This Week's Outstanding Performance Award Winners: Matthew Dow And Inefficient Market

Includes: ASTC, UBNT
by: SA Editor Daniel Shvartsman


Two great calls earn each author $2500 as Seeking Alpha Outstanding Performance Award Winners.

Both calls were in the tech space, and both calls tripled over the past 18 months (or less).

Each author updated his respective case on the company; each expects more upside in the respective calls.

Dear readers,

We have another pair of great Outstanding Performance award winners to announce this week. The two calls were both long calls, both on tech-related companies, and both stocks tripled after the authors made their respective calls. Each award comes with a payment of $2,500 for doing an outstanding job of helping Seeking Alpha readers find alpha.

This week's Outstanding Performance Award winners are:

  1. Matthew Dow for his long idea on Ubiquiti Networks (NASDAQ:UBNT) published in January 2013. Return to date: +282%
  2. Inefficient Market for his long Top idea on Astrotech Corporation (NASDAQ:ASTC) published in October 2013. Return to date: +209%

An update to each thesis is available in the comment streams of each original article, linked above. The ASTC call is part of the SA PRO equity research archive available exclusively to SA PRO subscribers, but we have unlocked the winning articles to all readers for the next 48 hours in honor of its winning the award. The UBNT article will also join the PRO archive after 48 hours.

About the winners

Matthew Dow is an IT consultant and CFA candidate who focuses primarily on small-cap value and growth at a reasonable price investing opportunities. With his background in technology, Matthew often focuses his research on this sector, and he's unearthed several gems, including LOGI, VNET, and VCI.

Matthew's first article on UBNT came in January 2013. The company had been trading near trough levels after suffering from counterfeiting issues with its airMax line. Pointing out the company's low valuation and its success in addressing the problem, Matthew suggested there was significant room for upside. He subsequently continued to follow the company through 2013 and this year, writing up five more articles updating his (still bullish) views on the stock (three of those articles are in the PRO archive). The call played out perfectly, as UBNT's growth and resolution of the counterfeiting concerns led it to regularly beat estimates throughout 2013 and the first half of 2014. The stock responded, rising over 250% in 2013 and providing the aforementioned tripling for investors who followed on Matthew's original idea.

Inefficient Market is a value-focused private investor with a B.S. in finance from Ohio State University. He's established himself as an authority in the micro-cap space, with a focus on tech stocks, and had a habit of identifying cheap stocks that eventually got bought out. Both Multiband and LML Payment Systems were Inefficient Market picks that produced outsized returns after bigger companies bought them out.

Astrotech fits into this pattern, though not exactly. Inefficient Market had the aerospace company on his radar screen for a couple years, writing two articles in 2012. Last October, he updated his thesis after the company filed its 10-K. Despite a delay in the filing, the 10-K had big news for the company, he wrote: the company had achieved profitability, with its cash cow satellite processing system more than making up for its loss-leading spectrometric division, known as 1st Detect. Highlighting the hidden value in these two divisions and the tangible-assets on the balance sheet to back the share price, he forecast a lot of room for the stock to run. The stock took off from there, peaking at just shy of a quadruple from where it was when Inefficient Market wrote it up in October. This May, Lockheed Martin announced that it was buying ASTC's satellite business at a price above the company's entire market cap. It marked another acquisition-related win for Inefficient Market, though the company will remain independent with its 1st Detect business extant.

Congratulations to this week's winners! Look out for a new pair of Outstanding Performance award winners next Monday, and each Monday following.

And here's a page with all previous winners.

More about Outstanding Performance awards

Seeking Alpha aims to help investors outperform the markets. In awarding authors of outstanding stock ideas that played out, we hope contributors will be motivated to share more outstanding long and short ideas with our readers - which benefits everyone.

Every week, we'll be searching through our long and short ideas archives looking for outstanding stock ideas that played out, and awarding two $2,500 "Outstanding Performance" prizes.

Here's what we'll be looking for:

  1. Performance: Above all, we're looking for ideas that made SA readers money. Risk matters, so we'll be looking at the stock's market cap, Sharpe ratio, etc. as well.
  2. Confluence: Every idea has a thesis. Did the idea play out for the reasons proposed or not?
  3. Compelling: For an idea to be outstanding, it needs to be sufficiently convincing that a reader would have been compelled to take a deeper look at the stock and potentially take a stake. In assessing compellingness, we'll be looking at a number of factors including article comments (how did readers react?), historical performance (does the author have a track record of well-thought-out stock ideas?), voice of expertise (does he/she come across as someone who has unusual insight into the stock?), and how thoroughly the article covered key issues (reasons for market mispricing, catalyst(s), competitive landscape, company management, key risks, etc.). In other words, we'll be looking for the same things readers look for when assessing an idea.

To qualify for an award, the idea needs to have been submitted exclusively to Seeking Alpha. We will also be asking award winners to publish an update to their thesis, either as a comment to the article or as a standalone article.

Generally, we'll be looking for longer-term ideas that offered meaningful upside to readers. We'll be going back as far as two years or even further. We may also reward ideas that played out outstandingly over a shorter timeframe. But we will not be using Outstanding Performance awards to reinforce extreme short-term price volatility.

To get exclusive access to these articles after they are selected, as well as early and archival access to many of our top performing ideas, subscribe to SA PRO.

We'll be announcing Outstanding Performance award winners in Wall Street Breakfast, in the Today in SA PRO newsletter, and in a standalone article like this one.

If you have great stock ideas, why not become a Seeking Alpha contributor yourself? Colin and his contributor success team will make it easy to share your ideas with tens of thousands of readers.