Seeking Alpha
View as an RSS Feed

Valuable Insights  

View Valuable Insights' Comments BY TICKER:
Latest  |  Highest rated
  • Big 2Q Result From Radcom - Stock Has Significant Upside [View instapost]
    They have higher revenue, lower operating expenses, lower interest expense than expected for 2Q. Simply moving forward from there, with REDUCED assumptions for further improvement gets us to those numbers. Realistically, 2014 could be $30 million+ in revenues. They said breakeven is $5 million per quarter. Fall through is about 70%. So at $20 million, they are breakeven. At $30 million, pre-tax should be ~$7 million. There should be no taxes given losses, but assuming 20%, at $5.4 million of net income, EPS is about $0.77, not the $0.55 we have. Based on that, shares could be ~$15-$20.
    Jul 25, 2013. 07:31 AM | Likes Like |Link to Comment
  • Angie's List Underwater And Deteriorating Further [View article]
    J - you're doing some terrific, thoughtful analysis here. Not short ANGI, but probably should be and will be. As a long-time Wall Street vet, see a lot of good things in your future. A rare follow from me.
    Jul 25, 2013. 07:19 AM | 2 Likes Like |Link to Comment
  • Despite Doubling, Zhone Offers Upside To $8-10 In 12-18 Months [View article]
    We really like this call and have done work on the name (and are long). If they continue to grow top-line, massive leverage since they're pretty clear that they don't require incremental op-ex (a lot like Radcom, which we recently recommended).
    Also, the massive NOLs represent significant embedded value/margin of safety.
    Nice work.
    Jul 24, 2013. 09:17 AM | 2 Likes Like |Link to Comment
  • A $180 Million Company Worth Less Than $0: Short Xumanii [View article]
    Ashraf, great work. Wish it was easier to short such putrid junk.
    Jul 23, 2013. 09:02 PM | 2 Likes Like |Link to Comment
  • FQ3 iPad units would've been down only 3% Y/Y rather than 14% if not for channel inventory shifts, CFO Peter Oppenheimer states on Apple's (AAPL) CC. But that figure still implies share loss, given industry growth. iPad and iPhone channel inventories fell by 700K and 600K Q/Q. iPhone sales rose 51% Y/Y in the U.S., 66% in Japan, and 400%+ (off a low base) in India, even as they fell elsewhere. $106B of Apple's cash is offshore. $4B spent to repurchase 9M shares in FQ3, but more shares retired (hence the $16B repurchase figure). Share count lowered by 22M Q/Q. Greater China iPhone sell-through -4% Y/Y; Mainland China +5%, Hong Kong -20%. DRAM pricing is pressuring margins; NAND flash prices are stable, and LCD prices have fallen. App Store revenue was $2.4B. Shares +3.5% AH. (more on Apple) (live blogs: I, II[View news story]
    DRAM and NAND pricing are likely to remain margin headwind for $AAPL - http://bit.ly/130Q9el - long $MU
    Jul 23, 2013. 06:23 PM | Likes Like |Link to Comment
  • Amkor Technology: Dirt Cheap With Significant Growth Drivers And Strong Competitive Positioning [View article]
    Ashraf, while Amkor is cheap, we fail to see the catalyst. We also are unclear what you have identified that the four analysts with Buy ratings fail to point out.

    We are not long Amkor because we don't see a catalyst (cheapness is not a catalyst in our opinion) and for several company specific reasons.
    1. Management turnover. Ken Joyce retired as CEO in May (a planned retirement), and had been CFO for many years before ascending to CEO. He was entirely unimpressive (and that is being generous) and we are uncertain in what type of shape he left the company. New CEO Steve Kelley does not have experience running a semi packaging co (nor did he ever work at one, as far as we know). Amkor has operations in Korea, China, Philippines, Japan, and Taiwan (small), we think there are a lot of moving pieces to manage. The company also just replaced its head of sales.
    2. Gross margins declining since 2010 (see GM slide on p15 of investor deck).
    3. EBITDA is big, FCF is basically non-existant or negative (p16). Cap-ex as percent of revs exceeds peers (probably due to geographic diversity).
    4. Debt is significant and adds risk (or perceived risk) if semi cycle craters (although maturities are basically years away $105mil in 2015).
    5. We are extremely skeptical about the possibility that AMKR would get Apple business. AMKR does NOT do Intel Microprocessors. If they ever did, it was not in the last 15 years. Apple ain't going to happen. Ashraf, you get some good scoops, this isn't one of them. Plus, I'd bet SPIL or ASE would be first in line anyway.
    We think AMKR goes up if semis go up, down if semis go down...don't see the alpha.

    In semi packaging, we'd point investors to IMOS which trades at a discount to AMKR (currently about 2.5x EV/EBITDA). At the 4x EBITDA you suggest as crazy cheap (for IMOS we estimate EBITDA of $220 million this year, and 29 million shares out), IMOS is a $30 stock, up 70%+ from here. And in IMOS' case there are several company specific catalysts that should come to fruition over the next 90 days. Not to mention, that IMOS will generate in the neighborhood of $90 million of FCF this year - third year in a row in this range.
    Jul 23, 2013. 06:19 PM | 2 Likes Like |Link to Comment
  • Radcom On Cusp Of Inflection, Shares Offer Multi-Bagger Potential [View article]
    Look at gross margins. Exceptionally high. And take a look at op-ex...they don't need to grow to support significantly higher revenues.

    Company posted SPECTACULAR results this AM. Business appears to be progressing even faster than we anticipated. Stock will likely move up dramatically today.

    2Q results - http://bit.ly/1bZfJoV - Huge!
    Jul 23, 2013. 07:25 AM | Likes Like |Link to Comment
  • RADCOM Returns To Profitability; Continued Momentum In Q2; $5.4M Revenues, $0.06 Non-GAAP EPS [View article]
    Absolutely spectacular result. We see stock hitting double digits in short order. We don't always get it right, but nailed this one http://bit.ly/1aAANAq
    Jul 23, 2013. 07:12 AM | Likes Like |Link to Comment
  • Radcom On Cusp Of Inflection, Shares Offer Multi-Bagger Potential [View article]
    No victory lap until $RDCM delivers the goods. On the lookout for more actionable ideas offering asymmetric risk/reward.
    Jul 22, 2013. 06:49 PM | Likes Like |Link to Comment
  • Radcom On Cusp Of Inflection, Shares Offer Multi-Bagger Potential [View article]
    Author's note: For anyone interested in the background of Zohar Zisapel, please click http://bit.ly/15SqqqN - he is truly viewed as one of the top technologists of the last several decades in Israel (we welcome reader feedback regarding sub-$35 million mkt. cap companies with a Chairman of his stature). We discussed Radcom with several colleagues today and their feedback was that in terms of management credibility, we understated how impressive they are for a company of this size.

    Again, this is a real company, with a diverse group of well capitalized customers, with significant tailwinds to the business. If they get it right, potentially a multi-hundred million market cap stock in a few years. If they don't, probably not a lot of downside. We'll take this type of risk/reward every day of the week.
    Jul 19, 2013. 06:16 PM | 1 Like Like |Link to Comment
  • Harvard Bioscience Spin-Off Likely To Drive 50% Near-Term And 100%+ Long-Term Upside [View article]
    We actually think we kept wishful thinking to a minimum. We know that we have a "lousy", but self-serving management, leaving for spin-co, which we assign $45 million of value to...although self-serving guys are going there presumably because they believe it's a home-run. Our valuation of spin-co is not predicated on wishful thinking, but on a draconian scenario.
    Similarly, for the legacy business, we think that given the use of catalog sales, the existing sales force, and distributors, the business could continue to be mediocre. That being said, they are in an industry where there is real consolidation, and healthy multiple are paid. We think it's entirely realistic to believe that HBIO's competitors believe they could make much more of HBIO than the previous management has...and as such, a meaningful premium is likely.

    If new management/Board does does pursue an investor friendly strategy, we think we've already laid out substantial arguments for a potential activist investor - who by the way, would have an excellent case given the company's historic failures. This is not wishful thinking, this is fact.
    Jul 19, 2013. 02:15 PM | 1 Like Like |Link to Comment
  • Harvard Bioscience Spin-Off Likely To Drive 50% Near-Term And 100%+ Long-Term Upside [View article]
    Money losing business goes away AND you receive shares in HART (which you can hold, sell, etc.)
    Jul 19, 2013. 11:59 AM | Likes Like |Link to Comment
  • Radcom On Cusp Of Inflection, Shares Offer Multi-Bagger Potential [View article]
    Unfortunately is not that liquid given 7 million shares outstanding and significant insider ownership. However, given our view that shares are trading at 1/3 potential fair value, we like the investment case. As we mention in the article, SILC (on whose Board RDCM's Chairman sits) has a similar float and trading volume. Over several years, SILC has moved from mid-single digits to the $41+ where it is today, despite trading only 10s of thousands of shares daily for the entire period. Hard to buy in size, but one to buy and hold, in our view.
    Also, to this point, we believe if/when insiders sell (certainly at $10+), we believe shares may actually trade up as institutions finally have the opportunity to buy a relatively large block without pushing shares higher.
    Jul 19, 2013. 11:41 AM | 1 Like Like |Link to Comment
  • Harvard Bioscience Spin-Off Likely To Drive 50% Near-Term And 100%+ Long-Term Upside [View article]
    Steven, good questions. Fact is that companies in this space receive hefty multiples for modest growth. We believe the perception is (and this seems fair) is that business is consistent, with an exceptionally broad customer base. Kind of like how consumer staples grow at, or slightly above, GDP, but receive high teens multiples. Would we prefer that they could get this done without acquisitions - sure, but we don't think our multiples are off-base. We also think that with 74 year-old Chane Graziano running the show (and President David Green seemingly focused on HART) the company has been under-managed for some time.

    As we write in the article, at 6x revenue the company is ridiculously overpriced, but at 1.3x revenue, it's a steal.

    For a sanity check, you might want to check out the write up from Tappan Street Partners http://bit.ly/12XwRUZ provided by Colin King in a previous comment. If anything, our multiples appear more conservative than the ones that they suggest.
    Jul 19, 2013. 11:01 AM | Likes Like |Link to Comment
  • Harvard Bioscience Spin-Off Likely To Drive 50% Near-Term And 100%+ Long-Term Upside [View article]
    Todd, it's hard to understand your view. With Interim CEO/President David Green and CFO Tom McNaughton departing for HART, we're not sure which management remains to "milk the company's profits." Green and McNaughton remain sizable HBIO shareholders, and while we're not fans of them as managers, we certainly like being aligned with them (they are HBIO shareholders as are we) given their history of acting in their self-interest. If you have information that we're not aware of, we'd be interested to know. We think we were extremely clear that management has not been shareholder friendly - but since they are now (or soon will be) shareholders aligned with us, and not management, we feel very comfortable.
    Jul 19, 2013. 10:28 AM | 1 Like Like |Link to Comment
COMMENTS STATS
485 Comments
713 Likes