Ameresco (AMRC) looks like a solid company but gives an extremely boring roadshow presentation, so it’s a bit painful to listen to all 40 minutes of it. But the company is large (>$400M annual revenues), profitable, and has strong visibility thanks to long-term contracts and projects. The focus on improved energy efficiency, combined with some reuse, is a solid foundation for growth since it offers both ROI and taps into the demand for more responsible use of resources. The key for potential investors in Ameresco is getting the right valuation. It’s a very solid business that will offer good returns as long as the shares don’t get overpriced. We will be conducting an IV analysis on them.
Camelot Information Systems (CIS) has already priced, but we only just had the chance to listen to the roadshow. The story and the management team look solid enough (despite the deal being priced at the low end and trading under that today.) Some of the lack of interest is best explained by the recent expansion of the “China discount” that applies to technology companies there. We’ve see it with well-established companies there so it’s not surprising that it’s also true in the IPO market as well. For example, this company reminded us of CDC Software (CDCS), which has declined from $11 to $7 in the last three months. Another is Telestone (TSTC), which has declined from $20 to under $10 in the same timeframe, again on no real news. Telestone is now trading at about 5x operating earnings (!)