New Buy: Neutral Tandem
This idea is a courtesy of Above Average Odds and Cale Smith. Cale wrote up the idea a while back. Above Average Odds brought it to our attention. I highly recommend reading Cale’s write-up and Above Average Odds interview w/ Cale. I don’t have much more to add besides what has already been written up. Here are a few things that attracted me to the idea:
– The company has a leading position in its industry with no major threat
– The company is using cash flow from current line of business to enter another line, ethernet exchange, which has a huge potential market size.
– Management is using cash flow to buy back shares
– Company has almost 50% of market cap in cash with no debt
– A smart and competent management team at the helm