Seeking Alpha
  • The Long Case For Consolidated-Tomoka: 45-55% Upside
  • Profire Energy - A Classic Pump And Dump, Sell Before You Get Burned, Stock Worth $1.00
    PRO Top Idea PFIE Today, 5:00 AM Small Cap Machine 3 Comments

    Summary

    • PFIE is a pump and dump worth no more than $1-per share. Management has a long track record of suspicious and deceptive activities. PFIE shareholders are the latest victims.
    • Promoters have caused PFIE stock to gush 325% since 2012, enabling management to sell $13mm of holdings. Promoters are so successful that the Office Manager is worth $10 million!
    • Management has once again partnered with auditors and lawyers that have a suspect track record. I have uncovered numerous red flags and anomalies.
    • Management’s claims to have 80% share in a market that is 2% penetrated is highly unrealistic.
    • We believe PFIE is no more than a reseller of a commoditized product they don't even manufacture in-house, yet is still valued at a 140% premium to peers.
  • ALJ Regional Holdings: Building A Solid Holding Company, One Acquisition At A Time
    PRO Top Idea ALJJ Yesterday, 5:00 AM The GeoTeam 21 Comments

    Summary

    • In short, we believe ALJ could be the beginning of a "baby Berkshire"; a holding company with a sharp eye for value and shareholder-friendly management.
    • ALJ bought, revamped, and turned around a Kentucky Electric Steel Mill for a $76 million profit. They sold it last year.
    • After paying off liabilities, ALJ returned a large portion of this profit to shareholders in the form of a 30 million "dutch auction" share buyback.
    • We believe ALJ will optimize and increase profitability at the two new companies they recently acquired.
    • We think ALJ could generate $175M in revenues and $25M in EBITDA and $0.50 fully diluted EPS in the next 12 months; we peg the company to be worth $7.50.
  • Magnetek: Expect 40% Near-Term Upside Due To Likely New Capital Allocation
    PRO Top Idea MAG Thu, Nov. 20, 5:00 AM Dane Capital Management, LLC 9 Comments

    Summary

    • Magnetek is significantly undervalued. It would have an unlevered 12% free cash flow yield, if not for the ongoing funding requirements for its underfunded pension.
    • By January, Magnetek's cash funding obligations will be materially complete and management will have flexibility as to how to utilize the company's excess cash position.
    • We're hopeful that management will act expeditiously to create shareholder value, in all likelihood through establishing a dividend.
    • We believe shares are likely to enjoy 40% upside in the near term as investors do the math and understand the compelling value Magnetek shares offer.
  • The Beauty Of Shorting Tree.com
    PRO Top Idea TREE Wed, Nov. 19, 5:00 AM New Capital 20 Comments

    Summary

    • Tree.com appears to be an overhyped stock that saw its share price more than double since June.
    • The company trades at 3x revenue with hardly any profits, its main operating segment in decline, pricing under pressure and questionable further growth possibilities.
    • Revenue is supported by very aggressive and unsustainable sales practices that are hated by consumers. Competitors have structural cost advantages and grow faster.
    • Its founder/CEO started selling shares in large amounts recently.
    • Relative to better-positioned competitors, Tree.com is significantly overvalued. A very optimistic scenario indicates fair value of $26/share at most. This is 45% below the current levels.
  • Selling In Extendicare Creates A Solid Entry Point And A Need For An Activist
    PRO Top Idea EXETF Wed, Nov. 19, 5:00 AM Thomas Lott 11 Comments

    Summary

    • Extendicare's stock has fallen almost 25% in the past month, creating a 7% yield on a great non-cyclical business.
    • Pro forma for the sale of the company's US business, Extendicare will have a significant amount of cash it intends to deploy into growth opportunities.
    • From a valuation perspective, Extendicare stock trades at a huge discount to competitors Chartwell and Leisureworld in Canada.
  • Glentel: A Free Cash Flow Machine At An Inflection Point
    PRO Top Idea GLNIF Wed, Nov. 19, 5:00 AM Ariana Research 11 Comments

    Summary

    • Glentel trades for 7x depressed free cash flow and at a ~5% dividend yield.
    • Glentel has been overly punished by the market due to a botched high yield offering and issues within its Australia segment.
    • The market is overlooking strong results amongst its Canadian and United States operations.
  • Ashford Inc.: Should You Join Insiders In Their Aggressive Share Capture Of The Spin-Off?
    PRO Top Idea AINC Wed, Nov. 19, 5:00 AM Stanislav Ermilov 17 Comments

    Summary

    • Opportunity to acquire hotel asset management company with strong revenue visibility and highly scalable model with great growth prospects.
    • Large initial undervaluation on the back of excessive cost estimates and underestimated revenue.
    • Large insider interest suggests strong motivation to achieve quick EBITDA increase.
  • No Alpha In Omega Protein
    PRO Top Idea OME Wed, Nov. 19, 5:00 AM Southern Equities 7 Comments

    Summary

    • Q3 results showcase the first of what will be several difficult quarters.
    • Weak organic growth in Human Nutrition with sub-par profitability.
    • SOTP yields significant downside from current share price.
  • Edgewater Technology Offers An Attractive Risk-Reward Opportunity To Investors Today
    PRO Top Idea EDGW Tue, Nov. 18, 5:00 AM Andreas 6 Comments

    Summary

    • Attractive 13% free cash flow yield unleveraged, and a "Fort Knox" balance sheet with 25% of market cap in cash.
    • Excellent growth opportunities in the IT services industry.
    • High ROIC business model.
    • Important partner to Oracle and Microsoft.
    • Good long-term potential to be acquired by strategic or financial buyer.
  • Sungy Mobile Is Sinking, While Its Executives Are Abandoning Ship
    PRO Top Idea GOMO Tue, Nov. 18, 5:00 AM Radiant Research 5 Comments

    Summary

    • Sungy Mobile is sinking, and the executives aren't sticking around for a rebound.
    • App analytics data shows GOMO's flagship product, the Go Launcher EX Android launcher, has been declining in downloads over the past year.
    • A former GOMO executive confessed that Qihoo 360 ditched GOMO and now is funding a competitor to the Go Launcher EX called Apus Launcher.
    • Google just launched Lollipop, an updated Android Operating System that has its own integrated Launcher, and this will take more market share from the Go Launcher EX.
    • GOMO's former executives have large holdings in the company's variable interest entities, and could use them against the shareholders' best interests.
  • The Long Case For Civeo
    PRO Top Idea CVEO Sat, Nov. 15, 5:00 AM USC Value Investing Group 17 Comments

    Summary

    • Civeo's strategic asset position in Canada and Australia will allow it to capitalize on macroeconomic trends in energy and a commodity pricing recovery.
    • The market overreacted to Civeo's choice to redomicile in Canada rather than become a REIT.
    • Base case scenario offers 30% upside even assuming Civeo does not renew a large chunk of its contracts.
  • Here's Why Ametek Inc. Is An S&P 500 Company With Accounting Concerns And 30-50% Downside
    PRO Top Idea AME Fri, Nov. 14, 9:30 AM Ben Axler 9 Comments

    Summary

    • Ametek's aggressive roll-up story appears too-good to be true; its ability to beat Wall Street's quarterly earnings estimates 95% of the time in over a decade raises alarms.
    • We believe its EBITDA margins appears 400 - 600 bps overstated, and have collected 17 financial documents across 10 countries to support our claim.
    • A 2009 whistleblower case claimed improper revenue and inventory accounting. The controller who worked with him was indicted by the FBI. Ametek's Indian auditor raised similar revenue/inventory accounting concerns.
    • Ametek trades at an irrational premium to the sum of its acquired businesses, many of which have no growth and declining margins.
    • If Ametek were to trade in line with peers at 2x sales and 10x our Adj. EBITDA estimate, there would be up to 50% downside.
  • Perry Ellis: Many Avenues For Unlocking Significant Shareholder Value
    PRO Top Idea PERY Fri, Nov. 14, 5:00 AM Alpha Gen Capital 2 Comments

    Summary

    • Two large activists in the shares could be the impetus needed to promote change at the management level which has been supporting the status quo for years.
    • There are many avenues for significantly higher shareholder value including shedding underperforming assets and moving more towards a licensing pure-play.
    • We think there is a high probability that the company gets sold in short-order and for a nice premium because of the many paths for value.
  • Xpel Technologies: Wrapping Up A Sticky Model And Hyper Growth Worth Multiples Of Today's Price
    PRO Top Idea XPLT Fri, Nov. 14, 5:00 AM Unconventional Capital Wisdom 19 Comments

    Summary

    • Xpel's growth over the past 4 years is on-par with growth of Wal-Mart post IPO and both have many traits in common.
    • Xpel is building its stickiness through an ecosystem of direct distribution, training and DAP cutting software which should give it an edge to maintain high growth.
    • Company-owned install shops should provide upside and a method to exploit its direct distribution model internationally.
    • Xpel trades at a significant discount due to its obscurity, stock listing and illiquidity and potentially worth multiples of today's price.
    • Continued performance, a potential stock uplisting next year and a potential takeover in the mid-term provide catalysts to value creation.
  • Planar Systems - Mr. Market's Fat Pitch Selling Opportunity
    PRO Top Idea PLNR Fri, Nov. 14, 5:00 AM Southern Equities 8 Comments

    Summary

    • Channel checks indicate a commodity, hyper-competitive business.
    • Undersized tech company trades at a nose-bleed multiple.
    • Temporary market mispricing provides an excellent short opportunity.
  • Why We Believe Noah Holdings Is Poised For Success
    PRO Top Idea NOAH Thu, Nov. 13, 5:00 AM Cloud And Wind Capital 4 Comments

    Summary

    • Wealth Management Industry in China is fast growing.
    • NOAH has the best team and resources.
    • Chinese Macro Environment is still good.
  • Valuing Furmanite With A Negative Bias Still Suggests Value For Longs
    PRO Top Idea FRM Wed, Nov. 12, 5:00 AM Tim Insko 6 Comments

    Summary

    • Poor execution coupled with overly optimistic expectations have caused Furmanite shares to fall over 50% from their 52-week high.
    • Negativity from shareholders, analysts, and portfolio managers is pervasive after a year of poor results.
    • Even with a negative outlook and pessimistic bias, shares are now undervalued on a normalized basis.
  • Delta Apparel: A Beaten Down Apparel Manufacturer Trading Near Liquidation Value With 80-110% Upside
    PRO Top Idea DLA Wed, Nov. 12, 5:00 AM Out of Favor Investing 14 Comments

    Summary

    • Delta Apparel is trading at a mid-single digit multiple of normalized earnings providing significant upside potential for value investors, additionally Delta Apparel trades within 15% of liquidation value.
    • Management has taken a proactive approach to rationalize underperforming business units and unlock earning power.
    • Recently acquired brand Salt Life is worth almost the entire market capitalization providing a free call for Delta Apparel shareholders.
  • Investment Technology Group: A Profitable Investment In The Global Capital Markets
    PRO Top Idea ITG Tue, Nov. 11, 5:00 AM Helix Investment Research Comment!

    Summary

    • Despite a 3-decade presence on Wall Street, few investors are likely to have heard of ITG.
    • ITG has a clean balance sheet, with over 16% of its market capitalization in net cash.
    • Increasingly diverse revenue base, from both a geographic and business perspective is helping drive double-digit growth in operating profits and EPS.
    • Management has a solid track record of returning capital to shareholders; since 2009, over 20% of shares have been repurchased.
  • Silicon Image Will Add A Quarter To Your Money
    PRO Top Idea SIMG Sat, Nov. 8, 5:00 AM Soid Ahmad 8 Comments

    Summary

    • Silicon Image has the potential to capitalize on the growth of HD connectivity-standards like HDMI, MHL and WirelessHD. HDMI 2.0 and MHL 3.0 are set to fuel the growth.
    • MHL will be the primary driver of the company’s growth while HDMI 2.0 will follow suit. Wireless 60 GHz back-haul also holds promise for the company.
    • Silicon Image has a healthy margin and an immaculate balance sheet. Valuation, with conservative estimates, reveals an upside of around 25%.
  • Scalable Growth And A Substantial Addressable Market Make Health Insurance Innovations A Compelling Buy
    PRO Top Idea HIIQ Sat, Nov. 8, 5:00 AM Mike Arnold, CFA 78 Comments

    Summary

    • Health Insurance Innovations will report Q3 earnings after the market close on Monday, November 10.
    • I expect a revenue and earnings beat (excluding any one-timers), and bullish guidance from management.
    • Given the tight share structure, high short interest and limited free float, a significant "beat and raise" could cause a parabolic rise in the share price.
    • Limited downside risk from potential 60%+ top-line growth in Q3. Bear thesis centers around HIIQ brokering short-term medical plans not exempted from Obamacare penalties which is short-sighted.
    • Recommendation: Buy. $25/share price target in 6 to 12 months as investors get excited about the sexy growth story and platform-based business model. Bear thesis underestimates ancillary revenue streams.
  • HCI Group - Insurer Selling At 3.2xBV With 15% Organic Decline Is About To Hit A Brick Wall
    PRO Top Idea HCI Thu, Nov. 6, 5:00 AM New Capital 24 Comments

    Summary

    • HCI Group is no-moat Florida P&C insurer operating in commoditized industry currently trading at 3.2xBV while having negative organic growth of -15% annually.
    • Superior HCI performance was caused only by profitable policy take-outs from the state-owned insurer Citizens. The potential for any further take-outs from Citizens is now fully exhausted.
    • With no organic growth, no marketing channels, high churn and intense competition HCI business will decline sharply without further Citizens policy take-outs.
    • A recent 50% share price spike creates a well-timed short entry opportunity.
    • Target price of $20/share is 60% below the current share price levels.
  • DeeThree Exploration: This Well-Run, High-Growth, Low-Debt, Undervalued Company Has A Very Bright Future
    PRO Top Idea DTHRF Wed, Nov. 5, 5:00 AM TheValueMan 83 Comments

    Summary

    • 11 out of 11 professional analysts covering DeeThree Exploration rate it a buy with a median 12 month price target 109% higher than the current price.
    • DeeThree has rapidly increasing proved reserves, production, operating cash flows, and recycle ratios combined with declining F&D costs.
    • The company’s netbacks are very healthy with NYMEX WTI at $78.4/bbl and NYMEX Henry Hub Natural Gas at $3.9/mmBTU. Those netbacks are robust enough to withstand further commodity price declines.
    • DeeThree controls approximately 2.5 billion barrels of oil equivalent in place and should book another massive reserve increase due to their 2014 drilling campaign in early 2015.
    • This company has very low leverage at 0.69 net debt/cash flow and they have plenty of spare borrowing capacity at their credit facility. They are well positioned for potential adversity.
  • Sanderson's Farms: Fat Roosters Mean Fat Wallets For Shareholders
    PRO Top Idea SAFM Wed, Nov. 5, 5:00 AM Netwall 25 Comments

    Summary

    • Sanderson's Farms, once a high-flyer, has seen some recent weakness in stock price due to lower-than-expected growth.
    • Some analysts are concerned why company is not showing growth in spite of this favorable environment for corn and soy prices.
    • Less pounds of chicken were sold in Q3, 2014 due to a breeder issue with a particular class of rooster, which is discussed in detail below.
    • Its new upcoming processing plant in Palestine, TX would be a catalyst for growth in 2015 and going forward.
  • Oaktree: Sum-Of-The-Parts And Secular Tailwinds Point To Undervalued Units
    PRO Top Idea OAK Wed, Nov. 5, 5:00 AM Alpha Gen Capital 27 Comments

    Summary

    • Oaktree is a premier asset manager that is trading at a substantial discount to its intrinsic value which we think is due to hidden assets, complex corporate structure and accounting.
    • The company trades at multiples that are less than traditional asset managers despite having 73% of assets locked for 10 or 11 years and an incentive fee.
    • There are significant assets on the balance sheet including a 20% ownership in DoubleLine Capital, a large bucket of corporate assets, and nearly $3 per share in cash.
  • Newcrest Is Overvalued And A Great Gold Short
    PRO Top Idea NCMGF, NCMGY Tue, Nov. 4, 5:00 AM Da Shi Research 16 Comments

    Summary

    • NCM is a major gold miner facing significant operational and financial headwinds at present.
    • With gold seemingly range bound at present between $1,150/oz and $1,250/oz, NCM is looking increasingly vulnerable with forecast costs of close to $1,000/oz for the next few years.
    • NCM presently trades as a significant premium to its gold mining peers, which is undeserved given the risks it faces from its current operating assets.
    • NCM has a very overgeared balance sheet, which could well require new equity/rights issue in the short term.
    • NCM is an excellent short target.
  • Wyndham Worldwide: Excellent Business, A Buyback Gondola No-Brainer
    PRO Top Idea WYN Fri, Oct. 31, 5:00 AM Time & Model 10 Comments

    Summary

    • Investment-grade credit quality and excellent hotel franchise business model.
    • Excellent asset-light strategy.
    • As a non-bank financial intermediary, it can issue ABS to help drive demand for timeshare sales. This business additionally provides attractive financing income.
    • Share buybacks will help a patient investor achieve a satisfactory return.
  • SuperCom: Overvalued By Almost 60%
    PRO Top Idea SPCB Thu, Oct. 30, 5:00 AM Jay Yoon 126 Comments

    Summary

    • Due to the non-recurring and lumpy nature of government EID contracts, SPCB's pro forma revenue has not grown over the past four years.
    • FY 2014 has been an unusually strong year in terms of EID adoption. Going forward, global EID adoption rate and revenue growth are expected to decline substantially.
    • The Company provides commoditized EID system integration services and appears to have lost market share to competitors.
    • A turnaround in the RFID division is not likely given SPCB's weak competitive position and minimal amount of R&D investments.
    • SPCB shares are overvalued by almost 60% at the current price level.
  • hhgregg: Industry Dynamics And Expectation Reset Should Lead To Over 50% Short-Term Upside
    PRO Top Idea HGG Thu, Oct. 30, 5:00 AM Money Investor 13 Comments

    Summary

    • Company is a misunderstood retailer that has lost favor due to declining same store sales driven by management blunders and a dismal consumer electronics environment.
    • Shift in focus to selling big box items and a looming product cycle refresh in the TV market will provide significant tailwinds over coming months.
    • Pristine balance sheet will allow for the time needed to prune the low hanging fruit and a revamped management team with PE industry ties provides additional opportunity for upside.
  • SuperCom: A Small Filing Has Huge Positive Implications
    PRO Top Idea SPCB Tue, Oct. 28, 5:00 AM Dane Capital Management, LLC 31 Comments

    Summary

    • SuperCom is one of our favorite ideas trading at less than ~8x '15 EPS based on business they've already won.
    • A recent 6-K filing shows substantial cash generation during 3Q. This filing suggests to us shares have a near 10% FCF yield on trailing run-rate cash flow.
    • Excellent visibility, high recurring revenue, and software-like margins - ~75% gross/~40% operating, should drive a premium multiple.
    • Additional wins in the core EID business or in multiple new initiatives could drive significant upside to top and bottom line in 2015 and beyond.
    • We believe the opportunity is highly asymmetric, with a downside case of $10, and a 6-12-month base case of $22, nearly a double, with potential for a far greater return.
  • Hooper Holmes: A Fast-Growing, Health And Wellness Pure-Play With Significant Upside
    PRO Top Idea HH Tue, Oct. 28, 5:00 AM Acme Capital 22 Comments

    Summary

    • After a recent 30 percent decline in the share price of Hooper Holmes, investors are being offered an incredible entry to point to own this improving business.
    • Hooper Holmes is a rapidly growing, capital-lite business that will likely be worth $150m in 5 – 6 years providing investors with annual returns well above 20% per year.
    • Hooper Holmes is the only pure-play, publicly traded Health and Wellness business making it a likely acquisition target for integrated healthcare managers.
    • Recent comparable transaction suggests downside is limited to 12.5% making this a unique asymmetrical bet for investors.
    • At current prices, investors can purchase shares at discount to Heartland Advisors’ stake and at par with J. Carlo Cannel’s recent purchases, and align themselves with the option strike price.
  • EarthLink: How A Supposed Dial-Up Company Could Have 80-250% Upside
    PRO Top Idea ELNK Fri, Oct. 24, 5:00 AM Alpha Shrugged 30 Comments

    Summary

    • We believe that EarthLink could be worth $6/share, potentially nearly double its current share price, based on fundamental cash flow analysis alone.
    • In a value recognition scenario, which we view as potentially likely, we believe EarthLink might be worth $8/share.
    • Downside case of $3 based on valuation in line with the assumption that growth rates on its key legacy businesses materially worsen with no valuation credit for its sizeable NOL.
    • The risk/reward is uniquely asymmetric with potential downside of 10% relative to potential 80-250% upside.
    • Upcoming catalysts over the next 6 months include quarterly earnings (potential guidance revisions upward) and potential value enhancement via a potential sale of all or parts of the company.
  • Zooplus: Fast Growing But Undervalued Online Retail Opportunity
    PRO Top Idea ZLPSF Fri, Oct. 24, 5:00 AM Timberwolf Equity Research 12 Comments

    Summary

    • Company is growing fast: 27.2% sales growth during 2013.
    • Valued at 0.66x current year’s sales vs. much higher multiples for peers.
    • Market leader in online pet supplies category in Europe.
    • Pet supplies category is very suitable for online retail.
    • New distribution center opened in Poland leaves room for more growth.
  • Ophir Energy Has A Potential 67% Upside
    PRO Top Idea OPHRY Thu, Oct. 23, 5:00 AM Street Smart Investor 9 Comments

    Summary

    • Ophir Energy is trading at a discount of 40% based on individual asset valuation, implying an upside of 67%. The valuation gap is likely to be closed within 12-24 months.
    • Ophir Energy has strong partners, rich assets and is fully funded through 2015 for high level of exploration and development activity.
    • Ophir Energy has multiple triggers in the form of divestment, government approval and new discoveries that will take the stock higher.
  • MV Oil Trust And VOC Energy Trust: A Tale Of Two Trusts
    PRO Top Idea MVO, VOC Thu, Oct. 23, 5:00 AM Daan Everts 33 Comments

    Summary

    • MVO has outperformed VOC massively YTD.
    • This should reverse based on expected dividend paths.
    • Both trusts appear rich versus their expected yield, MVO egregiously so.
  • Black Diamond: A Very Attractive And Timely Short With A +50% Near-Term Return Potential
    PRO Top Idea BDE Thu, Oct. 23, 5:00 AM Howie Man 15 Comments

    Summary

    • Sold off its most attractive, highest margin and only profitable brand.
    • Ongoing business with much lower margins and sharply negative earnings.
    • Now expanding into highly competitive and mature categories where it has zero prior experience.
    • Large recent discounts and unfavorable channel checks indicate these ongoing new product roll-outs are a disaster.
  • QLogic: A Logical Buy For 2015
    PRO Top Idea QLGC Wed, Oct. 22, 5:00 AM Helix Investment Research 8 Comments

    Summary

    • Despite clear signs of progress in its turnaround, shares of QLogic remain undervalued on both an absolute and relative basis.
    • Signs of stabilization in the Fibre Channel market and continued growth in Ethernet sales have allowed the company to expand its market share.
    • Despite gross margin pressures, tight cost controls have helped minimize the impact to operating margins.
    • Pristine, debt-free balance sheet, with almost 30% of market capitalization in cash.
  • Playmates Holdings: Deep NAV Discount Gives 70% Upside From Rental Properties And Ninja Turtles Toys
    PRO Top Idea PYHOF Wed, Oct. 22, 5:00 AM Hidden Value 3 Comments

    Summary

    • Playmates Holdings is an undercovered investment holding company in Hong Kong that's selling at a deep discount to NAV with positive catalysts ahead.
    • 2 main growing businesses to drive narrowing discount and stock re-rating, being (1) property investments and (2) TMNT toys.
    • (1) Property investments: Upside in rental income and valuation from prime-located commercial building with improving tenant mix including a global retail brand.
    • (2) TMNT toys: Sales upside driven by product range expansion and new markets penetration, leveraging strong entertainment pipeline in TV and movies.
    • Recent selloff offers attractive valuation now for an entry point. The selloff was driven by subsiding hype after airing of TMNT movie, but TMNT pipeline is far from over.
  • HealthEquity IPO Implies 50%+ Upside For Webster Financial
    PRO Top Idea WBS Wed, Oct. 22, 5:00 AM Camellia Capital Management 5 Comments

    Summary

    • The market is assigning virtually zero value to Webster's HSA Bank, the largest HSA custodian in the country.
    • Meanwhile, smaller HSA custodian, HealthEquity, has recently been awarded a $1B+ market value via a successful IPO.
    • With superior size and scale, HSA Bank should be awarded a valuation at least as high as HealthEquity's.
    • In addition, the company's core banking operations are outperforming peers yet valued less expensively.
    • Considering the low volatility associated with a regional bank stock and Webster's massive upside potential, its risk/reward profile is among the best we've seen recently.
  • Orocobre's Recent Retreat Might Be The Final Opportunity To Get In
    PRO Top Idea OROCF Tue, Oct. 21, 5:00 AM The Investment Doctor 6 Comments

    Summary

    • Orocobre's Olaroz project should be in production within weeks.
    • The recent contraction on the commodity markets has sent Orocobre's shares tumbling.
    • I see an easy 45% upside potential to the company's fair value.
  • Quiksilver: Restructuring The Quicksand Capital Structure
    PRO Top Idea ZQK Tue, Oct. 21, 5:00 AM Hadrian Capital Management, LLC 22 Comments

    Summary

    • Quiksilver's primary business segments have faced significant brand equity erosion and market share losses over the past twelve months, particularly across Roxy and Quiksilver brands.
    • Weak wholesale revenue led to an EMEA goodwill impairment charge of $182 million in FQ3'2014, including a $38 million non-cash charge for the impairment of DC Shoes goodwill.
    • Quiksilver's common stock is a terminal short; 17% of outstanding common shares are sold short and the common stock has realized a Y'o'Y price per share decline of -76%.
    • Quiksilver's USD-denominated senior secured and senior unsecured notes may appear to offer attractive relative value but expected recovery rates do not support current trade levels.
  • SandRidge Permian Trust: Distribution Is Safe; Could Return +55% Within 1 Year
    PRO Top Idea PER Sat, Oct. 18, 5:00 AM The Forensic Accountant 37 Comments

    Summary

    • PER’s share price has been hammered by a drop in oil prices.
    • The market correction is undervaluing PER’s near-term distribution hedges.
    • Even with the drop in oil prices, PER’s near-term distribution is on target for a near 30% forward yield.
    • An additional return in share price appreciation of more than 25% is possible in the next year.
    • PER’s fair value today is $12.72, resulting in a significant margin of safety; however, the trust is exposed to further oil price declines.
  • Check Point Software Technologies: Calling Activists As Cash Balances Continue To Increase
    PRO Top Idea CHKP Sat, Oct. 18, 5:00 AM Helix Investment Research 5 Comments

    Summary

    • Check Point's balance sheet is bloated with cash, with net cash & investments amounting to almost a third of the company's market capitalization.
    • The company's operating margins and cash flow generation are higher than any of its competitors, including Microsoft.
    • Combination of steady, but uninspiring revenue and EPS growth and continued growth in cash balances has created an attractive entry point for activist investors.
    • Check Point has a long track record of share buybacks; since 2006 the company has bought back over 20% of its shares.
  • Monster Worldwide: Deeply Undervalued With 'Monster' Potential
    PRO Top Idea MWW Sat, Oct. 18, 5:00 AM BuyTheDip SellTheRip 25 Comments

    Summary

    • MWW trades at 50% of book value even though the company is profitable, FCF positive, and repurchasing stock hand over fist.
    • Monster is poised for bookings growth in the upcoming 3Q followed by a return to sales growth in 4Q, suggesting a reversal from years of shrinking revenues.
    • Software business is a hidden, unknown asset which should result in positive mix shift favoring high-margin recurring software revenue.
    • Management has laid out 30%+ EBITDA margin targets to be achieved within 24 months. This breaches MWW’s prior peaks when the stock was $50+.
    • MWW is the most hated/disliked in its industry and risk-reward is compelling even in the absence of revenue growth.
  • GrafTech: Cost Optimization, Hidden Asset, And Panic Selling Offer Outstanding Upside For Contrarian Investors After 60% Sell-Off
    PRO Top Idea GTI Fri, Oct. 17, 5:00 AM Stanislav Ermilov 28 Comments

    Summary

    • Following this year's 63% selloff the valuation of GrafTech offers a highly compelling value proposition with solid margin of safety.
    • Departure of previous CEO and board reshuffle after proxy contest led to major shareholder controlling the company and significantly improved management.
    • Optimization of production and corporate structure improvements will produce significant cost savings with the effect being realized from the second half of 2014.
    • GrafTech has a highly valuable hidden asset in the form of Engineered Solutions segment, where value is hidden by temporary headwinds and non-recurring expenses.
    • Move to leaner corporate structure should lead to improved margins and free up additional $100mil of cash via lower inventory holding.
  • News Corp: Australian Assets Create Upside Catalyst
    PRO Top Idea NWS, NWSA Fri, Oct. 17, 5:00 AM Alpha Gen Capital 8 Comments

    Summary

    • News Corp is largely believed to be a newsprint company with little upside potential given the exposure to a dying industry. Of the total NAV, newsprint accounts for 1/5.
    • The Move acquisition adds significant digital real estate assets to their fold with a substantial market opportunity.
    • The disparate set of often hidden assets obscures a solid set of franchises with significant upside potential.
    • The news business is the pinnacle in the space with a growing underlying WSJ business along with strong other assets like Dow Jones and Barron's.
    • Over time, we think the FOX Sports 1 franchise expanding to the US (just last year) could be a significant growth driver for the cable networks division.
  • Monsanto: Engineering EPS Growth
    PRO Top Idea MON Tue, Oct. 14, 5:00 AM BluePac Partners 103 Comments

    Summary

    • Most of Monsanto's recent 10-year EPS growth can be attributed to commodity price inflation that is now unwinding and the ethanol-driven corn boom that has ended.
    • Monsanto lacks true, sustainable pricing power, and corn seed prices are now declining.
    • Monsanto is a "premium" commodity business whose profits rise with rising crop prices and fall with falling crop prices.
    • The company's profits should fall with lower crop prices.
    • I estimate Monsanto's future earnings per share to be less than $4.50.
  • GAIN Capital: Uptick In Forex Volatility Bodes Well For Profits
    PRO Top Idea GCAP Tue, Oct. 14, 5:00 AM Time & Model 6 Comments

    Summary

    • Price has drifted down throughout the year but there has been a marked increase in forex volatility in September. Forex volatility = more opportunities for GCAP to profit.
    • A near-term profit improvement appears highly probable.
    • Limited downside, probable but speculative upside.
  • Park City Group: An Imaginary Growth Story With 65% Downside
    PRO Top Idea PCYG Sat, Oct. 11, 5:00 AM Lambda Research 28 Comments

    Summary

    • 75% of receivables from Park City Group’s suspicious and largest customer, Repositrak, have yet to materialize since the beginning of their agreement in February 2012.
    • Most recent 10-K filing by Park City Group shows that Repositrak booked only $197,775 of revenue in its lifetime compared to the $3,500,000 it still owes to PCYG.
    • Repositrak represents 20% of PCYG’s total revenues and a write-down in notes receivable owing from Repositrak would drastically lower PCYG’s current grossly overvalued market cap of $158m.
    • Realistic valuation based on comparable companies point to a share price of $3.12, representing 64% downside.