Buy CKP @ $7.79

Checkpoint Systems. (NYSE–CKP)

Valuation-$18.28

Price September 16, 2015-$7.79

Latest earnings were for the second quarter ended 6/28/2015. Revenues were $148 million down from $171 million last year and they posted a Non- GAAP income of $.10 a share versus $.25 million last year.

For 2015 they are projecting revenues of $575-$625 million, adjusted EBITDA of $55 to $68 million and adjusted EPS of $.40 to $.50 a share.

CKP had $34 million of net cash or $.78 a share. Trading at only 43% of our valuation, with 40%+ gross margins and stable, recurring revenue stream, we think this is a BUY.

There are no activist investors that we see hanging around CKP but we would not be surprised to see someone surface as the valuation here just seems too compelling.

There are about 43 million shares outstanding and it trades about 188,000 shares a day.

About CKP: Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility. Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory visibility, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience. Checkpoint’s solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss prevention solutions, market-leading RFID hardware, software, and comprehensive labeling capabilities, to brand, secure and track merchandise from source to shelf. Checkpoint’s customers benefit from increased sales and profits by implementing merchandise availability solutions, to ensure the right merchandise is available at the right place and time when consumers are ready to buy.

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