Seeking Alpha
  • Vivint Solar: An IPO To Avoid
    PRO Top Idea VSLR Today, 5:00 AM Casual Analyst 18 Comments

    Summary

    • Vivint's business model is based on unsupportable assumption.
    • The warnings in the prospectus are real risk factors that should not be ignored.
    • This company is destined to destroy shareholder wealth.
  • LookSmart: A Failed Business, No Cash, And No Options Equals A High-Conviction Short
    PRO Top Idea LOOK Today, 5:00 AM Jeremy Raper 11 Comments

    Summary

    • LookSmart, a legacy search engine/internet advertising company that has been stuck in purgatory for years, will finally run out of cash in 1-2 quarters.
    • The company has $2.65mm cash on hand, no saleable assets remaining, is burning ~$2mm per quarter, and likely has zero access to the capital markets.
    • Current revenue is de minimis and still legacy search-engine driven; new business being sought is in competition with heavyweights like Facebook, Oracle and Saleforce.com.
    • The stock popped 50% on no news yesterday providing an excellent entrypoint. Even if it retraces I expect it to trade to fundamental value (i.e., zero) in the near term.
    • Despite low market cap and illiquidity, the stock is not heavily shorted (~1% of outstanding shares as of yesterday) and borrow cost is cheap (1-2%).
  • Mandalay Digital - Short 'Many, Many Millions'
    PRO Top Idea MNDL Yesterday, 5:00 AM New Capital 25 Comments

    Summary

    • Mandalay appears to be an over-hyped stock that saw its share price almost doubled upon the deal announcement with Verizon. Many similar breakthrough deals have been announced before without results.
    • The company operates in a highly competitive industry with inferior product that neither mobile subscribers nor mobile carriers seem to find useful.
    • Its promotional management with a terrible track record is incentivized to boost short-term share price and dilute shareholders. Share count doubled during the last year.
    • Mandalay is currently trading at 8x revenue, continues to mount losses and has hardly any growth or distant profitability prospects. The company will run out of cash in 2015.
    • Share price has at least 40% downside in the near term, and upcoming earning announcements are very likely to serve as catalysts.
  • CSS Industries: Stable Fundamentals, Cash-Rich Balance Sheet, And Deep Undervaluation Argue For 30%+ Upside
    PRO Top Idea CSS Tue, Sep. 30, 5:00 AM Value Plus Incentives 10 Comments

    Summary

    • CSS Industries is a micro-cap consumer products company (~$225 million market cap); its primary business is designing, manufacturing, marketing, and selling “social expression products” (i.e. gift wrap, bows, cards, etc.).
    • High, stable level of return on assets excluding cash (i.e. 12-15%) points to a very profitable niche business.
    • Balance sheet is cash rich with a $77 million in cash and short-term investments, no debt, and an insignificant $5 million in long-term obligations (mainly property leases).
    • CSS is deeply undervalued on nearly every metric (EV/EBITDA = 4.4x, EV/EBIT = 5.6x, FCF yield = 12%, P/E ex. excess cash = 8.2x, and Dividend Yield = 2.5%).
    • Potential for Private Equity buyout.
  • Overlooked World Energy Solutions: High-Margin Recurring Revenue Growth Business With Near-Term Catalysts Available At Deep Value Levels
    PRO Top Idea XWES Tue, Sep. 30, 5:00 AM Signal Search 11 Comments

    Summary

    • XWES is a capital-light business growing earnings at more than 100% CAGR trading for 7.3x next year's FCF.
    • More than 60% of XWES' revenue is recurring in nature and with backlog representing nearly 80% of its market cap, the business operates with a high degree of visibility.
    • XWES' core Procurement business generates 88% gross margin and is experiencing considerable operating leverage.
    • Despite consecutive "beat-and-raise" quarters, a 150% increase in management's EBITDA guidance, and a 230% increase in sell-side EBITDA estimates year-to-date, XWES' stock is flat.
    • Activists have noticed with 13-D's representing >15% of the stock filed this year. November's earnings release should be an inflection point. We think XWES is conservatively worth $7.60 (75% upside).
  • Synergy Resources: Exceptional Drilling Returns In The Niobrara
    PRO Top Idea SYRG Tue, Sep. 30, 5:00 AM Richard Zeits 4 Comments

    Summary

    • Synergy impresses with its rapid operational ramp up and very strong well results in the Niobrara/Codell play.
    • The stock is trading at a moderate multiple of EBITDA and a strong discount to the potential full drill-out value of its inventory.
    • The company is in a strong position to keep its growth momentum for another several quarters and may continue to surprise with strong production increases.
    • The company will evaluate Greenhorn Limestone potential on its acreage based on the “encouraging” core analysis results.
    • Declining oil price and local overproduction are potential risks.
  • History May Not Repeat Itself, But If It Just Rhymes, Tecumseh's Share Price Should Shine
    PRO Top Idea TECU Tue, Sep. 30, 5:00 AM Eight Diamonds Advisors 6 Comments

    Summary

    • Tecumseh is a global manufacturer of hermetically sealed compressors used mainly in refrigeration and air conditioning applications.
    • Though perennially loss making, it has a modest net debt level due in part to cash generated from asset sales and tax refunds. It now trades below 0.4x book value.
    • Its share price has returned to levels that attracted activist interest in the past that, coupled with management changes and a turnaround plan, saw its share price triple.
    • Though that speculative bubble has burst, the underlying assets and upside potential remains intact. Tecumseh retains valuable non-core assets, USD293 million in NOLs and an attractive commercial refrigeration business.
    • Downside is limited by Tecumseh’s significant discount. Re-emergence of past catalysts over a one year investment horizon could see 100% plus upside.
  • POET Technologies Revisited
    PRO Top Idea POETF Sat, Sep. 27, 5:00 AM Edward Schneider, CFA 52 Comments

    Summary

    • POET Technologies bear write-up last week received a lot of commentary.
    • This article takes a deeper dive into POET.
    • High-level technical experts were consulted.
  • Magellan Petroleum Should Double As Asset Values Get Unlocked
    PRO Top Idea MPET Fri, Sep. 26, 5:00 AM TheValueMan 35 Comments

    Summary

    • Turnaround story, trading below fire sale value, with none of the highly probable growth priced in the stock. My 12 month price target is $4.50 or 150% upside.
    • Magellan’s CO2 EOR program at Poplar will likely add at least 50 million barrels of incremental oil reserves or $1.96 per fully diluted share at $3 per barrel.
    • The Weald Basin asset is a hidden asset, and recent comparable land transactions value the core lands at $260 million or $3.40 per fully diluted share.
    • The Weald Basin can be monetized by copying the Wytch Farm model. I expect this asset to be spun-off or sold and funds redeployed at the core asset, Poplar.
    • Due to a management strategy change, combined with a dramatic recent improvement in shareholder quality, Magellan’s assets’ values will be unlocked, leading to share price appreciation.
  • Autobytel Is A Takeover Target In A Consolidating Industry
    PRO Top Idea ABTL Fri, Sep. 26, 5:00 AM Dr. Hugh Akston 10 Comments

    Summary

    • The industry is consolidating, market is ripe for ABTL to explore a transaction.
    • ABTL too small to be a public company, company spends ~20% of net income on public company costs.
    • Underlying business fundamentals are healthy. Company is growing, profitable, free cash flow positive.
    • Recent M&A transactions in the industry suggest ABTL should fetch $17+ per share in a sale.
  • A Simple Regression Debunks A Simple Short Thesis; Buy Sturm, Ruger And Smith & Wesson
    PRO Top Idea RGR, SWHC Fri, Sep. 26, 5:00 AM Brian Grosso 20 Comments

    Summary

    • Firearm demand is simply returning to a 15-year normal trend of growth from inflated post-Sandy Hook levels, NOT going to zero. Shorts are guilty of data point extrapolation here.
    • With the above and the unlikely risk of complete prohibition of private gun ownership established, the firearm industry is actually quite attractive from an investing standpoint.
    • SWHC and RGR are great companies- high ROIC and top/bottom line growth over long periods, strong and enduring brands, solid and unconventional management, engaged employees, and excellent products.
    • Both stocks are cheap. There is a possibility of a short squeeze and/or PE takeout. RGR is slightly more attractive.
    • Risk of complete gun prohibition is improbable, but there. Lack of immediate catalyst lends to a gradual position entry.
  • Higher One: A Terminal Short With A Number Of Ways To Win
    PRO Top Idea ONE Thu, Sep. 25, 5:00 AM Howie Man 18 Comments

    Summary

    • ONE is a broken business model that is under severe pressure on all sides.
    • ONE’s equity is a zero under a number of scenarios -- several of which are not reflected in the current stock price but will likely play out over the near term.
    • The stock has clearly been under pressure this year, but $160M of equity value still remains.
    • ONE is a terminal short with a very attractive risk/ reward profile.
  • Carbonite: A Business Model Transition, An Activist Investor And An Undervalued Acquisition Candidate
    PRO Top Idea CARB Wed, Sep. 24, 5:00 AM Alternative Activist 6 Comments

    Summary

    • Quietly transitioned its business to solely focus on SMBs vs. consumers. Higher margin SMBs are 30% of total bookings and 50% of new bookings—and expected to grow 30%+.
    • Received a large and growing activist investment from Discovery Group, one of the most effective activist investors that has helped push over 50% of its 53 targets toward an acquisition.
    • Valuable brand (tested by my own survey) will enable Carbonite to continue to gain share in a crowded SMB market that is ripe for consolidation.
    • Attractive financial profile, with solid revenue growth, a clean balance sheet and both EBITDA and FCF positive—all achieved while transitioning the business, which is largely complete.
    • Carbonite has all the characteristics of a prime acquisition candidate and with a discounted valuation relative to comparables and highly relevant precedent transactions; valuation upside of 40-50% is projected.
  • Einstein Noah Restaurant Group: Operational Improvement, A Hidden Asset, And Low Valuation Are A Recipe For 50%+ Upside
    PRO Top Idea BAGL Wed, Sep. 24, 5:00 AM Weighing Machine 24 Comments

    Summary

    • Cost cutting, reduced discounting, same-store sales growth, and an increased percentage of revenue coming from high margin franchising business could improve EBITDA margins 200-300 basis points.
    • Due to a distant history of significant operating losses, Einstein has operating loss carryforwards of $155 million. BAGL will not pay much in the way of cash taxes for years.
    • 38% owned by Greenlight Capital managed by superstar hedge fund manager David Einhorn. Under Einhorn’s stewardship, Einstein has implemented an attractive dividend, paid a special dividend, and repurchased shares.
    • Low valuation – at $13.25, Einstein trades for just 10.5x my estimate of 2015 free cash flow per share. Einstein trades at a nearly a 55% discount relative to competitors.
  • Unisys: Acquisition Or Activism Likely To Appear And Re-Rate The Shares
    PRO Top Idea UIS Wed, Sep. 24, 5:00 AM Alpha Gen Capital 11 Comments

    Summary

    • The company's share price is trading based on interest rates due to the large underfunded pension plan. Over the last few weeks, that link has broken possibly creating an opportunity.
    • The company has launched several new products in the technology division while restructuring their services business more towards faster growing IT outsourcing.
    • The shares are ripe for a takeover or some activist shareholder becoming involved. If that occurs, look for the shares to be significantly re-rated as they push for change.
  • Energous Could Be A Crowded Exit
    PRO Top Idea WATT Tue, Sep. 23, 5:00 AM Keubiko 49 Comments

    Summary

    • Energous faces enormous regulatory and commercial risk in bringing its technology to market.
    • The risk/reward is highly skewed to the downside.
    • The company's looming IPO lockup expiry could be a significant downside catalyst in the near term.
  • Cinedigm: Significant Upside With Secular Tailwinds
    PRO Top Idea CIDM Fri, Sep. 19, 5:00 AM Sabra Capital Partners 25 Comments

    Summary

    • With a stable base of risk-less assets providing a floor at $1.55 per share, downside is limited.
    • Cinedigm’s earnings profile will ramp up substantially in the coming quarters as its growing library and distribution agreements start to pay off.
    • Cinedigm's OTT opportunity represents the greatest upside lever with the potential to double the company’s value and beyond.
    • We expect the equity to ultimately trade closer to its sum of parts valuation at ~$5.50 per share.
  • Symmetry Medical: Surgical Maneuver Sets Up A Very Attractive Asymmetric Trade
    PRO Top Idea SMA Thu, Sep. 18, 5:00 AM Eight Diamonds Advisors 6 Comments

    Summary

    • In August 2014, Symmetry Medical announced that it had agreed to sell its OEM Solutions business for cash and, simultaneously, spin-off its Symmetry Surgical business.
    • Its muted share price reaction enables investors to speculate cheaply that a higher OEM Solutions bid may emerge, whilst buying into Symmetry Surgical at a very attractive price pre-separation.
    • Symmetry Surgical has been negatively impacted by a number of acquisition integration issues. Yet, it remains a high margin business capable of generating impressive cash flows.
    • Symmetry Medical’s share price implies that Symmetry Surgical is being valued at a significant discount to listed comparables. We estimate there is 70%+ upside potential for Symmetry Surgical.
    • This is an 18-month trade with strong catalysts. The low OEM Solutions deal risk combined with SSRG’s inherit discount limits the downside, presenting a very attractive asymmetric trade.
  • inTest: A Big Winner In A Semiconductor Capital Equipment Upcycle
    PRO Top Idea INTT Thu, Sep. 18, 5:00 AM BuyTheDip SellTheRip 8 Comments

    Summary

    • INTT is a very well-managed company, able to make money and generate cash even in the absence of a strong semiconductor capital spending backdrop.
    • Decreased exposure to semi capital equipment (notoriously a feast or famine industry) lends itself to less volatile sales which goes hand in hand with a better multiple.
    • P&L tightly levered to upturns in the semiconductor industry and the co.’s cost structure is largely fixed: we think this portends to quarterly earnings power of 25-40c (stock at $5.20).
    • The worst-case scenario is a profitable company throwing off cash and creating value by repurchasing stock at depressed valuation (magnifies earnings power when the cycle turns).
    • We think valuation makes our case even more compelling: trades at 10x earnings (ex-cash) and carries a 10% FCF yield. INTT trades at a significant discount to larger, well-covered peers.
  • Turnaround At Hallmark Financial Services Could Drive 60% Upside
    PRO Top Idea HALL Wed, Sep. 17, 5:00 AM Weighing Machine 11 Comments

    Summary

    • Exit from a troubled loss-making division coupled with continued growth of a highly profitable segment portend large increase in earnings at Hallmark.
    • Insiders own 30%+ of company and have been buying.
    • Company is well capitalized and has ample growth opportunities.
    • Selling at just 75% of book value and less than 6x normalized earnings, shares could appreciate 60% over the next 12-18 months as turnaround becomes evident.
  • The Babcock & Wilcox Company: Massive R&D Obscuring Earnings Power; 80%+ Upside
    PRO Top Idea BWC Wed, Sep. 17, 5:00 AM ValueStreet Research 14 Comments

    Summary

    • BWC is a large manufacturer of utility steam boilers and nuclear components.
    • Large operating losses in one segment are obscuring the true value of the company. Management has shown a willingness to stem these losses.
    • The company has a 150-year operating history, few competitors, a 25% RoE, and a backlog of 2x the market cap.
    • Under conservative revenue growth assumptions, the company has 80% upside with a large margin of safety.
  • Currency Exchange International: Compounding Cash Machine At A Deep Discount To Private Market Peers
    PRO Top Idea CURN Tue, Sep. 16, 5:00 AM Ariana Research 12 Comments

    Summary

    • A unique opportunity to own a compounding machine with organic growth in excess of 20% and high returns on capital.
    • OSFI approval to transition into a 'Banker's Bank' is a near-term hard catalyst for value creation.
    • Currency Exchange trades at a steep discount to recent private market transactions. We believe shares at minimum have upside potential of ~70%.
  • Spin-Off NOW, Inc: Market Leadership, Experienced Management, And Pristine Balance Sheet Point To Compounding Value
    PRO Top Idea DNOW Fri, Sep. 12, 5:00 AM Value Plus Incentives 21 Comments

    Summary

    • DistributionNOW or NOW, Inc. (DNOW), the recent spin-off from National Oilwell Varco, Inc. (NOV), ranks second by market share in the fragmented but fast consolidating energy distribution market.
    • DNOW’s pristine balance sheet – $236 million in cash, no debt – and low cost of capital should facilitate organic market share gains and rapid growth via M&A activity.
    • In contrast, DNOW’s primary competitor and market leader, MRC Global (MRC), has much higher leverage and now needs to enter a period of de-leveraging, which will likely slow growth.
    • DNOW’s management team has a 10 year, successful track record of accretive M&A. The spin-off is only the most recent in a long series of strategic actions to create value.
    • DNOW’s operating margins are likely to inflect significantly higher after digesting two large acquisitions and transitioning to a global ERP system.
  • Short Famous Dave's With 33-48% Downside
    PRO Top Idea DAVE Thu, Sep. 11, 5:00 AM Ross O'Toole, CFA 13 Comments

    Summary

    • Famous Dave's is a fundamental short due to deteriorating fundamentals, namely negative SSS trends.
    • The company trades with a "growth" valuation despite virtually no current new unit growth.
    • The current valuation is already giving credit to a successful turnaround, yet there is currently no evidence to support improving fundamentals.
    • At current prices, Famous Dave's has 33-48% downside.
  • Long Run Exploration: Cheap Canadian E&P With Huge 8.4% Yield
    PRO Top Idea WFREF Thu, Sep. 11, 5:00 AM Thomas Lott 65 Comments

    Summary

    • Long Run Energy (LRE in Toronto) is an E&P company trading at a 15% FCF Yield and a huge 8.4% dividend yield.
    • Technical pressure has pushed the stock down 10% in the past month as shares issued to fund an acquisition recently hit the market.
    • Management grew production organically 5.5% in the last quarter, and at under 4x TEV/EBITDA, the stock is excessively cheap and misunderstood.
  • Paradise Entertainment: 80% Upside On Strong Earnings From Casino Management, Gaming Equipment
    PRO Top Idea PDSSF Wed, Sep. 10, 5:00 AM Hidden Value 14 Comments

    Summary

    • Non-mainstream stock pick on Macau gaming sector: Strong 2-pronged earnings growth strategy driven by (1) Casino management and (2) Gaming equipment.
    • (1) Casino management: Increased capacity and continued yield enhancement with sticky grind mass focus.
    • (2) Gaming equipment: Overseas sales upside in US and Australia from distributorships, Macau local sales upside from upcoming new Cotai casinos, and long-term upside on product mix upgrade.
    • Recent sell-off post-1H14 results offers attractive valuation now for an entry point, especially when expectations for Macau gaming sector are lowered and reset.
  • Hutchinson Technology, Revisited
    PRO Top Idea HTCH Tue, Sep. 9, 5:00 AM Thomas Lewis 13 Comments

    Summary

    • Turnaround of suspension assembly business solidly back on track.
    • The rumor about an Optical Image Stabilizer (OIS) turns out to be true, and WOW what a partner!
    • While recent developments make posited $12 per share intrinsic value look conservative, we probably won't get to see HTCH trade above $20.
  • American Capital's 2nd Quarter Results Show Transformation Progress
    PRO Top Idea ACAS Tue, Sep. 9, 5:00 AM Alan Stacy 10 Comments

    Summary

    • Net operating income shows sequential growth and appears to have bottomed.
    • Management's investment focus on debt and more stable recurring income is starting to appear on financial statements.
    • Current share price discount to book value continues to present an attractive risk-reward opportunity.
  • Alere: Diagnosing A New Strategy With Upside Of 50% Or More
    PRO Top Idea ALR Tue, Sep. 9, 5:00 AM Alpha Gen Capital 7 Comments

    Summary

    • The market reaction to the quarterly results were off base presenting an entry opportunity.
    • The company has significant upside catalysts including the divesting of the Health Management division and other non-core assets.
    • The balance sheet debt has been a hindrance to investors supporting the shares. They have aggressively been delevering over the last year.
    • Aggressive activist shareholders provide a margin of safety in the shares motivating management in restructuring the business.
  • Layne Christensen: Why We Think The Bottom Is In With Strong Risk-Reward Going Forward
    PRO Top Idea LAYN Tue, Sep. 9, 5:00 AM BuyTheDip SellTheRip 13 Comments

    Summary

    • We think LAYN’s worst days are behind it as evidenced by a sharp reversal in bookings, non-residential construction spending acceleration, and winding down of unprofitable “hard bid” contracts.
    • Breakup valuation isn't in the stock – LAYN’s best segment is likely worth over $11 per share before attributing any value to LAYN's $700 million of remaining revenue.
    • Activist shareholders are pressing management to sell part of the company and reinvest the proceeds into debt paydown and share repurchases.
    • Recent refinancing yields a de-risked balance sheet: new revolver eliminates maintenance covenants with no significant maturities until 2019 barring a $15 million principal payment in CY2014.
    • Valuation is very attractive and the stock is receiving little credit for numerous materially positive developments over the last 2-3 quarters. LAYN is worth $20+ on a SOTP basis.
  • Quartet: Joel Greenblatt Writes A Blank Check For Pangaea Logistics
    PRO Top Idea QTET Thu, Sep. 4, 5:00 AM Eight Diamonds Advisors 35 Comments

    Summary

    • Joel Greenblatt is an initial stockholder and special advisor to Quartet, a blank check company that plans to merge with Pangaea Logistics, a maritime logistics provider.
    • Pangaea Logistics displays many of the characteristics one would expect from a Joel Greenblatt investment. Sector market leadership, high return on equity, experienced management and attractive growth prospects.
    • Quartet’s management highlight that there is a significant valuation gap between the price they are paying for Pangaea Logistics and its publicly traded peers. We estimate about 28% upside potential.
    • Key catalysts to unlock value include the successful completion of the merger, growing investor awareness and Pangaea Logistics achieving its net income targets, in particular for 2014E.
    • This opportunity should start to realize material upside in the near term, with limited downside risk due to an attractive entry price versus Quartet's current cash balance and the post-merger valuation.
  • HC2's Deal Making Offers Significant Upside
    PRO Top Idea HCHC Thu, Sep. 4, 5:00 AM Whopper Investments 19 Comments

    Summary

    • Significant NOLs and shifting balance sheet obscure company's value.
    • While controversial, management has a significant ownership stake and is highly incentivized to increase net asset value.
    • Near-term catalysts include closing of Schuff deal and uplisting to major exchange.
  • Quartet Merger Rights: 40% Upside For A Short-Term Event Driven Investment
    PRO Top Idea QTETR, QTET Thu, Sep. 4, 5:00 AM Ariana Research 43 Comments

    Summary

    • Quartet Rights offer investors the opportunity to re-create Quartet common at $7.20 per share, or 40% upside if the rights trade up to the common.
    • A near-term event is in place to unlock value. On September 29th, shareholders will vote on the Company's merger with Pangaea Logistics.
    • Quartet boasts strong sponsorship through Eric Rosenfeld of Crescendo Partners and famed value investor Joel Greenblatt.
  • Arris Group: Finding Profits In Your Cable Box
    PRO Top Idea ARRS Wed, Sep. 3, 5:00 AM Helix Investment Research 10 Comments

    Summary

    • The acquisition of Motorola Home has been very successful, resulting in double-digit growth in operating income and EPS.
    • Post-earnings selloff on unfounded concerns surrounding bookings has created an attractive entry point.
    • Continued balance sheet deleveraging will lead to increased ability to return capital to shareholders.
    • Despite year-to-date gains, shares continue to trade at modest multiples, both on an absolute and relative basis.
  • Wizard World: Obscure Marketing Machine Offers Attractive Risk/Reward
    PRO Top Idea WIZD Wed, Sep. 3, 5:00 AM Unconventional Capital Wisdom 6 Comments

    Summary

    • Wizard's convention business is the quintessential low asset high return business.
    • Wizard's scale provides barriers to entry in marketing, celebrity draw and attendance.
    • Comic cons benefit from continued monetization of superhero assets by movie studios.
    • Even with the >70% increase in share price this month, we continue to see at least 46% upside in the near term, limited downside and plenty of optionality.
  • Danieli: Ultra-Cheap, Ultra-Solid, 40% Upside (At Least)
    PRO Top Idea DNIYY Wed, Sep. 3, 5:00 AM Early Retiree 28 Comments

    Summary

    • Italian steel and aluminum plant maker Danieli is trading at an EV/EBITDA ratio of under 2, despite being highly profitable.
    • Adjusting for excess cash, the company's preference shares trade at only 2.7 times expected 2014 EPS.
    • Even without adjustments the PER 2014e is only 8.35 and the PER 2015e is 7.11.
    • With the steel sector picking up speed, a return to a still modest valuation of 10 times earnings should be easy to achieve within 12 months.
  • 9% Yield And 50% Upside At Bluerock Residential Growth REIT
    PRO Top Idea BRG Wed, Sep. 3, 5:00 AM Dane Bowler 17 Comments

    Summary

    • Bluerock is a discounted multi-family REIT with large growth potential.
    • Developing and repositioning afford BRG greater yields on investment than market cap rates.
    • Misconceptions about the company's operations have kept its market price down.
  • KAR Auction Services: An Opportunity From Industry Anomalies
    PRO Top Idea KAR Wed, Sep. 3, 5:00 AM Alpha Gen Capital 1 Comment

    Summary

    • KAR is poised to benefit from a strong cyclical surge in its key whole car auction segment from late 2011 and 2012 cars coming off lease.
    • The industry is essentially an oligopoly with a few large players and very highs barriers to entry.
    • The financing arm represents a hidden asset opportunity which is a fast growing and very high incremental margin business.
  • TransAct Technologies: After A Sell-Off, Investors Have A Great Opportunity To Own This Debt-Free 4% Yielder
    PRO Top Idea TACT Sat, Aug. 30, 5:00 AM ValueArtifex 9 Comments

    Summary

    • After a heavy sell-off earlier this month an underfollowed microcap, TransAct Technologies, is now on sale.
    • Recent selling can be attributed to the market's misunderstanding of the company's product cycle and investments in new sectors of business.
    • TransAct is debt-free and offers investors a dividend yield over 4% which has been increased twice since being initiated a year and a half ago.
    • Management has also recently engaged in massive share repurchases, with a new $7.5 million share repurchase program announced producing an extremely favorable Total Shareholder Return profile.
    • Investors at current prices stand to benefit over the next year from the company's investment in new product deployment and will enjoy higher per share earnings due to share repurchases.
  • True Gold Mining Brings Good Karma To Your Portfolio
    PRO Top Idea RVREF Thu, Aug. 28, 5:00 AM Itinerant 17 Comments

    Summary

    • True Gold Mining has an extremely robust project in Burkina Faso.
    • We believe that this is only the tip of the iceberg. We expect the Karma project to develop into a long-lived and highly-profitable gold mine.
    • The terms of the recent financing, and feedback from the company have further bolstered our confidence to call for 60% mid-term upside.
    • Much more long-term potential exists, with some of the best management available to drive growth.
  • EQT Corporation: The Midstream Advantage
    PRO Top Idea EQT Thu, Aug. 28, 5:00 AM Richard Zeits 7 Comments

    Summary

    • Based on a sum-of-the-parts analysis, EQT’s upstream business is one of the best values in the Marcellus/Utica E&P peer group.
    • The company is developing takeaway solutions in the Marcellus that may support production growth to over 3 Bcf/d by 2018.
    • The stock has a catalyst in the form of a potential monetization of the General Partner interest in the MLP.
    • The recently acquired Midland acreage has the potential to evolve into a second core operating area.
    • Despite the natural gas pricing headwinds in the Marcellus/Utica area, the stock's risk/reward profile appears skewed very favorably to the upside.
  • TowerJazz: A Towering Double In Share Price
    PRO Top Idea TSEM Wed, Aug. 27, 5:00 AM Jaret Wilson 100 Comments

    Summary

    • TowerJazz's new JV with Panasonic adds $360 million-$420 million a year in revenue and also provides room for expansion.
    • The JV facilitates the closing of the Nishiwaki fab, giving $132 million in annual cost savings.
    • TowerJazz is also seeing extraordinary organic growth, especially in RF devices and image sensors.
    • I believe TowerJazz is priced at a fully diluted level of around 3 times late 2015 or early 2016 EV / EBITDA.
  • To Handsomely Beat The Market, Buy Petroamerica Oil With Both Hands
    PRO Top Idea PTAXF Tue, Aug. 26, 5:00 AM Value Digger 346 Comments

    Summary

    • Petroamerica made a transformative deal by acquiring Suroco Energy, and addressed all the challenges it was facing.
    • This acquisition significantly strengthens and diversifies the company's asset base.
    • Now, Petroamerica has everything: strong production growth, high netbacks, stellar balance sheet with a strong cash position and an aggressive management.
    • With management focused on continuing to grow, the tremendous valuation gap with the peers can close anytime and Petroamerica's shareholders stand to benefit a lot.
  • Mentor Graphics: Earn 20% With Zero Net Market Exposure
    PRO Top Idea MENT Tue, Aug. 26, 5:00 AM Beating The Street 10 Comments

    Summary

    • Mentor operates in an industry experiencing multiple long-term tailwinds.
    • The company's leading indicators suggest a business inflection is near.
    • The stock's current valuation presents multiple ways to profit from the name.
  • Eclipse Resources Corporation: A Shiny Penny Still Isn't Worth Twenty Five Cents
    PRO Top Idea ECR Sat, Aug. 23, 5:00 AM Dallas Salazar 20 Comments

    Summary

    • ECR is wildly overvalued when comparing its PV-10 to a peer group.
    • ECR may soon have to take impairments on its assets as the price of Natural Gas has fallen 19% over the last 90 days.
    • ECR fails several benchmark tests when compared to peers yet maintains valuation multiples at significant levels higher than those same peers.
  • TOP Ships: Deep Discount To NAV Presents Opportunity
    PRO Top Idea TOPS Sat, Aug. 23, 5:00 AM Sabra Capital Partners 31 Comments

    Summary

    • We believe TOPS will accrete in value over time and narrow the gap to NAV as its fleet grows and its strong FCF becomes more apparent.
    • Management owns over 40% of the company and is highly incentivized to grow its NAV and build shareholder value.
    • Patient investors will be well rewarded as we believe the intrinsic value of the company is well north of $4.40 per share currently.
  • Jason Industries - Hidden IPO Of A Proven Business With Proven Management
    PRO Top Idea JASN Fri, Aug. 22, 5:00 AM New Capital 26 Comments

    Summary

    • Jason Industries is a fast growing and profitable global industrial manufacturing business that recently merged with a blank check company and became public.
    • Due to lack of investor awareness and following among analysts the share price continues to trade in the pre-merger range, not reflecting any potential of Jason Industries.
    • The company has long and profitable history of revenue growth and successful acquisition integration. Longstanding relationships with blue-chip customers and established reputation will ensure continuation of great financial performance.
    • Peer valuation indicates 50%-55% upside. Management’s purchases of warrants signals at least 35% upside.
    • Company’s chairman and management have proven track record and very high incentives to see share price grow.
  • DTS Inc.: A Mundane Business, With Exciting Profits
    PRO Top Idea DTSI Fri, Aug. 22, 5:00 AM Helix Investment Research 7 Comments

    Summary

    • Margin-rich royalty revenues result create business with material operating leverage.
    • Partnerships with majority of leading consumer electronics companies create tailwinds as network-connected electronics sales continue to grow.
    • Clean balance sheet with over $2 per share in net cash.
  • MGIC - An Opportunity Through Mortgage Credit Exposure
    PRO Top Idea MTG Fri, Aug. 22, 5:00 AM REIT Analyst 12 Comments

    Summary

    • Expected losses on MTG's legacy book are likely a lot less than anticipated.
    • Even accounting for some conservative assumptions the fair value of MTG is over twice its market price.
    • The results are not very sensitive to future mortgage default assumptions.
  • El Pollo Loco: PE 'Bust-Out', 20+ Years Of Failed Domestic Expansion, Pre-IPO Window Dressing Make An Ideal Short
    PRO Top Idea LOCO Thu, Aug. 21, 5:00 AM Suhail Capital 113 Comments

    Summary

    • More like a ‘Pollos Hermanos’ than the Chipotle media comparison it is currently getting.
    • 20+ years of failed domestic expansion track record.
    • Two-year comp momentum is largely average check growth driven, and thus should be heavily discounted.
    • Existing equity holders will be very motivated sellers at lockup expiry.
    • There should be ZERO bid for this stock anywhere north of $20.