospects. Year-by-year trends in comparative valuations can give clues about company merit. Be especially on guard
if comparative ratios are deteriorating over time. On the other hand, relatively low valuations that are moving toward the
averages might indicate that the market is tuning in to heretofore under-appreciated company merit.
FY = Fiscal Year, TTM = Trailing Twelve Months, * = Most Recent Quarter.
e.Digital Corporation
Price/
Earnings
Price/
Sales
Price/
Book
Price/
Cash Flow
Price/
Tang. Book
Price/Free
Cash Flow
Trailing 12 Months NA 16.28 * NA NA * NA NA
FY Ending 3/31/07 NM 24.52 (21.26) (13.91) (21.26) (17.93)
FY Ending 3/31/06 NM 8.19 (8.21) (5.11) (8.21) (11.44)
FY Ending 3/31/05 NM 7.98 (7.50) (9.18) (7.50) (17.24)
FY Ending 3/31/04 NA NA NA NA NA NA
Bar Chart Key
2004RTTM
Electronic Instr. & Controls
Price/
Earnings
Price/
Sales
Price/
Book
Price/
Cash Flow
Price/
Tang. Book
Price/Free
Cash Flow
Trailing 12 Months 21.14 2.05 * 3.82 15.48 * 7.06 27.73
FY Ending 2007 23.23 2.16 2.24 7.63 3.11 27.80
FY Ending 2006 19.00 2.11 3.43 12.68 7.88 25.45
FY Ending 2005 32.31 2.24 3.44 17.68 5.57 20.63
FY Ending 2004 26.94 2.62 2.81 18.97 6.30 27.57
Bar Chart Key
2004RTTM
S&P 500
Price/
Earnings
Price/
Sales
Price/
Book
Price/
Cash Flow
Price/
Tang. Book
Price/Free
Cash Flow
Trailing 12 Months 20.32 2.88 * 4.19 14.45 * 8.23 34.27
FY Ending 2007 22.16 3.00 4.91 16.94 3.40 41.40
FY Ending 2006 20.11 2.79 3.76 13.62 4.98 27.67
FY Ending 2005 23.66 3.18 4.32 16.06 5.78 21.88
FY Ending 2004 25.52 3.40 4.10 16.41 5.77 24.65
Bar Chart Key
2004RTTM
Dividends
Dividend is the most classic basis for
stockvaluation, and high dividend yields are
usuallydeemed preferable. Today, with many
companiesreinvesting profits back into the
business, moderateor low yields can be accepted if
dividends growrapidly. The main risk is that poor
performance willcause the dividend to be cut or
omitted. A very highpayout ratio is one warning
signal. Another is ayield that is very high relative to
industry peers.
TTM = Trailing Twelve Months.
EDIG Industry
Current Dividend Yield NA 1.4%
5 Yr. Avg. Dividend Yield 0.0% 0.9%
5 Yr. Dividend Growth Rate NA (5.8)%
TTM Payout Ratio NA 12.1%
5 Yr. Average Payout Ratio NA 15.0%
Liquid Assets
Get a general sense of the extent to which the
stockprice is offset by the presence of assets that
can beconverted to cash immediately or in the near
future. Often, these ratios will not be meaningful.
Most companies are valued as ongoing businesses,
rather than liquidation/buyout prospects. If you're
lookingat an especially troubled company, be aware
that seemingly liquid-asset windfalls can be
dissipatedby continuing operating losses and/or
shutdown costs.
Price to ... EDIG Industry
General Working Capital (30.8) 9.2
(current assets minus current liabilities)
Net Working Capital (21.7) (2.4)
(current assets minus all liabilities)
Cash (& cash equivalents) 67.4 20.8
Cash minus total debt NM (4.1)
Cash minus all liabilities (14.9) (2.7)
e.Digital Corporation (OTC:EDIG) -- Electronic Instr. & Controls/Technology Reuters Company Research
Stock Price Rationale
Determine if the stock price is justified by: growth-based value, comparative value, liquid assets, or dividends. The better the company, (in terms of growth or quality), the higher the
valuation measures can be. And if valuation ratios are extremely low, double-check to see if the company appears excessively weak. In any case, you don't have to say yes to any
valuation measure - many buy shares based on other factors (e.g., growth). But if you do that, at least understand what you're doing and consider the risks.
September 18, 2007 Page 8
Growth Rates (%)
Investors are accustomed to looking at EPS growth. Check sales growth, too. EPS gains can't persist indefinitely without good sales growth. Do further investigation if sales trends are
falling short. (A big short fall might reflect a divestiture. On the other hand, if sales growth looks too good, check to see if it's being boosted by an acquisition.) Also, compare sales
growth to capital spending growth. Over a prolonged period, it's reasonable to expect capital spending growth to more or less keep pace with sales growth. If the latter is significantly
higher, capital spending may have to accelerate in the next few years.
% Growth Rate EDIG Industry Sector S&P 500
Company Rank
in Industry
EDIG
vs. Industry
EDIG
vs. Sector
EDIG
vs. S&P 500
Sales Growth For Most Recent Quarter 6,114.3 12.7 16.4 14.4 100
Sales Growth For Trailing 12 Months 36.3 13.2 6.5 14.5 85
Sales Growth For Past 5 Years (5.6) 8.5 13.5 13.7 20
Capital Spending Growth for Past 5 Years (21.6) 1.2 4.9 8.3 24
EPS Growth for Most Recent Quarter 56.1 14.5 24.5 14.8 NA
EPS Growth for Trailing Twelve Months 59.8 13.9 18.9 19.5 NA
EPS Growth for Past 5 Years NA 30.8 33.8 23.2 NA NA NA NA
WorstRBest = Co. underperforming = Co. outperforming
Company Quality
Some companies excel in obtaining high margins (watch out for very low tax rates, which may reflect special benefits that often won't persist indefinitely) while others are highly
efficient. Still others are strong in both respects. These trade-offs are balanced in the Management Effectiveness returns, which combine both factors. TTM = Trailing Twelve Months.
Profitability Ratios (%) EDIG Industry Sector S&P 500
Company Rank
in Industry
EDIG
vs. Industry
EDIG
vs. Sector
EDIG
vs. S&P 500
Gross Margin for Trailing Twelve Months 40.9 30.2 51.8 44.8 75
Gross Margin for Past 5 Years 15.7 28.3 50.7 44.0 30
Operating Margin for Trailing Twelve Months (61.0) 8.3 16.6 19.7 6
Operating Margin for Past 5 Years (96.6) 4.6 14.0 19.3 4
EBITD Margin for Trailing Twelve Months (59.4) 11.4 19.8 23.1 6
EBITD Margin for Past 5 Years (93.6) 9.4 17.2 21.3 22
Pretax Margin for Trailing Twelve Months (83.9) 9.2 18.6 18.6 2
Pretax Margin for Past 5 Years (116.3) 4.4 15.1 18.0 2
Net Margin for Trailing Twelve Months (83.9) 6.1 13.7 13.6 2
Net Margin for Past 5 Years (116.3) 2.4 9.6 12.5 3
Effective Tax Rate for Trailing Twelve Months NA 25.1 26.3 29.9 NA NA NA NA
Effective Tax Rate for Past 5 Years NA 28.7 25.1 30.8 NA NA NA NA
Efficiency Ratios (TTM) EDIG Industry Sector S&P 500
Company Rank
in Industry
EDIG
vs. Industry
EDIG
vs. Sector
EDIG
vs. S&P 500
Asset Turnover 2.2 1.2 0.8 1.0 98
Receivables Turnover 7.4 6.3 7.9 10.3 98
Inventory Turnover NA 5.5 13.1 12.0 98 NA NA NA
Revenue/Employee $154,950 $312,312 $489,785 $913,858 58
Net Income/Employee $NA $20,461 $78,268 $114,552 NA NA NA NA
Management Effectiveness Ratios (%) EDIG Industry Sector S&P 500
Company Rank
in Industry
EDIG
vs. Industry
EDIG
vs. Sector
EDIG
vs. S&P 500
Return on Assets for TTM (187.7) 6.8 10.7 8.4 7
Return on Assets for Past 5 Years (255.9) 3.5 7.6 7.1 7
Return on Investment for TTM NA 9.2 15.5 12.4 NA NA NA NA
Return on Investment for Past 5 Years NA 4.9 10.6 10.6 96 NA NA NA
Return on Equity for TTM NA 18.2 20.6 21.4 NA NA NA NA
Return on Equity for Past 5 Years NA 10.8 13.7 18.5 NA NA NA NA
WorstRBest = Co. underperforming = Co. outperforming
Financial Strength
Quick Ratio (cash and marketable securities divided by current liabilities) and Current Ratio (all current assets divided by current liabilities) give a sense of how readily the company
could cover current obligations if the sales were to stop. Higher ratios indicate greater liquidity. Different businesses have different cash inflow-outflow characteristics, so compare
companies to industry averages. Similar comparisons are relevant for debt ratios (higher ratios indicate more debt and, hence, more financial risk) and interest coverage (lower
numbers signify greater risk).
EDIG Industry Sector S&P 500
Company Rank
in Industry
EDIG
vs. Industry
EDIG
vs. Sector
EDIG
vs. S&P 500
Quick Ratio 0.5 1.6 1.9 1.2 19
Current Ratio 0.5 2.5 2.4 1.8 12
Total Debt to Equity NA 61.1 26.7 79.1 NA NA NA NA
Long Term Debt to Equity NA 50.7 22.5 60.3 NA NA NA NA
Interest Coverage (1.9) 8.3 10.1 13.1 37
WorstRBest = Co. underperforming = Co. outperforming