Buyout looks unlikely since it is already trading at 3.31 times book and 4.3 times sales. You cannot expect much of a premium since revenue are down (am not sure of the quarter prior to the last one, are they down sequentially or have they stabalized ?). My take on the company is over a longer time frame. Atleast 2-3 years for big returns, provided ofcourse the products are good and the product line get expanded with new acquisition, etc. which is not too far fetched considering the cash-on-hand. In addition to Bob Burgess, another senior guy is from Alias/Wavefront. So management is seasoned which makes them more interesting as a turn around company. Otherwise, there are a lot of stories of crashed stocks.
As for their products, that is where I have no inkling.
This situation reminds me of AVID earlier in the year when it touched 9 (to-day in mid 30). Mind you their story was more compelling,( better ratios in terms of book to price and price to sale, cash flow, inventory control, etc.) with another turn-around artist at the helm)
In terms of research, analysts have 1 moderate buy and 8 hold. Pretty good odds of upgrades galore if they come up with any surprises in the future. Am not too sure of the short sale on the stock but if they have a big short position, I will look at it as a positive sign. I love short-squeeze, since I never short a stock. Don't have the temperament.
In any case, best of luck. If I acquire any, I will let you know. Not that it matters one way or the other. If I don't get any, this will probably join one of my I-looked-at-it but was-too-distracted-to-buy and look-at-where-it-is-today, I-could-have-made-a-killing stories. |
