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Class Is Back In Session - Career Education Corp. Offers Another Bite At The Contrarian Value Apple
- CECO sold off over 30% after reporting 1Q results, creating a very compelling entry point for investors.
- 1Q results were badly misunderstood and showed a wealth of concrete evidence that a return to profitability is approaching much quicker than the market expects.
- Major catalysts are fast approaching and should culminate in the form of significant outperformance relative to the market's expectations.
- Valuation is extremely attractive - CECO trades below net cash and far below both its sum of parts valuation or any normalized absolute multiples.
- Very talented and credible new management has been assembled over the past fifteen months and is successfully executing a strong turnaround.
RMG Networks: Potential Multi-Bagger On Sharp Revenue Reversal And Elimination Of Balance Sheet Risk
- RMGN sold off 70% after first-quarter results. A combination of one-off items and complex accounting associated with revenue share agreements created a "messy" quarter.
- RMGN is poised to print strong organic revenue growth while growing margins significantly on a sequential basis throughout 2014. Bookings have vastly improved and management offered highly positive forward-looking commentary.
- The market is overly concerned with possible balance sheet risk. Management is likely working to fortify its balance sheet quickly and wouldn't issue equity at these absurdly cheap levels.
- RMGN's debt covenants are not tested until 4Q14 and are highly unlikely to be tripped. If management comes anywhere close to achieving its goals this won't be a problem whatsoever.
- Valuation is very attractive - RMGN trades well below comparable multiples, private takeover valuation, and normalized earnings power. Upside here is likely a multi-bagger if the company can execute.
Rubicon: The Next Monsanto In The Making?
- Rubicon owns 32% of ArborGen, a unique bio-forestry asset and potentially the next Monsanto of its niche resulting in exponential revenue and earnings growth.
- An ArborGen liquidity event would unlock significant value for Rubicon shareholders. ArborGen filed for an IPO in 2010 with an implied valuation of ~$475 million (subsequently cancelled in 2011).
- Recent comments in print from Rubicon suggest the company is intensely-focused on independently-listing ArborGen. This would serve as a major catalyst for Rubicon shareholders.
- Ownership is highly concentrated among insiders/hedge funds. A recent rights offering was fully subscribed by these parties, and independent sell-side coverage values RUBNF at $0.84 to $0.87 NZD (150% upside).
Great American Group: Merger Agreement Significantly De-Risks The Story, Pro-Forma Valuation Suggests Further Upside Is Ahead
- Merger with B. Riley & Co. unlocks value via the combination of highly complementary business models, substantial interest expense savings, and a vastly improved balance sheet with ample liquidity.
- Pro-Forma EBITDA and estimated earnings power suggest 30-60% upside based on peer group multiples alone, with further upside potential from organic growth within the newly-merged business.
- Significant insider ownership as well as potential uplisting to a national stock exchange could offer greater trading activity and higher exposure to a wider investor base.
Qumu: Room To Fall As Losses Widen And Revenue Growth Slows
- Recent divestiture at overly depressed valuation of the company’s only source of operating profits and cash generation leaves the ongoing business with significant operating losses.
- “NewCo.” is priced for perfection but will likely print growing operating losses and consume cash per share of over $1 in FY2014. Revenue growth is slowing.
- Market projections for NewCo.’s industry suggest a relatively small and concentrated TAM – NewCo. must now capture outsized market share while growing margins rapidly to achieve meaningful levels of profitability.
- Slowing growth in the form of a weak first quarter coupled with nominal gains in deferred revenue suggests difficult comparisons and softening revenue growth.
- Acme United: Cost Savings And Facility Acquisition Will Boost 2014 EPS Growth And ROE
- Polycom Offers Solid Risk And Reward Heading Into 2014
- Iridium Communications Offers Excellent Value For Long-Term Growth Story
- Career Education: Better And Cheaper, Story Is Much Safer
- Why Heska Could Double In 2014
- Brazil Fast Food Corp.: Strong Q3 Results Provide Further Reason To Vote No On The Buyout
- Supreme Industries: Margin Expansion Story And Cyclical Tailwinds Enhance Earnings Power
- Brazil Fast Food Corp. Buyout Conference Call Fails To Provide Sufficient Explanation
- Brazil Fast Food Corp: Still Severely Mispriced, Management Buyout Presents Asymmetric Risk/Reward Opportunity
- Issuer Direct: Crucial Acquisition Creates Runway For Growth