Seeking Alpha

Dr. Hugh Akston

 
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PRO Top Ideas
Top Ideas are high-conviction long or short ideas focused on market mispricings with asymmetric risk/reward profiles.
  • Autobytel Is A Takeover Target In A Consolidating Industry
       • Fri, Sep. 26 ABTL 13 Comments

    Summary

    • 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.
  • Invacare Dramatically Undervalued Due To Temporary FDA Issue
       • Thu, Jul. 31 IVC 27 Comments

    Summary

    • 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
       • Tue, Jul. 22 ITI 22 Comments

    Summary

    • 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
       • Tue, Jun. 10 PCTI 4 Comments

    Summary

    • 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.
  • VASCO Data Security To Benefit From Heartbleed Bug, Opportunity To Unlock Value Via Tender Offer/Special Dividend
       • Thu, Apr. 17 VDSI 9 Comments

    Summary

    • 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
       • Tue, Apr. 1 DYSL 6 Comments

    Summary

    • 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.
  • Ruby Tuesday: A Ruby In The Rough
       • Sat, Feb. 22 RT 45 Comments
  • Emulex: Market Is Missing The Activism Impact
       • Dec. 18, 2013 ELX 16 Comments
  • Strategic Review Should Unlock Sizeable Value For Cbeyond
       • Dec. 5, 2013 CBEY 15 Comments
  • Gas Natural: Investigation And Insider-Selling Suggests Trouble Ahead
       • Nov. 23, 2013 EGAS 25 Comments
  • Costa Buyout Price Is Too Low, Fair Value $24-28
       • Nov. 12, 2013 ATX 3 Comments
  • Performant: Short-Term Noise Presents Long-Term Opportunity
       • Oct. 11, 2013 PFMT 8 Comments
  • Questionable Accounting Masks True Risk For Harvest Natural
       • Aug. 29, 2013 HNR 11 Comments
  • NTELOS Investors Are Leaping To The Wrong Conclusion
       • Jul. 19, 2013 NTLS 18 Comments
  • Lone Pine Not Alone In Resolving Covenant Issues
       • Jul. 2, 2013 LPRI 40 Comments
  • AdCare Tender Offer Looks Improbable
       • May. 17, 2013 ADK 10 Comments
  • Unlocking The 'Value' Of LifeLock
       • Mar. 30, 2013 INTX, LOCK 35 Comments