Sunday, September 23, 2012

Special Situation Ideas for week of 23-September-2012

These names are obviously not analyzed but i have come across them with some decent catalysts. Might be worthwhile for readers to look into --

CTGX - Potential Long – This s a small cap company. Technology and  Healthcare constitute  64% of total revenue. IBM is CTG’s largest customer (30% of Rev) and given the M&A trends in the industry, this firm might become a takeover target.  P/E: 20x, the firm has no debt, ROE is approx 14%, EPS growth has been approx. 20%

Ebix Inc - Potential Long – Midcap company which is a  leading supplier of Software solutions to the insurance industry. It was found in 1976 as Delphi Systems. ROE is 20%+, P/E 13x; Cash 26M and Debt is abt 80M. Maybe a potential takeover target.  

Corrections Corp - CWX - Potential Long – It’s a owner and operator of privatized correctional and detention facilities and prison operators in the United States. Major Catalyst might be population growth. Current downturn presents a better proposition to state prisons. Another major catalyst might be a potential REIT Conversion. CWX manages prisons more effectively (prisoner cost $67 VS federal $85 and California $140. 2011 AFFO is $235M. Stock came under pressure as CA announced to move 10K prisoners inside. It has 12K excess beds; Corvex capital and Marcato Cap filed 13D announcing 7.6% ownership recommending a shift to corp. structure. Firm pays $0.80 div, can go upto 2.25 a share if converts to REIT. Will also save $75M if converts to REIT. Firm did buybacks before. REIT with similar characters traded at 22x AFFO while CVX is at 12x.


  1. Corrections Corp symbol is CXW? Yahoo doesn,t show a dividend.

    1. yes that's the symbol. and am not sure which yahoo you are looking at...but you might wanna double check

  2. EBIX - plenty of analysis done by Bruwin on the Fundamental Value Investing thread in siliconinvestor

  3. Thanks Value. These are just ideas for people to look at. I will take a look at what Bruwin has writeen.