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

Comverse Is An Undervalued Spin-off

Comverse (CNSI) trades at a distressed multiple due to concerns over the effect of the commoditization of voicemail and text messaging services on its largest operating segment. However the large net cash position and reduced cash burn rate limit downside risk while the growing exposure to fast growing trends such as mobile data traffic and cloud-based managed hosting provide significant upside potential.

Company overview

CNSI provides telecom solutions to more than 450 communication service providers (CSPs), including a majority of the 100 largest wireless network CSPs, in over 125 countries. CNSI operates primarily through two business segments:

Comverse business support systems (BSS), which provides converged prepaid and postpaid billing and active customer management systems for wireless, wireline and...

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