LeapFrog Shares Could Double In 2013

LeapFrog (LF) is exactly the type of stock we love. It's cheap, has optionality that could create meaningful upside, is gaining significant market share, has an underappreciated margin of safety, and with significant short interest, is not uniformly loved by the street. Given the company's significant insider buying, outstanding track record over the last 2 years - including 7 consecutive earnings beats - we are shocked shares currently trade at $8.03 and have experienced a recent spike in short interest. With $3+ in projected cash per share at the end of 1Q and $4 of NOLs per share based on NPV value (we have not seen this mentioned in sell-side reports), we see limited downside. We believe...