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  • RadiSys Is Reaching A Meaningful Inflection Point [View article]
    Re insider activity, take a look at There hasn't been any insider selling to speak of in the last six months. The single insider sale was by a marketing VP who sold 5k of his 32k back in early September and has since built back up to 35k. Everything else represents shares surrendered for tax withholding following exercise of options/RSUs.
    Feb 4, 2015. 06:48 AM | Likes Like |Link to Comment
  • Are Semiconductor Stocks Overpriced? [View article]
    IMOS doesn't really belong on this list. It is essentially a closed end fund while the others are operating companies. The value of IMOS shares is based on its cash and its 60% ownership of, which came public in April. Your target of $22.91 is actually a good estimate of what the price should be today. On multiple days in August, September, and October, closed at or near $38.60NT$, as it did last night, and on every one of those days IMOS closed between $22 and $24. The NAV is currently $24.50. A price of $22.91 would simply return IMOS to the NAV discount that was typical over the last three months. Now that is publicly traded, IMOS management has stated it will take action to effectively open end the shares to eliminate the discount by no later than mid-2015. In the confusion of this selloff, the discount has ballooned to nearly 20%, the highest since has been public. The risk/reward looks compelling to me and, full disclosure, I am long.
    Oct 14, 2014. 10:44 AM | 1 Like Like |Link to Comment
  • Update: Cynosure's PicoSure System Bags FDA Approval [View article]
    I like the idea of owning a tattoo regret company. It seems sure the world will beat a path to its door one of these years. But what do you make of insider activity? The COB/CEO and COO/CFO have sold $6M of stock between the two of them since the Palomar acquisition and have direct ownership of 0 shares, per the proxy. At the same time, CYNO's Italian supplier El. En. has cut its ownership from 3M shares (23% ownership pre-Palomar) to 1M shares (4% ownership post-Palomar). It makes me wonder if they bought a pig in a poke.
    Aug 28, 2014. 05:54 PM | Likes Like |Link to Comment
  • ChipMOS: Undervalued By At Least 40% Relative To Industry Peers [View article]
    It's a little bothersome that 8150 continues to ignore good news, because IMOS is simply a closed end fund with 16.75 shares of 8150 and $3.34 of cash backing each share. For IMOS to be worth $34, 8150 would have to trade to $55 (constant currency). That could - maybe should - happen but at current prices IMOS will underperform 8150 because the closed end discount is gone and the 14% of NAV represented by cash becomes a drag. It is worth keeping in mind that there is still no clarity as to how or when open ending will happen. The recent agreement to purchase SPIL's shares at a 7% discount to market is good for existing holders but raises a question of the likelihood of a dutch auction buyback at a significant premium. If one considers 'what could go wrong', a mild version would be a normal market pullback during which the current weak relative strength in 8150 persists while the discount to NAV widens to late July levels of 10%. In that plausible scenario, IMOS would break $20. To own IMOS here is to be prepared to ride that out.
    Aug 15, 2014. 11:36 AM | 2 Likes Like |Link to Comment
  • Staples: The First Casualty Of The Wal-Mart/Amazon War [View article]
    Focus on the numbers. CEO Ron Sargent has said gross margin dollars are his key metric. TTM gross margin $ are in steady decline, $5.87B in Q1 2014 vs $6.34B in Q1 2013, though the rate of decline may be slowing. SGA is declining, too, but much more slowly. For years, SPLS generated annual free cash of well over $1B. Last year it dropped below $900M and company guidance for this year is $600M. Until gross margin $ stabilize, the stock is vulnerable though the dividend offers support, of course. Price matching all competing offers then rebating another 5% while throwing in free shipping is great for us customers but it's a difficult business model.
    Jul 22, 2014. 01:26 PM | Likes Like |Link to Comment
  • Investors Recognize ChipMOS Arbitrage Play [View article]
    Jaret, thank you for continuing to share your work on this. Do you have any insight to the tax treatment of an ADR conversion in light of the Bermuda address?
    Jun 11, 2014. 07:58 AM | 2 Likes Like |Link to Comment
  • Anadigics Is Significantly Undervalued As Product Design Wins Pile Up [View article]
    The review of the design wins is helpful but the last couple of paragraphs are misleading. Simply having minimum debt covenants doesn't mean they will be attained. The original credit agreement of April 2013 contained minimum covenants, too, and none were realized. Minimum TTM EBITDA as of 3/31/14 was set at ($19M) but came in at ($27M). Similarly, quarterly EBITDA from June 2014 forward was required to be b/e or better but now June has been re-set to ($7M) and b/e pushed back to Q4. This is moot to the bank until the company draws on the credit line. The company continues to burn cash and remains in minor violation of the newly loosened covenants as of 3/31. The stock is an interesting spec but it would be a mistake to read too much into the revised credit terms.
    Jun 4, 2014. 12:39 PM | Likes Like |Link to Comment