Dr. Hugh Akston
Hedge fund manager, long/short equity, value

PCTEL: Index Fund Selling Creates Opportunity

PCTEL (NASDAQ:PCTI) is a compelling investment following the massive selling by index funds after the stock was removed from the S&P 600 Index on May 30th. Severe winter weather negatively impacted Q1 results; however, our primary research indicates that business has rebounded strongly in Q2. The Street clearly does not believe management's guidance for FY 2014 but our research suggests the guidance is attainable. We expect Q2 results will serve as a catalyst for the stock to revalue higher as investors become more comfortable that FY 2014 guidance is indeed realistic.

PCTI operates in a space with attractive fundamentals such as high gross margins, stable competition, and secular growth opportunities.

Following the purge by the index funds, PCTI...

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