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PRO Articles
PRO articles cover stocks that fly under most investors' radar screens.
  • Janus Capital Group Post Mortem: Good Things Can Happen To Cheap Stocks
     • Today, 4:55 AM JNS 1 Comment

    Summary

    • Janus recently announced the addition of bond guru Bill Gross to assist with the roll-out of the company's growing fixed income offerings.
    • The story has shifted from a mediocre asset manager trading at a ultra low multiple of FCF to a fairly valued asset manager with a rosy outlook.
    • We believe Janus is fully priced at a 7% LTM FCF yield and 9.7x EBITDA.
  • Marchex Post-Mortem Update
     • Sat, Sep. 20 MCHX 3 Comments

    Summary

    • The short thesis has played out at Marchex, with the equity declining ~66% since July.
    • Re-cut of the Allstate pricing has served as the catalyst, supporting the notion that Marchex's offerings are non-differentiated.
    • Marchex price action reflects the perils of investing in businesses with significant customer and vendor concentration.
  • Currency Exchange International: Compounding Cash Machine At A Deep Discount To Private Market Peers
     • Tue, Sep. 16 CURN 12 Comments

    Summary

    • A unique opportunity to own a compounding machine with organic growth in excess of 20% and high returns on capital.
    • OSFI approval to transition into a 'Banker's Bank' is a near-term hard catalyst for value creation.
    • Currency Exchange trades at a steep discount to recent private market transactions. We believe shares at minimum have upside potential of ~70%.
  • Murphy USA: Post Mortem Of A Successful Spin-Off
     • Tue, Sep. 9 MUSA 2 Comments

    Summary

    • Since the original spin-off, investors have realized the massive mis-pricing.
    • Although the share price has reached our upside case estimates, recent private market transactions support higher upside.
    • At the end of the day, Murphy USA operates in a competitive industry with significant headwinds which were more than priced in at the spin.
  • Quartet Merger Rights: 40% Upside For A Short-Term Event Driven Investment
     • Thu, Sep. 4 QTETR, QTET 35 Comments

    Summary

    • Quartet Rights offer investors the opportunity to re-create Quartet common at $7.20 per share, or 40% upside if the rights trade up to the common.
    • A near-term event is in place to unlock value. On September 29th, shareholders will vote on the Company's merger with Pangaea Logistics.
    • Quartet boasts strong sponsorship through Eric Rosenfeld of Crescendo Partners and famed value investor Joel Greenblatt.
  • Reiterate Papa Murphy's Short Thesis: Q2 2014 Update
     • Wed, Sep. 3 FRSH 6 Comments

    Summary

    • Papa Murphy's Continues to be a compelling short with ~40% upside to the short thesis.
    • Franchisee lawsuits have continued to intensify with a second lawsuit filed. Furthermore, we continue to see franchisee bankruptcies on the horizon with a recent bankruptcy in multi-unit franchiser in Texas.
    • FRSH has recently initiated a royalty waiver program for new franchisees, signaling to use that the Company is having issues growing in new markets.
  • Marchex: Another Bubble Basket Stock
       • Sat, Jul. 12 MCHX 8 Comments

    Summary

    • Marchex is a low margin business with poor returns on capital trading for a staggering ~49x EBITDA.
    • The Company is heavily reliant on search engines such as Google and Yahoo combined with a concentrated customer base.
    • The bull thesis overlooks the Management team's poor capital allocation skills, numerous business flip-flops and finally insider sales.
  • Papa Murphy's Holdings Inc: Another Gift From The JOBS Act
       • Fri, May. 30 FRSH 25 Comments

    Summary

    • Papa Murphy's is a recent JOBS Act IPO and a compelling short at the current price.
    • The Company is priced for perfection, as the business operates in a low barriers to entry environment combined with a over-levered balance sheet.
    • Further headwinds include franchisee issues, potential upcoming exit of the Company's financial sponsor, reduction in SNAP benefits and the closure of a sales tax loophole.
  • Digital Cinema Destinations: Investing In A Middle-Market Roll-Up Without The Private Equity Fees
       • Fri, Feb. 21 DCIN 12 Comments
  • Franklin Financial: Thrift Shopping Among Community Banks
       • Oct. 23, 2013 FRNK 2 Comments
  • Charter Financial: Post-Second Step Convert Trading Below Its Tangible Book Value
       • Oct. 8, 2013 CHFN 5 Comments
  • Lumber Liquidators: Unsustainable Valuation For A No-Moat Business
       • Oct. 1, 2013 LL 15 Comments
  • Chico's FAS: A Growth Story At A Value Price
       • Sep. 26, 2013 CHS 16 Comments
  • Ascena Thesis Reaffirmed: Positive Developments, Undervalued Business Point To Substantial Upside
       • Sep. 26, 2013 ASNA 4 Comments
  • American Eagle Outfitters Offers Investors Multiple Ways To Win
       • Sep. 24, 2013 AEO 27 Comments
  • Lexmark: Strong Free Cash Flow Generator With Catalysts In Place
       • Sep. 14, 2013 LXK 5 Comments
  • Paradise, Inc.: A Net-Net That Is Ripe For A Buy-Out
       • Sep. 11, 2013 PARF 12 Comments
  • Murphy USA: Follow The Spin-Offs
       • Sep. 7, 2013 MUSA 25 Comments
  • Weight Watchers: Investing In A Public LBO
       • Sep. 3, 2013 WTW 14 Comments
  • Ascena Retail Group: Leading Market Share And Aligned Management Below Its Private Market Value
       • Aug. 30, 2013 ASNA 9 Comments
  • Janus: Abnormally High Returns On Invested Capital At A Low Multiple Of Free Cash Flow
       • Aug. 24, 2013 JNS 18 Comments
  • Cowen Group: Trading Below Liquid Assets With An Asset Manager Thrown In For Free
       • Aug. 17, 2013 COWN 13 Comments
  • Tellabs: Discounted Assets With A Catalyst
       • Aug. 8, 2013 TLAB 9 Comments