PRO articles cover stocks that fly under most investors' radar screens.
NV5 Holdings' Management: Been There, Done That, And Doing It Again
- NV5 Holdings fits our criteria for a GeoBargain; it's cheap and it's led by a management team with significant pedigree and a proven track record.
- Dickerson Wright, the company's founder, has a history of entrepreneurial success that we believe will continue with the growth of NVEE.
- Management is targeting $300 million revenue and 12% to 15% EBITDA by 2016, a feat that we think it can achieve and is supported by industry dynamics.
- We believe that recent cash from a warrant redemption will be put to good use as management continues to pursue accretive acquisitions.
- Our price target of around $21.00 does not take into account future acquisitions that we think NVEE will complete that should be accretive to earnings.
Superior Uniform Group: An Old Dog That Has Learned New Tricks
- Since 2003, Superior Uniform Group has made a focused and activity-based effort to evolve and position its business to achieve optimal performance.
- SGC has acquired one of its closest competitors in an accretive acquisition of HPI in 2013, where it can share in positive industry dynamics for the segments it focuses on.
- Successfully leveraging fixed costs and ongoing cost efficiencies have enabled the company to double its bottom line in recent quarters.
- We believe SGC is undervalued compared to its industry peers.
- We believe SGC deserves a forward premium PE of 20, which implies a target price of $50.00 on a pre-split basis.
ALJ Regional Holdings: Building A Solid Holding Company, One Acquisition At A Time
- In short, we believe ALJ could be the beginning of a "baby Berkshire"; a holding company with a sharp eye for value and shareholder-friendly management.
- ALJ bought, revamped, and turned around a Kentucky Electric Steel Mill for a $76 million profit. They sold it last year.
- After paying off liabilities, ALJ returned a large portion of this profit to shareholders in the form of a 30 million "dutch auction" share buyback.
- We believe ALJ will optimize and increase profitability at the two new companies they recently acquired.
- We think ALJ could generate $175M in revenues and $25M in EBITDA and $0.50 fully diluted EPS in the next 12 months; we peg the company to be worth $7.50.
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