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

Image Sensing Systems: An Undervalued Opportunity In The Intelligent Traffic Solutions Industry

Image Sensing Systems (NASDAQ:ISNS) "develops and markets video and radar processing products for use in traffic, security, police and parking applications such as intersection control, highway, bridge and tunnel traffic management, venue security, entry control, license plate recognition and traffic data collection." Stated differently, ISNS is a play on the growing intelligent traffic solutions theme.

Currently valued at $25 million ($19 million enterprise value after backing out $6 million in net cash), ISNS is providing for an asymmetric investment given a (1) unique operating model; (2) exposure to an attractive, growing intelligent traffic solutions industry; (3) a low price relative to value; and (4) the potential for a takeover offer.

First, to the operating model. ISNS is comprised...

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