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  • The Royal Bank Of Scotland: Undervalued As Restructuring Moves Forward [View article]
    We think RBS' preferred stock also has decent upside potential. As one of the comments above states, RBS has several preferred issues trading at large discounts to par, with good yields. Assuming the bank continues to recover, RBS' preferred shares should rise alongside their common stock, albeit to a lesser degree, but that will be made up for in part by dividend payments; it remains to be seen when RBS can restore its common stock dividend.
    Sep 29, 2013. 01:01 PM | 1 Like Like |Link to Comment
  • SeaChange: Q2 Results Highlight Return To Growth And Continued Upside Potential [View article]
    Per SeaChange's Form 4 filings that we examined on the SEC's website, there were no transactions conducted by Starboard in July.
    Sep 16, 2013. 07:40 PM | Likes Like |Link to Comment
  • Cascade Microtech: Undervalued Amidst A Global Semiconductor Recovery [View article]
    It's possible that offers have been made, but the board didn't approve of the price. Given Cascade's size, M&A rumor leaks are unlikely to be given much, if any prominent news coverage. A takeover is certainly possible, but our thesis was based on Cascade remaining a standalone company.
    Sep 16, 2013. 07:38 PM | Likes Like |Link to Comment
  • Aware, Inc.: Gains To Come As The Market Becomes Aware Of True Profitability [View article]
    Aware's 2013 proxy statement does list her ownership, as well as that of James Stafford, but we decided to focus on purely direct equity stakes of the company's board of directors and executives, not those of the extended Stafford family. But if those are included, insider ownership does rise by meaningful levels.
    Sep 15, 2013. 02:20 PM | Likes Like |Link to Comment
  • Aware, Inc.: Gains To Come As The Market Becomes Aware Of True Profitability [View article]
    No, we have not heard of IWSY, but will look into it
    Sep 15, 2013. 02:18 PM | Likes Like |Link to Comment
  • SeaChange: Q2 Results Highlight Return To Growth And Continued Upside Potential [View article]
    The answer is both; the bulk of SeaChange's revenue comes from initial sales, but the company does generate revenue from maintenance and technical support agreements that it signs with its customers when it completes a sale.
    Sep 12, 2013. 12:36 AM | Likes Like |Link to Comment
  • Keating Capital: Misunderstood, With Catalysts To Come In The 2nd Half [View article]
    We've owned KIPO since early 2013, upon stumbling upon the company while doing research on GSV Capital. We too received such a message, and although certainly understand the appearance of a conflict, we stand by the research. It would be one thing to simply hear Mr. Keating's view of the company and then publish that essentially verbatim. That would indeed present a conflict of interest, and wouldn't be worth reading (or publishing for that matter), since a recommendation based solely on the comments of the CEO is not really a recommendation at all. But, a recommendation based on publicly available financial data, analyzed in conjunction with input from the company's CEO to clarify certain points of possible contention could be valuable. An example would be the company's valuation process, which has been criticized in the past. Level 3 assets are inherently difficult to value; this is a fact of life for firms such as KIPO, GSVC, or SVVC, and there will always be detractors, who certainly have a right to criticize the model, given its inherent risks. Our conversation covered this area of contention. Naturally, Mr. Keating defended KIPO's valuation methods, saying they are as rigorous and accurate as possible. But are they? Alone, that statement from the CEO means little if anything. But the data does mean something. Embedded within the company's SEC filings is data that shows that to date, for all but one of the company's that have exited KIPO's portfolio, each company was valued below its IPO price in the quarter prior to going public. And Mr. Keating noted that the last company, Corsair, was essentially a victim of timing, having attempted its IPO after Facebook's botched offering froze the market. We also note that the bulk of the points in this article are based on publicly available data, either from KIPO's SEC filings, or various press releases, not on statements made by Mr. Keating that we simply parroted back with a blind belief in their face value.
    Sep 2, 2013. 03:07 PM | 1 Like Like |Link to Comment
  • Keating Capital: Misunderstood, With Catalysts To Come In The 2nd Half [View article]
    The 2 and 20 model refers not to overall expenses, which include things like general and administrative expenses or legal fees, but the investment advisor fee structure, which is based only on base management fees and incentive fees. As we noted within the text, on this front, KIPO's advisor fee model is in-line with the averages for the externally managed BDC sector.
    Sep 2, 2013. 02:48 PM | Likes Like |Link to Comment
  • Keating Capital: Misunderstood, With Catalysts To Come In The 2nd Half [View article]
    There are several nuances to SharesPost and Second Market (their chief competitor). The chief issue with these two sites is that because they exist to link buyers and sellers of the company in question, and there may very well be limited current and complete financial information for the company in question. As the article mentions, access to direct financial information is a must for KIPO, and it could be a requirement for many other investors as well, thus limiting their ability to use these sites. And from a user perspective, these 2 sites require investors to be accredited, meaning they need to earn more than $200,000 per year ($300,000 with a spouse) or have $1 million or more in assets. That limits the potential user base, given that not all investors can meet those thresholds, but still want to have exposure to privately held companies.
    Sep 2, 2013. 02:41 PM | Likes Like |Link to Comment
  • Keating Capital: Misunderstood, With Catalysts To Come In The 2nd Half [View article]
    To our knowledge they are unrelated
    Sep 2, 2013. 02:31 PM | Likes Like |Link to Comment
  • JetBlue: Double-Digit Upside As Takeover Prospects Highlight Undervaluation [View article]
    United and American use Embraer aircraft in their fleets as well
    Aug 23, 2013. 12:20 PM | Likes Like |Link to Comment
  • U.S. Cellular And TDS: Buy The Milk, Get The Cow On The Cheap [View article]
    Based on our understanding, TDS is able to deduct the dividends it receives from US Cellular, due to the dividends received deduction (DRD) clause of the tax code. The DRD clause allows for a company to avoid triple taxation of the dividends it receives, depending on its ownership stake in the company paying the dividend. Because TDS owns more than 80% of US Cellular, it is able to deduct 100% of dividend payments (a stake of below 20% grants a 70% deduction, stakes between 20 and 80% get an 80% deduction, and stakes above that receive 100%)
    Aug 22, 2013. 07:41 PM | 1 Like Like |Link to Comment
  • JetBlue: Double-Digit Upside As Takeover Prospects Highlight Undervaluation [View article]
    Perhaps, but what happens when American makes an offer? The board has a fiduciary duty to uphold to shareholders, and the attitude against a merger may not hold up when they offer $9 or $10 for the company.
    Aug 22, 2013. 01:31 PM | Likes Like |Link to Comment
  • JetBlue: Double-Digit Upside As Takeover Prospects Highlight Undervaluation [View article]
    Paul, several points to make: First, although JBLU's management team is committed to preserving the comapny's culture, the board has a fiduciary duty to the company's investors. If American (or maybe US Airways) were to offer something with a meaningful premium, would the desire to preserve the culture be enough to overcome shareholders that want to see a good return on their investment? Second, a foreign company cannot buy JBLU; federal law bars any foreign entity from owning more than 25% of a domestic airline (http://slate.me/1d5LYVF), this is why Virgin America is only 25% owned by Richard Branson, with the remainder owned by domestic investors. At most, JBLU could sell a piece of itself to a foreign carrier looking for a deeper strategic presence in the US. As to the issue of costs, we believe that JetBlue's premium offering, if executed correctly, could provide for solid cost leverage. The spread between typical transcontinental premium fares and what JBLU charges is quite wide, and with proper execution, they can likely undercut legacy carriers, all while boosting margins above their present rates. We think that their Q4 results will shed some good light on this when they give guidance for 2014. As for CPA, we think they have a good position in the market, and they've been posting what we think are good results, with costs under control, a decent (for the industry) balance sheet, and good exposure to growth in Latin America.
    Aug 21, 2013. 04:59 PM | Likes Like |Link to Comment
  • City National: Expanding The Franchise And Improving Its Quality [View article]
    Thank you, glad to see the piece was enjoyed
    Aug 14, 2013. 11:01 PM | Likes Like |Link to Comment
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