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Autobytel Is A Takeover Target In A Consolidating Industry
- The industry is consolidating, market is ripe for ABTL to explore a transaction.
- ABTL too small to be a public company, company spends ~20% of net income on public company costs.
- Underlying business fundamentals are healthy. Company is growing, profitable, free cash flow positive.
- Recent M&A transactions in the industry suggest ABTL should fetch $17+ per share in a sale.
Mace Security: Prominent Brand At Fire Sale Price
- MACE is now at an inflection point after a multi-year turnaround under the stewardship of activist investors.
- Balance sheet has been cleaned up, operations have been consolidated, and all non-core businesses have been divested. Company now poised to enter growth phase.
- Positive secular demand trends for MACE products: demilitarized police and improved school security.
- Attractive underlying business economics and profit potential. Hidden value associated with the brand name and NOL’s.
- Likely “up or out” conclusion for shareholders. Company either grows rapidly or is sold. Estimated intrinsic value is $0.70 per share.
Invacare Dramatically Undervalued Due To Temporary FDA Issue
- IVC is global leader in mobility and seating products, but it has been dramatically under-earning for the past two years due to an FDA consent decree.
- Once FDA consent decree is lifted, combination of $130m high-margin revenue coupled with $10m less of compliance expenses will have an explosive impact on FCF and EPS.
- FDA action pertains to quality control systems NOT safety of product or quality of product.
- We believe this saga with the FDA is entering the 9th inning and expect the consent decree to be lifted within the next 12 months.
- We see the stock offering a compelling 7.4x risk/reward opportunity and see intrinsic value being $26 per share (+73% upside).
Iteris: Accounting Delay Offers Compelling Entry Point
- 10-k was delayed due to a mix of bad luck and poor execution; however, we do not see this delay impacting the intrinsic value or being a harbinger of further bad news.
- Our research indicates the revenue recognition question only impacts the timing of revenue and pertains to less than 2% of total revenue.
- Our research also indicates the financial data on the cash flow statements and balance sheets is correct and will not be restated.
- The underlying business is experiencing fundamental strength. With stock trading below book value and pristine balance sheet ($20m in cash and zero debt), we see an attractive risk/reward profile.
- We estimate the intrinsic value for ITI is $2.40 per share or +55% upside.
PCTEL: Index Fund Selling Creates Opportunity
- PCTI offers an extremely favorable risk/reward opportunity following massive selling by index funds after the stock was removed from the S&P 600 Index.
- We strongly urge the Board to conduct a tender offer for 20% of the shares outstanding at $8 per share.
- Severe winter weather negatively impacted Q1 results; however, our primary research indicates that business has rebounded in Q2.
- We expect Q2 results will serve as a catalyst to revalue the stock as investors become more comfortable that FY 2014 guidance is attainable.
- PCTI pays a dividend of 2.2% which compensates investors while they wait for investor sentiment to improve.
What's In Einhorn's Bubble Basket?
- Greenlight has a decidedly bearish view on the valuation levels of today’s market darlings.
- There is a huge gap between the bubble price and the point where disciplined growth investors become interested buyers.
- We created a metric dubbed the “Insanity Index”, which we use to gauge the euphoria that is baked into these stocks.
VASCO Data Security To Benefit From Heartbleed Bug, Opportunity To Unlock Value Via Tender Offer/Special Dividend
- VDSI positioned to benefit from Heartbleed bug raising awareness of fixed password vulnerability.
- Wall Street expectations for FY 2014 look too low, Q1 earnings should be catalyst.
- VDSI should conduct tender offer for 10% of the shares outstanding at $8 per share and pay a one-time dividend of $1 per share.
- The economic situation in Europe is on the mend, will benefit VDSI order intake.
Dynasil Turnaround Not Priced Into The Stock
- DYSL has a fundamentally attractive business model with patents and IP value consistently accruing to the company.
- New management team has restored the company to profitability, divested unprofitable business lines, paid down a significant amount of debt, and regained compliance with its debt covenant ratios.
- We believe DYSL is actively in talks with new lenders to refinance out its senior debt, which should be a catalyst for the stock to rerate higher.
- Stock is currently trading at half of its intrinsic value. Fair value at $3.00 per share equates to over +100% appreciation from here.
Plug Power: Is This Time Different?
- We expose the subsidized maintenance for Wal-Mart and the costs incurred by PLUG, demonstrate why the Walmart order will lead to accelerating losses for PLUG.
- Equity issuance on March 6th was completely unnecessary, proves management sees the stock being overvalued.
- Price action has all the signs of a classic bubble driven by hype and technical factors.
- Ruby Tuesday: A Ruby In The Rough
- 8 Fictions Of Plug Power
- 8 Facts About Plug Power
- The Shoes Begin To Drop At Gas Natural
The Easiest Trade Of 2014: Long Value/Short Growth
Dec. 22, 2013 • 23 Comments
- Emulex: Market Is Missing The Activism Impact
- Strategic Review Should Unlock Sizeable Value For Cbeyond
- Unilife: A Look At The Novartis News
- Gas Natural: Investigation And Insider-Selling Suggests Trouble Ahead
- Market Wakes Up To Harvest Natural Woes
- Costa Buyout Price Is Too Low, Fair Value $24-28
- Performant: Short-Term Noise Presents Long-Term Opportunity
- A Closer Look At Harvest Natural's Improper Accounting
- Questionable Accounting Masks True Risk For Harvest Natural
- NTELOS Investors Are Leaping To The Wrong Conclusion
- Lone Pine Not Alone In Resolving Covenant Issues
- AdCare Tender Offer Looks Improbable
- Unlocking The 'Value' Of LifeLock
- Iamgold Is A Great LBO Target
- Time To Go Nuts With Diamond Foods
- Gentiva In Better Health Than The Stock Price Implies
- Upside for Regis Corporation in a Growing Economy or Recessionary Environment
- Why the Market Is Wrong on Warren Resources