Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Gilat Shares Still Have Higher To Go

Executive summary:

  • Gilat Satellite Networks (NASDAQ:GILT) remains an attractive investment with a strong $51 million net cash balance (23% of the market cap) and numerous growth opportunities.
  • Significant cost restructuring is in place which should improve profitability beginning in Q1 2014.
  • Sequestration issues should become less salient as Gilat expands its revenue base to adjacent markets.
  • Recent sale of SpaceNet subsidiary allows Gilat to focus on core competencies with higher margins, and galvanizes the balance sheet.

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Shares of Gilat Satellite Networks ("Gilat") have performed well (+20.5%) since I recommended them in December, handily outpacing the S&P 500 Index (+3.5%) over the comparative time frame, providing 17% of "alpha."

In that narrative, I suggested that Gilat sold off...

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