Michael Bissell, CFA
Long/short equity, value, special situations

Lumpy Royalty Payments Are Masking CSP Inc.'s Improving Performance

Summary

Timing of royalty revenues received by CSP Inc. (NASDAQ:CSPI) associated with deployments of the U.S. Navy E-2D Advanced Hawkeye aircraft, which use signal processing systems provided by CSP's Systems segment, is masking the improving financial performance of CSP, and offering investors an opportunity to purchase shares at what I consider to be depressed prices.

Company Profile

Paraphrasing from the company's latest 2013 10-K:

CSP Inc., along with its subsidiaries, develops and markets information technology (NYSE:IT) integration solutions and high-performance cluster computer systems. The Company operates in two segments: Systems segment and Service and System Integration (NYSE:SSI) segment.

The Systems segment consists primarily of CSP's MultiComputer Division, which designs and manufactures commercial high-performance computer...

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