Seeking Alpha
View as an RSS Feed

Valuable Insights  

View Valuable Insights' Comments BY TICKER:
Latest comments  |  Highest rated
  • International Commercial Television: Flagship Product International Expansion Should Drive Substantial Upside [View article]
    Tom - can you provide background on how they managed to drive growth from $3 million in 2011, to $20 million in 2012, to ~$40 million in '13? All organic? Any acquisitions? Management appears to know how to grow a business.
    Feb 5, 2014. 04:51 PM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Our understanding is that if you buy today, you will be eligible to participate in the rights offering - which has yet to become effective.
    Jan 30, 2014. 11:12 AM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    The offering has not yet become effective. You can buy stock today and participate in the right offering.
    Jan 30, 2014. 11:11 AM | Likes Like |Link to Comment
  • Apple: Is The iPhone 6 NFC Rumor True? [View article]
    Anyone interested in learning more about NFC should try to get their hands on the recently published HUGE Morgan Stanley Payments report.

    Also, worth taking a look at both OTIV and INVE that have significant participation/momentum without Apple - if Apple gets involved, things really get interesting.
    Jan 28, 2014. 11:44 AM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Prior to making our investment in Pro-Dex we conducted due diligence on AO and Farnam. Of course anything can happen - great investors have awful years, poor investors have good years - but we believe they are smart investors and thoughtful capital allocators. While we would prefer that this doesn't become an AO/Farnam investment vehicle, we went into this with eyes wide open, COMFORTABLE, that should this become an investment fund for them, we believe they are solid investment managers. We also reiterate, that while we believe the rights offering is self-serving, we believe investors are aligned with insiders as we think it is clearly in their best interest to see shares appreciate.
    Jan 27, 2014. 12:36 PM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Hokie, absolutely possible that they want to use PDEX as a hedge fund of sorts, with permanent capital. Greenlight (Einhorn) and Third Point (Loeb) both have reinsurance companies, not to mention Buffett/Berkshire, which is the ultimate in permanent capital.

    This is a potential outcome, and one which is not necessarily bad for shareholders. Still, it is also an outcome which does not put AO/Farnam in a very good light. It would be pretty unsavory to see supposedly shareholder friendly activists to use their Board positions and holdings to create their own investment vehicle - although to our understanding, not illegal. It is worth noting, that long-term Berkshire holders have done ok (not to suggest AO/Farnam are like Buffett).
    Jan 27, 2014. 11:52 AM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Given the fairly limited liquidity and tiny market cap, very probably that shares would crater when they file that they sold a portion of their holdings. Certainly an interesting idea, but simply not practical.
    Jan 27, 2014. 11:41 AM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    We spend dozens and dozens of hours researching a stock and then writing an article. We think it's fair to hope that people making comments spend a few minutes researching their thoughts before posting. In this case, you could find very quickly in PDEX's 10-K that they have minimal NOLs. Your idea is an interesting one, but is not so in this case.
    Jan 27, 2014. 11:39 AM | 3 Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Look at price drop/volume spike in the days post rights offering announcement. Clearly retail base was spooked and sold.
    Jan 27, 2014. 11:27 AM | 1 Like Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Yes, we were trying to give the company the benefit of the doubt re: listing costs, but definitely "smells like an easy way for management to increase ownership cheaply."

    Will be interesting to see if management issues a press release in the not too distant future explaining their plans. One would think a Board, particularly one comprised of activists, would be a bit more responsive.
    Jan 27, 2014. 11:24 AM | 2 Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Cynical remark duly noted. To be clear, our purpose in publishing this piece was:

    1) To shorten the time it will take for shares to move from market value to intrinsic value - and to increase investor awareness about the company.
    2) To make fellow long-term oriented investors aware of the PDEX story with the hope they will exercise their rights, and limit the number of shares that accrue to AO and Farnam.
    3) To put in the public domain a document that will hopefully lessen the probability of AO/Farnam pursuing a self-serving course for PDEX (we believe even a self-serving course would be value-enhancing, although possibly not value-maximizing) for all shareholders.
    4) To describe a very unusual set of events that is interesting just from the perspective of one wanting to learn more about the markets.

    We disclose that we have a sizable position in PDEX and have no intention of selling at current prices.
    Jan 23, 2014. 11:49 AM | Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Ultima, we will respond to you once, and once only. Hopefully you will cease and desist from any additional comments. We believe this is more than generous given the 11 negative, often rude, comments you made following our recommendation of CRDS. While the fact that shares of CRDS are up almost 40% from the time of our recommendation proves nothing, that we have increased our position in CRDS speaks to our conviction and intellectual honesty in our recommendation.

    One of the clever aspects of the rights offering is that it affords EVERY investor the right to participate in the offering. No one can complain that they weren't given the opportunity to participate in the discounted shares. That said, we can easily envision a significant portion of investors never even opening their mail notifying them that the rights offering exists. And of those who receive/open the mail, there are surely many that will toss it as junk mail/not comprehend the offering/think it's a come-on, etc. We are very confident that a significant proportion of PDEX shareholders are unsophisticated investors. The action of the Board is not very nice, but it is entirely legal.

    In contrast to a rights offering, a discounted private placement would seem to be highly questionable, and could open the Board to litigation. A rights offering provides every shareholder the right to participate, irrespective of the fact that many won't. A discounted private placement to select insiders appears highly questionable, and possibly illegal. If you can provide examples of discounted private placements to insiders in which there was no immediate need for cash, and the insiders were activist investors (who identify themselves as shareholder friendly activists as part of their ongoing strategy) please send them our way. We'd love to be more educated. We think your suggested "simple private placement" is hardly so simple.

    Finally, your comment that you wouldn't want to own shares "with a dilutive offering close at hand" is simply ignorant. By all means, don't own shares. But anyone who purchases shares right now will have the opportunity to participate in the rights offering and buy their pro-rata portion of discounted shares, thereby maintaining their ownership percentage. If you can walk us through the dilution, we'd be much obliged, but we think that would be difficult.
    Jan 22, 2014. 08:34 PM | 10 Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Weighing Machine - thanks for your comment. While we acknowledge that problems are possible (we mention the potential failure of new programs to ramp in risk factors), we believe that conclusion is highly improbable.

    First, the company is sitting with ample cash to weather a fairly significant storm (ample cash for an authorized 750,000 share repurchase program). If it is not just "problems," but a significant deterioration in business prospects the Board could be guilty of securities fraud by raising funds without disclosing a material change in the company's outlook. We hardly think this is likely.

    Second, if there were "problems" we'd expect the AO and Farnam to do everything in their power to avoid committing more capital. Perhaps they'd try to execute a PIPE where they put in no more funds. At a minimum, they'd give investors the opportunity to oversubscribe to the offering, and personally buy as little as possible. (Buying all unsubscribed shares, hardly likely). On November 19th Nick Swenson sold his significant holdings in ELSE back to management - he hardly appears reluctant to cut bait. (Notably, Farnam was also involved with ELSE and they too dumped their position).

    We strongly believe the fact pattern supports our view.
    Jan 22, 2014. 06:13 PM | 3 Likes Like |Link to Comment
  • Intel's Time Is Running Out [View article]
    Ashraf, nice work. Only issue is that if Intel fails, very good chance that you will be selling a stock that has fallen dramatically from current levels - it may prove to be a sell call that's too late.
    Getting an early read on Broxon is going to be key. If mobile doesn't happen, and server feels pressure (I know you're skeptical of this), very cheap looking Intel shares will have proven a massive value trap. Disclosure: no current position.
    Jan 17, 2014. 01:43 PM | 6 Likes Like |Link to Comment
  • ExOne issues Q4 warning, peers fall in sympathy [View news story]
    How about PRLB which isn't a 3D printing company, but trades at an absurd multiple, and in-line with the group?
    Jan 14, 2014. 04:26 PM | 3 Likes Like |Link to Comment
COMMENTS STATS
485 Comments
713 Likes