CSG Systems International (CSGS): The Company enjoys a 2.8% dividend yield, with cash on the balance sheet of 190m and debt of 270m. The company is a Provider of customer care and billing solutions to firms such as AT&T, Comcast and DISH among others. Maybe a potential takeover target in the medium future. Worth a look.
Consolidated Water Co.(CWCO): Leading developer of 14 desalination plants in
Caribbean and coastal regions. With the current general
theme of water scarcity and the need for drinking water, globally, this might
be a good play on water infrastructure, especially given the geographical
location of CWCO’s plants. The firm has negligible debt on the balance sheet,
has cahs with good operation and profit margin.
SandRidge Energy(SD): TPG-Axon launched a proxy fight with SD. It won several seats on the board, and ousted the CEO in June. TPG is SD’s second-largest holder.
Capital that specializes in
energy, also owns more than 5% and having more bullish view of natural-gas
thinks SD could be worth $15 a share, while Leon Cooperman thinks its about $11
or so. He bought the shares in the $5-to-$6 range. Why is SD so attractive? It
is because the New management is upgrading the company's drilling prospects,
drilling more productively, and reducing operating costs. There is a large
short position in the stock, but Wall Street's view is likely to grow more
positive. A buyer eventually could emerge. Mount Kellett
Walgreen (WAG): Walgreen, which has been operating Walgreens drugstores in the
1901, is applying its alchemist's skills to its business model, transforming
itself into a global drugstore chain with a massive distribution network that
will position it for strong growth in its second century. With a 19% market
share, Walgreen (WAG) is the second-largest U.S. drug retailer, behind CVS
Caremark (CVS), which has 21%. WAG aims to lift sales, enhance its
drug-purchasing clout, slash costs, and boost earnings and margins through
partnerships with Alliance Boots, the closely held drug chain based in U.S. Switzerland, and AmerisourceBergen (ABC), a
giant drug wholesaler based in A greatly
increased distribution system should help WAG cut costs, boost margins, and
maintain competitive pricing, should also benefit from macroeconomic
developments, such as the adoption of the Affordable Care Act; prescription
volume should rise further as the baby boomers age: The number of Americans
aged 65 or older is growing three times as fast as the overall population.
Investors have warmed upto to Alliance Boots transaction. By FY16, WAG
projects, the Valley
linkup will generate USD 130bn in combined revenue creating world's largest
pharmacy, handling 10% of global volume. Shares at 14x earnings multiple at $5
gives as $70 and $5.50 or $5.75 a share in FY16, in which case its stock could
hit $77 to $80. Another huge plus is the presence of Stefano Pessina, Exe Chair
of Alliance Boots known for integrating companies. He now owns 8% of WAG and
might own 20% if WAG buys rest of Alliance Boots. The 10-year distribution pact
with drug wholesaler AmerisourceBergen to supply branded and generic products,
launched last month, should also enhance pricing and margins, as it gives the company
three times the buying power. Under the pact, Walgreen and Alliance Boots can
purchase up to 7% of AmerisourceBergen in the open market. The two were also
granted warrants that, if exercised, could lead to a 23% stake. Alliance
Skyworks Solutions (SWKS): The Company was known as Alpha Industries years ago, and made microwave products for the defense industry; now makes radio-frequency chips in concert with Qualcomm (QCOM) of Apple and Samsung phones. A good play on the growth of mobile communications. Minus excess cash, SWKS sells for 9x FY14 expected earnings. Revenue is growing by double digits.
ImmunoGen (IMGN): The company develops targeted anti cancer therapeutics using the technology it calls "Targeted antibody payload". IMGN licenses its technology to Biogen Idec, Sanofi, Amgen, Novartis and Roche. TAP is a simple MaB that carries its lethal payload of anti-cancer drugs to its target site and the drugs are more effective and cause fewer side effects. The company is cash heavy, with $194m in cash and zero in debt. With the current interest in cancer therapy and the fact that larger Pharma companies are looking for technologies, the company might end up being a takeover target over a year or more.