The company is taking additional steps to further strengthen its balance sheet.

The stock currently trades at forward P/E (fye 30-Jun-10) of 20.12 and PEG ratio of 1.23. Of the eleven analysts who follow the stock, six rate it a Strong Buy while two rate it a Strong Buy. Two analysts rate it a Hold and one tags it a Strong Sell. Investors with medium to long term perspective could go long in this stock as the company is expected to emerge stronger from the current recession.

Bearish Stock of the Day: Logitech (NASDAQ: LOGI)

Logitech International S.A. (NASDAQ: LOGI) engages in design, manufacture, and marketing of personal peripherals for personal computers and other digital platforms in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. It offers mice, trackballs, keyboards and desktops, gaming controllers, multimedia speakers, headsets, Webcams, 3D control devices, speakers, headphones, earphones, and custom in-ear monitors. The company also provides wireless music solutions for home, remote controls for home entertainment systems, and PC-based video security systems for home or small business.

Late in April, the company announced that it swung to a fiscal fourth quarter loss of $35 million, or 20 cents a share, compared to a profit of $60.3 million, or 32 cents a share, in the year-ago quarter. Excluding one-time items, the company posted an adjusted loss of 11 cents a share. Revenue plunged 32% to $408 million. Gross margin plummeted to 25% from 35.6% from a year earlier. The company blamed a combination of three factors for a steep decline in gross margin- mixed shifts, both between and within the product categories; the significantly stronger US dollar compared to the prior year; and the continued high levels of promotions, particularly in U.S.

During the quarter, the company suffered hugely in all the geographic markets. In U.S, its largest retail market, Logitech's sell-through in Q4 was down by 11% compared to the year earlier. In three largest European markets namely, Germany, France and the U.K., the company saw sell-through growth ranging from 1% in Germany, to low double-digit growth in France and the U.K. Among the top five countries, Canada showed a significant sell-through decline, down by 33%.

The company has been hit hard by the economic slump as weak consumer demand forced distributors to reduce inventory level. During the quarter Logitech's inventory churns slipped to $5.2 million from $6.3 million. Remotes, which have historically been one of the strongest growth categories, saw sales decline of 50%.  

The company expects bad times to continue in near future and expects to return to profitability only in the second half of the year. Already, technology spending has remained weak and according to technology research firm Gartner, global spending on technology products and services is likely to decline 3.8% from 2008.Looking ahead, in the next three months, Logitech expects an operating loss of $40 million to $50 million, sales between $300 million and $320 million and gross margin in the range of 24% to 26%..

Turning to balance sheet, the company has currently $494.40 million in cash. The stock currently trades at forward P/E (fye 31-Mar-10) of 20.35 and PEG ratio of 9.50.

Of the eight Wall Street analysts who follow the stock, two rate it a Strong Buy, one tags it a Moderate Buy while four recommend Hold. One analyst rates it a Strong Sell.

Disclosure: Author does not own any of the stocks discussed here.