10/14/2012

Quick Thoughts on Value Ideas Worth Watching

I've have been unable to post recently, sorry. Many ideas like PBY, BODY, RAIL and others never made it and have moved a bit too much from 3 weeks ago. But I still see some ideas worth watching.

But all 3 ideas PBY, BODY, and RAIL although much higher from 3 weeks ago are still interesting. Confession I've been also having fun shorting  stocks like SPLK and others. SPLK has been so much fun as I watched strong buy upgrade after the next allowing me the opportunity to back up the proverbial truck  with my short position. Then at last week's value investor conference Zack Buckley from Buckley Capital criticized the company's business model , insider stock sales and marked the company as a great short idea. The stock has dropped from recent high of 39 to current price of 31. This was just over the past 2/3 weeks. But the real test will come starting October 15 when the IPO lockup expires. But great short ideas is not the blog's focus at least not for now.
Some potential new value based ideas. I promise to fill in the thesis on these ideas tomorrow.

DLHC: DLH Holdings Corp
Current price $1.09 MC = 10.16M

Industry = Staffing and outsourcing services
"DLH, Holdings Corp provides healthcare delivery solutions, logistics & technical services, and contingency/staff augmentation services to government agencies including the Department of Veteran Affairs, the Department of Defense, and other clients. "

This illiquid tiny nano cap with a weak financial position and uncertainty has been partially reflected in the stock price. So any improvements in financial position and future business visibility can make the stock a large winner.
The revenue is significant. TTM revenue was 47,057,000 with a current market cap of only 9.96M and EV of 9.40. Unfortunately revenues are contingent on government contracts. This revenue stream can be less certain. TTM gross profit was 5.90M is outstanding but they do have issues with excessive SGA. But that corrected.
Very risky idea. % held by insiders = 17.44% and 45% institutional.



GLPW: Global Power Equipment Group Inc
Current Price $17.32, MC = 207M dividend yield = 2.10%

"Global Power Equipment Group Inc, is a design, engineering and manufacturing firm providing a broad array of equipment and services to the global power infrastructure, energy and process industries."
Market Cap 305.56M, EV 207.35M
YOY Qtrly Revenue change = -31.50%
What makes the stock interesting?
Trading close to 52 week low at 17 off the 52 week high of 28.98. Dividend Yield of 2.10%. Shares were added to several value institution existing position for the 2nd quarter ending 06/30/12, Royce, Robeco, Gamco,Perritt.
EV/GP = 2.69, EV/MC = .70, EV/Rev = .48, EV/EBITDA = 9.34

AFFX: Affymetrix Inc

Current Price $3.42: MC = 241M


Royce and Prime Capital management were adding shares in the quarter ending 06/30/12:Royce added 40,000 shares to existing position increasing the shares held to 150,000. Prime Capital Management added  4,212,916 to increase their shares held to 7,025,440.

52 week change -29%, Market Cap = 252.79M, EV = 409.96M, Industry = Scientific & Technical Instruments, EV/GP = 2.74, EV/Rev = 1.58, YOY Qtrly revenue change = 2.70%, Short as a % of float = 17.40%


SUMR: Summer Infant, Inc

Current price = $1.55: MC = 27.99M


Click for quotes on all the stocks mentioned above

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