Cash flow for this yr. should be 4 million or maybe slightly higher. They have stated it will be at least 50% higher next yr. due to new products and higher margins, and since then an aquisition was made.
So if you take market cap. 3.80 x 19 million = 72,200 000 minus cash of 15 million = 57,200 000
Divide that by the minimum of 6 million ( 50% increase in cash flow) = 9.2 times 2013 cash flow.
Very reasonable for the no debt, perfect balance sheet, high dividend, accelerating growth, aquisitions from cash on the balance sheet, and tight share structure.
Go out a year and use 50% again for cash flow increase.( conservative I think) Same shares outstanding and no build in cash. Use 12 times for that kind of growth and your at roughly 6 bucks. Not to mention the increasing dividend policy. So not likely to be a cheap stock all considered.