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.