Money Trees
Deep value, growth, momentum

Power Solutions Is Running Out Of Juice: 60%-70% Downside

Power Solutions International Inc. (PSIX)

Note: PSIX now trades on the NASDAQ

Thesis

PSIX is a great short candidate based the following factors:

  1. Weak cash flow and lofty analyst estimates likely to get cut
  2. Nosebleed valuation and massive insider selling
  3. Uncertainty and low visibility in "growth" markets
  4. Cyclical end markets and customer/supplier concentration

(click to enlarge)

Company Overview

PSIX assembles and distributes a wide range of power systems to OEMs. Its products are used in various end markets including power generation (30%), forklifts (24%), oil/gas (9%), and other industrial applications like commercial sweepers and wood chippers. The company plays in the alternative fuel space and most of its power systems are designed to run on liquefied natural gas...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details