buy

CSI TIP: BUY ATEC @ $1.56

Alphatec Holdings Inc. (NASDAQ–ATEC)

Valuation-$3.00

Price August 29, 2014-$1.56

ATEC has had some troubles lately. We personally bought ATEC earlier this year, but then sold it when it lost a $50 million lawsuit they inherited from an acquisition in March. We now own ATEC again based on recent performance.

Latest earnings were for the second quarter ended 6/30/2014. ATEC posted record sales and adjusted EBITDA. Revenues were up 4% to $53.2 million from $51 million and they lost $2.9 million versus a $4.7 million loss last year. They are projecting around $210 million of sales for 2014 and adjusted EBITDA of $30-$33 million. Our valuation based on the latest quarter is $3.00 a share.

Back in March when they lost the lawsuit they entered into a loan facility with Deerfield entities  (which own about 4% of ATEC) to be able to fund the lawsuit settlement. They currently have about $21 million in cash and $100 million in debt. They still have $31.5 million to pay on the settlement but are only required to pay this in $1.1 million quarterly installments.

Healthpoint Capital is a longtime holder of about 20% of ATEC.

Trading at only 52% of our valuation we think this is a BUY.

There are about 97 million shares outstanding and it trades about 180,000 shares a day.

About ATEC:  Continue reading →

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CSI Tip: BUY DAEG

DAEG announced Q4 2014 earnings (quarter ended April 30, 2014) on June 17th. Revenues were $7.2 million down from $9.8 million last year. They actually made a profit of $.01 per share on a GAAP basis. On a Non-GAAP basis they made $.07 a share versus $.03 last year. Our valuation rose to $3.39 up from $3.25 last quarter. Gross margin inched over 70% and net debt came down to $7.2 million from $12.2 million a year ago. Looks like they may finally be turning the corner.

From their press release: “We are excited about our product offerings and opportunities and remain confident that we’ll demonstrate growth in the second half of calendar 2014.”

BUY

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CSI Update: BUY CaféPress Inc. (NASDAQ–PRSS)

Valuation-$11.27

Price May 19, 2014, 2014-$5.40

PRSS is a little different than our usual picks. Although it is an online business, it basically sells T-Shirts and things. Nevertheless, we have been watching it for a while and think this is a good entry point. I own PRSS.

Latest earnings were for the quarter ended 3/31/2014. Nothing to write home about. Revenues were down from $52.5 million to $48.2 million and they lost $5.2 million versus a $4 million loss last year. Like most “retailers” their business is somewhat seasonal. They are projecting around $250 million of sales for 2014 and breakeven to a loss of $.12 a share on a Non-GAAP basis. Our valuation based on the latest quarter is $11.27 a share. If they hit their guidance, it is over $16 a share.

Back in February, PRSS announced that they had hired Raymond James & Associates to help them pursue “strategic alternatives”. We think PRSS could be sold for a premium to the current stock price, if a buyer can be found.

Trading at only 48% of our valuation we think this is a BUY..

There are about 17 million shares outstanding and it trades about 45,000 shares a day.

About PRSS: Continue reading →

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CSI Update: United Online May 1st 2014

UNTD announced Q1 2014 earnings after the close on April 30th. Revenues were $55.4 million down 3% from $57.2 million last year. GAAP net loss was $.75 a share, compared to income of $.03 per share last year. OIBDA (operating income before depreciation and amortization-the term United uses, which is essentially EBITDA) was $3.2 million compared to $5.2 million last year. Overall an OK quarter. Our valuation rose to $32.35 from $27.86 last quarter. UNTD is trading at about 40% of our valuation and cash is 40% of the market cap ($4.79 a share versus $4.29 a share last quarter. Although it looks like the stock will fall this morning (it was up $.78 yesterday), we think this is a buying opportunity.

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