John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Waze Sale To Google Proves Telenav Bullish Case

Telenav (NASDAQ:TNAV) trades at a distressed valuation due to fears management will be unable to transition the business without depleting its large cash hoard. A fortress like balance sheet and high EBITDA (albeit declining) limit downside risk while strong growth in new businesses and the possibility of a buyout provide significant upside potential.

Company overview

TNAV provides location based services (LBS) through mobile phones, tablets, computers, cars and apps and generates revenue from wireless carriers, automobile manufacturers, app developers and advertisers. TNAV completed its IPO in May 2010.

Investment thesis

The current valuation implies little value for the declining core wireless carrier subscription business and growing auto OEM, premium LBS and mobile advertising businesses as net cash (no...

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