blainehodder Posted April 30, 2014 Share Posted April 30, 2014 Support.com provides remote tech support to businesses such as Comcast and Officemax/Office Depot. They are heavilly concentrated on those customers, and if they lose those large contracts the shares will fall. They are working on expanding with DirectTV and Dish, and management insists it is going well so far. I am not holding my breath. That being said, this looks cheap: -They trade for 128M -They have 70M+ in cash -About 11M in trailing op earnings. Trailing earnings are choppy. -substantial NOLs -> no taxes for several years -No debt -They earn high returns on tangible cap. Magicformula special. Potential Negatives: -They are going to spend the cash on something, not div/buybacks -CEO just quit. He wasn't exactly a great CEO anyhow. -They are likely to lose some money this q, with forecasted increases for the rest of the year. They report today after close. If, and that is a big if, run rate earnings are actually 10Mish why shouldn't this trade at 180-200M? It should be interesting to hear the conference call today to see how the rest of the year is looking. Lastly, there is some talk of large new contracts... but these small caps contract companies always dangle that. Thoughts? I just picked some up at 2.40. Not super compelling, but a seemingly favorable bet. Link to comment Share on other sites More sharing options...
Guest wellmont Posted April 30, 2014 Share Posted April 30, 2014 basically a cigar butt. look how the shares outstanding have gone up over the last 4 years while the share price has gone down. no operating earnings...not much to like from my perspective...but that's what makes a market. if you've been following the company and know it well, it may well in fact be a good investment now. Link to comment Share on other sites More sharing options...
blainehodder Posted April 30, 2014 Author Share Posted April 30, 2014 basically a cigar butt. look how the shares outstanding have gone up over the last 4 years while the share price has gone down. no operating earnings...not much to like from my perspective...but that's what makes a market. if you've been following the company and know it well, it may well in fact be a good investment now. Yeah, I see it as a cigar butt. Quantitatively cheap, with a decent chance of a price uptick from here. Not a great company. Not great management. Not worthy of a large position but a decent option for a small position. Dilution is a concern. Customer concentration is a concern as well. A group of these mediocre cheap cigar butts would probably perform decently. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 30, 2014 Share Posted April 30, 2014 I like how all these Dot-Com Dogs IPOed during the Tech bubble, saw their share price collapse, and went on to lose lots of money because they didn't have the best plan to begin with. Which explains why they have so many NOLs. That being said, there could be value in some of these dogs. Link to comment Share on other sites More sharing options...
yadayada Posted April 30, 2014 Share Posted April 30, 2014 im starting to like these cash type things less and less. Is there some kind of case study how often they actually do something productive with it? Seems like there are decent odds some mediocre management team will just waste them on some stupid acquisition. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now