3/02/2014

Small Cap Out of Favor

Click to view all stocks: BIRT,SPRT,ARO,GTS,CRMT


Support.com, Inc. (SPRT), Price = $2.51


SPRT sells support automation software to the consumer and enterprise. Their solutions keep your technology working.

“In its Consumer segment, it provides premium technology support to consumers over the internet and the phone for a fee. It offers incident-based and subscription-based services to consumers through retailers, anti-virus providers and other companies who provide technology products and services to consumers. The company's Enterprise customers use its software to resolve technical problems for their customers and employees.” Source Gurufocus


SPRT's with their talented management team is selling below intrinsic, historical and relative valuation. This outstanding fast growing company, solid financial position, and strong 2013 insider buying has been way oversold.The year over year revenue growth was 2010(+151.51%), 2011(+21.87%), 2012 (+33.65%), 2013(+28.50%).

The stock price return does not reconcile with these growth rates, management talent and current valuation. Total price return to 03/03/14 was 3 month= -30.29%, YTD -31.40%, 1 Year -34.51%, and 3 year -23.55%


03/05/14: "Support.com's Price Is Far Too Low:" by Saj Karsan on SeekingAlpha 






































Actuate Corporation (BIRT), Price = $5.68


BIRT (Actuate Corporation): “Offers a suite of business intelligence and reporting tools (BIRT)-based BI, analytics, visual data mining, and reporting features within the integrated ActuateOne suite, providing in-memory analytics, user configurable dashboards, ad-hoc query, interactive mobile and Web content, brochure reporting, and spreadsheet analysis.” Yahoo

"Personalized analytics and insights for over 200 million people" Corporate Website   

Statistically cheapest BI data visualization software vendor. It’s profitable, historically and relatively inexpensive. Actuate named a leader for the first time in report on business intelligence by Forrester Wave.

Actuate stock price near 1 year low, P/B near 5 year low of 1.93, P/S is close to 2 year low, coupled with gross and operating margin expansion.

The stock has attracted value funds such as Heartland and Royce to purchase share quarter end of FY 2013.




































AEROPOSTALE INC:(ARO) Price = $7.34 

ARO is a specialty retailer targeting teenagers, 984 stores in 50 states, Puerto Rico and 78 stores in Canada.

Why investigate further: Oversold stock price down 43.20% over the past 52 weeks, short interest grew over the last year to reach 36% of the float. For now the financial position is strong with no long term debt. But ARO has reported four quarters of losses below analysts’ estimates. ARO stock price is now at 2003 levels. Cash fell to 68 million (10/31/2013) from 100.30million (07/31/2013). Yet an unused 175 million credit is available. 


The low stock price and valuation has attracted activist investors. Hedge fund Hirzel Capital Management raised in its ARO investment to 6.02% after January 2014 13G filing. “Hirzel stated that Aeropostale’s stock looked undervalued and it bought this stake for investment purpose.”  The firm plans to speak with management’s growth strategies.


Crescendo Partners an activist investment firm sent a letter to the board of directors urging Aeropostale to go sell the entire company. Crescendo believes potential buyers will be interested in acquiring A√©ropostale because of its strong brand name and low valuation. “Crescendo Partners urged Aeropostale to go private. It stated that even though the retailer is trying hard to get back on track, it will see a better impact as a private company”
Private equity firm Sycamore Partners run by retail expert Stefan Kaluzny, “separately took an 8 percent stake in Aeropostale in September 2013, becoming its third-largest shareholder”. Sycamore has not commented. Yet it’s possible the firm may try to buy the entire company or pressure Aeropostale to consider alternatives.
Finally, the falling stock price and outside pressure has forced ARO to seek guidance from investment bank Barclays to study it options.



























Below is self service company analysis for the Apparel Store's Industry (ability to sort fields)





Ideas will be further updated tomorrow


Triple-S Management Corporation (GTS), Price = $16.75

Triple-S Management Corporation,offers  managed care and related products in the commercial and Medicare markets in Puerto Rico. The company operates in three segments: Managed Care, Life Insurance, and Property and Casualty Insurance.





































America's Car-Mart Inc. (CRMT), Price = $36.24


Sells older model used vehicles and provides financing for its customers. 127 automotive dealerships in ten states, South-Central United States. Arkansas based company founded 1981.


CRMT: Trades at a deep discount to intrinsic value using historical conservative cash earnings. Historical and relative valuations are also deeply discounted deeply. The 52 week price drop of 25% has attracted value investing institutions. 

SA Article posted Tuesday 03/04/14 

America's Car-Mart: 45% Upside Over 12-24 Months

 



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