Hi Liz,
having difficulty with Adobe at the moment so can't browse the final report.

PE of 9-10 isn't necessarily cheap if it earns $9m one year, but loses $4m the next. Very low (2%) margins (basing this on 1H06) suggest a slight change in industry conditions could wipe out this year's profits. So some info on earnings variability and sensitivity to changes in economic conditions is important from that perspective, IMHO. From your description LDG came across as a commodity business with no competitive advantage, and in a very competitive sector.

P/E of 7.0 might be undervalued, if confident they will meet forecast and the earnings are "clean" (though in the electronics industry big inventory write offs are presumably common? Bit of a worry with the build up, as you noted).

Don't know much about this company so just trying to generate discussion .