We found Xyratex (XRTX) when we noticed that activist fund Baker Street Capital (BSC) had invested an unprecedented half of their portfolio late last year and now owns 23% of the company. BSC is a successful activist investor with a great track record. Recently, Sears (SHLD) is up more than 30% since BSC released its long presentation in early September.
Xyratex is trading below liquidation value, has 30% upside to break-up value, and 70% upside once the market realizes how profitable it will be next year. This should begin imminently. On October 3rd, the company will disclose $105 million worth of contract wins that partner Cray (CRAY) has already announced...
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