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Neutral Tandem (IQNT), a telecom switching provider, is a bombed out stock with significant potential upside and minimal downside considering its exceedingly low valuation on trough numbers. This is a turnaround story with quite a bit of hair, but a significant margin of safety. Management has guided to EBITDA for 2013 of $31mm, compared to $72mm last year, the drop primarily the result of a difficult contract renegotiation with its biggest customer, AT&T (T).

With a market cap of $97mm, and $31mm of net cash, the TEV of Neutral Tandem is a mere $65mm. It's trading at 2.4x 2013 EBITDA and at an 11% Free Cash Flow (FCF) yield. Even better, if the company were to...

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