Seeking Alpha

Inefficient Market

 
View as an RSS Feed
View Inefficient Market's Comments BY TICKER:
Latest  |  Highest rated
  • Why I'm Buying Aviat Networks Hand Over Fist [View article]
    It appears cyclical softness in the microwave backhaul industry is finally starting to shift and Aviat now appears to be in a great position to capitalize. The recent corporate restructuring has reduced the company's breakeven level considerably and bodes well for future cash generation and earnings. On the company's fiscal 2014 fourth quarter conference call, management indicated they remain bullish about the future. Some of the highlights included:
    -Expecting sequential revenue growth every quarter in fiscal 2015
    -Expecting margin improvements starting in Q1
    -Backlog is the strongest it has been in a long time
    -Cash breakeven in 1st half of fiscal 2015, then cash generation in second half

    Additionally, international markets that have been weak recently are starting to show signs of rebounding. In Africa, Aviat's largest customer in the region, MTN Group, is guiding for an increase in capex of 50% by the end of the year. In the US, carriers continue their 4G LTE buildout, which should provide stable business for the foreseeable future.

    The stock is still trading for just a $66m enterprise value with estimates for revenue of around $370m in fiscal 2015. The industry does remain competitive and I wouldn't rule out a merger or acquisition. Obviously, I was more bullish on the stock when it was cheaper, but I still think there is money to be made here. My 6 month target is $2.50.

    Disclosure: Long
    Sep 15 07:31 PM | Likes Like |Link to Comment
  • This Week's Outstanding Performance Award Winners: Matthew Dow And Inefficient Market [View article]
    Thanks Mike. It's just what the old ego needed, haha.
    Aug 26 10:42 AM | Likes Like |Link to Comment
  • This Week's Outstanding Performance Award Winners: Matthew Dow And Inefficient Market [View article]
    Thanks to SA for taking the time (and money) to present this award. Programs like this go above and beyond of what I expect as a contributor.
    Aug 25 11:17 AM | 1 Like Like |Link to Comment
  • Astrotech Is Still Significantly Undervalued Despite Recent Move [View article]
    Update:

    Selling the space operations division to Lockheed Martin was the right move. While that division did provide for stable income, it was never going to generate the cash needed to get 1st Detect/Astrogenetix off the ground. And 1st Detect is really where the potential lies for this stock. A new partnership with Rigaku has validated the technology and there remains a massive untapped market for its services, ranging from healthcare to industrial control. Even after a considerable appreciation in stock price, the market is still effectively valuing 1st Detect at $0. Now, with a large runway of cash and a singular focus, 1st Detect can realize its true potential, which in my opinion could be worth hundreds of millions of dollars.

    The thesis on this investment unfolded nicely, as when the stock was trading below $1 it was obvious the market was not even coming close to fully valuing its real estate and facilities. Effectively, those facilities are what Lockheed decided to buy for over $3 a share in cash. While the company is now less diversified having sold the space division, it will be sitting on a large cash hoard when the deal closes. It remains to be seen how much money the company ultimately pours back into 1st Detect, but the payoff could create a huge payoff if the potential is only a fraction of what I think it could be.

    Disclosure: Long
    Aug 21 11:20 AM | Likes Like |Link to Comment
  • Emerson Radio: Update, Going Neutral [View article]
    Yeah, but just like in Q3 they had to record a one-time $4m expense, so without that they would have turned a profit.

    There is tremendous value in this company and any first year business student could see how to unlock it. The million dollar question is if Ho and his cronies finally decide to stop enriching themselves at the expense of minority shareholders. They did at least hire Lazard to explore a sale for the company, but since there is no way around Ho's controlling interest, he ultimately makes the decision.

    I think the Grande bankruptcy put this company in a state of limbo for the last 3 years because it was unclear who was going to get their controlling stake. Now that their bankruptcy is nearly complete and it appears Ho/Grande will get to hold onto their shares, I think the controlling shareholder's interests are finally aligned with that of minority holders.
    Jun 28 12:30 PM | Likes Like |Link to Comment
  • Emerson Radio: Update, Going Neutral [View article]
    My guess is someone eventually buys this, shuts down the manufacturing, and turns it into a purely licensing company...which is what should have already happened. Unfortunately, management is too interested in milking the company at the expense of shareholders to transition it themselves. Now that it looks like Grande will get to hold onto their stake in the company, hopefully Ho has a bigger incentive to increase shareholder value.

    At $1.80, I think it's worth the risk. The licensing agreement that was extended thru 2018 pretty much guarantees the company will be at worst break-even on a yearly basis.
    Jun 28 02:49 AM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    I tend to agree insider selling is usually not the best of signs, but Hoch is the only one doing it and his plan has been in place since 2004.

    The CEO, Michael Long, has 30m+ shares too and he's not selling. Neither are any of the major holders. If Hoch wants to diversify his holdings, then he's free to do it. While I don't really support it and think it's driving potential investors away, the stock price will take care of itself if they continue to report good results.
    Jun 19 03:11 PM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    He has a defined plan. He can't just sell whenever he wants. It's done at intervals...which looks to be a few times per month and as a % of volume. The plan is designed to not have an effect on the stock price...other than amateurs reading it as a bad omen.

    E-mail him yourself and ask him about why he has the plan and why he can't cancel it. He was very open with me.
    Jun 18 04:39 PM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    The debt of $53m is irrelevant because they have more than that in current assets.

    The 125m shares outstanding is also irrelevant because that has nothing to do with the value of the company. A $15m market cap is the same whether you have 125m shares outstanding or 100 shares outstanding. The only thing that changes is the stock price.

    The person selling stock is not the CEO, he's the 2nd in command. And he's been doing it for years. Based on his salary, it's not really surprising. Insiders sell stock for a number of reasons. Selling $50k of stock a year is not a vote of no-confidence, in my opinion.
    Jun 16 10:27 PM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    What does this have to do with PYDS?
    Jun 15 06:51 PM | 1 Like Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    Reverse splits are typically not good because it usually involves bad companies that are falling out of compliance with listing requirements. That's not the case here.
    Jun 15 06:50 PM | 1 Like Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    You might want to check again. One insider sold a total of about 37,000 shares in May.
    Jun 15 11:57 AM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    Well, the premise of the the article is more forward looking than just Q1 earnings. I expect Q2 to exceed Q1 and management projects 2014 will more than double sales of 2013.

    As far as shares traded, the stock is under followed so it's not really surprising a lot of shares don't trade. I'd expect that to change if they can string together some more profitable quarters with triple digit growth.

    The up-listing to the NYSE is financial performance based (i.e they need pre-tax income of $750,000 for the year). As a result of meeting that, I'm sure they would need to do a R/S to get the share price up above a certain level (not sure what that level is for new listings). A R/S for this stock would probably be a good thing, and if it obtains a NYSE listing, then it's 100% worth it.
    Jun 15 11:55 AM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    Not really sure. It's only been the past few years they've started to gain some traction on the growth/profitability front.
    Jun 14 10:05 AM | Likes Like |Link to Comment
  • Payment Data Systems: Triple Digit Growth With Multi-Bagger Potential [View article]
    It's only one person and is the result of his 10b5-1 plan. Was addressed in the article.
    Jun 14 10:01 AM | Likes Like |Link to Comment
COMMENTS STATS
161 Comments
72 Likes