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  • Cheap Winner 0 comments
    Sep 22, 2010 10:26 AM | about stocks: XRTX
    You may never have heard of this stock, but I recommend that you get familiar with it in a hurry. It is a small cap with a market capitalization less than $500 million, but it has excellent growth prospects. It has a P/E of about 5, no debt, a stellar ROE of 32.4%, a cheap Price/Sales ratio of 0.37, positive cash flow, and a strong growth rate. I also believe it could be an attractive takeover target. Should I continue?

    The stock in question is called Xyratex (XRTX). The company is a data storage solutions provider that operates in two segments: Network Storage Solutions and Storage Infrastructure. According to analysts, the company is expanding its relationships with IBM. When I read this I immediately thought that IBM could be a natural suitor for the company given its existing relationships. Hewlett Packard recently won a huge bidding war for 3Par (NYSE:PAR) which is in the same industry. The acquisition of one small player often leads to consolidation in the industry in order for the bigger players to keep up.

    Room to Run

    Continue reading:

    Stocks: XRTX
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