When we see a company with big top-line growth, 1000bps y/y gross margin expansion, declining op-ex (in absolute dollars), and a cash-rich, debt-free, balance sheet, with major growth-drivers/product-cycles, we tend to salivate. Unfortunately, such opportunities typically come with sky high multiples, well out of our value investing comfort zone. So we we've been thrilled in recent days to have the opportunity to build a significant position in Performance Technologies ("PT") which trades at just 5x 3Q run-rate EPS of $0.07 a share, excluding cash of $1.20 per share. We believe shares, which closed on Tuesday at $2.59, could be $7-$10 in 12 months.
If you read our articles, you will recognize several common characteristics about our stock ideas: limited research/institutional...
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