Ashraf Eassa
Long/short equity, contrarian, independent research, tech

STEC: Trading Near Cash Value, 140% Upside Potential By 2014

It's not often that I would bet against a company with a large cash position relative to its market price. In fact, one of my favorite metrics to look at when I begin a screen for underappreciated, deep value plays is the net cash relative to market capitalization. My view is that having a stockpile of cash to cushion several quarters of losses is a critical weapon against bankruptcy for a company that is executing a turnaround gambit. While some turnaround plays dilute their way out of a tight spot, this usually severely damages the holdings of current shareholders.

Let me introduce you to STEC (NASDAQ:STEC), a company with no debt, trading at 80% of net cash on...

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