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CalAmp Corp. Message Board

  • spanspur spanspur Feb 27, 2013 12:57 PM Flag

    Heez, Nitacs, Sarge...............

    Thanks for the honorable mention, but how savvy of a trader can I be when I had a chance to to replace the 5K shares I sold at $10.65 to $10.82 last Friday. I could of replaced them yesterday, and been up $2500 today.
    Typically I am a directional long investor who looks for undervalued situations.

    Nitacs, in regard to Vitelle, if I remember correctly all of CAMP's tax loss credits are going to be used this quarter, for the April cc, the tax loss credits are being advanced. After that there will be no more tax credits which if memory serves me correct were approximately $35 million. Also, if memory is right, CAMP has already announced that the tax credits will help create $1.08 GAAP (not non-GAAP) for this next cc. That alone will read very well, and will help mask the costs of the WM acquisition. Vitelle did mention that CAMP management would suggest looking at the non-GAAP #'s as a better more realistic view of the company.

    With all of that being said let's take an objective look at the company's future. WM will take time to digest and will be costly. Management has already stated that a $10 million bond issuance is coming in addition to the secondary which was recently completed. The markets that CAMP serves, the MrM, is very hot right now as NEW applications are being adapted to a wide variety of situations. MrM is expected to grow $500 million per year globally for the next 3 to 5 years. Historically CAMP was supplying 5% to 7% of global demand, of course, that was prior to the boom that is now ongoing. Burdiek states, "we continue to gain share".

    But reality is always our backdrop, but the markets are irrational and tend to go to excess. CAMP will do $210 to $230 million in revenues in 2013 (maybe more, but that is my read). GAAP profitability was tracking at $.65 per share prior to the WM acquisition. Historically CAMP has never made an acquisition which has been immediately accretive, but here again management is floating the same verbage. If it happens it is great, if it doesn't watch out.

    With the shares that are promised to management let's call it 35 million shares outstanding. 35 X $11.50 = $405 million market cap with a slighting higher enterprise value. A 5% cap rate brings $20 million to the bottom line, 10% cap obviously $40 million. But you have to remember the expenses of the WM acquisition.

    CAMP management is loaded with shares they bought between $2 and $4.65. Many are ready to unplug and retire. Here's what I see, 1) I still expect the company to be bought out within weeks after the WM acquisition
    2) CAMP is fairly valued this morning 3) watch for a rapid run-up in share price before the next cc to the $15 level (market cap of approximately $500 million plus).

    One thing for sure, I wish I had all my shares back that I sold. Black Rock is holding 2 million + shares and they are looking to make a killing. Interesting to note, one of my mentors, admittedly an arms length mentor, someone on the Forbes 100 list, just made $20 million on a paper shuffle with Black Rock, his brother did well also. Whenever he talks.........................I listen. Some guys just know how to make money. He too is a value investor with a longterm perspective.

    Sentiment: Hold

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    • Spanspur, there are a couple of your comments I have issue with; the first is retirements; Burdiek is only 54 years old; I see him at the top of his game, having engineered a complete turnaround in this company; I can't see him retiring any time soon.
      The second issue I have is the tax expenses; I went back to the last conference call, and here are Vitelle's comment about taxes: "next year we would begin reporting income tax expense at full statutory rates even though on a tax return basis, our income will still be largely sheltered from taxation by these NOL and tax credit carry forwards. Our nonGAAP earnings method recognizes as a tax expense only the tax is paid or currently payable in cash, and for this reason, our non-GAAP earnings will not be affected by the year-over-year comparability issues that I just described. So we encourage our analysts and investors to pay particular attention to the non-GAAP results going forward."
      This quote by Vitelle is what I was referring to in my comment to Heez.
      This is why I agree with you that for these reasons, and the positives you mentioned in your comment, that $15 will come rather quickly.

      OT: Sarge, It's SANDY Koufax! My favorite lefty of all time was Warren Spahn, since I grew up in Wisconsin.

      • 2 Replies to nitacs
      • Responded to this last week but for some reason it won't open. These new boards flat-out suck. I swear Yahoo took the envelope to discourage us little guys from sharing. Just wanna say span you are savvy but no one captures every penny of every move. You're too hard on yourself. Also to those who don't keep track of the loss carry-forwards and the non-GAAP it may appear that CAMP has had a really bad Q or is heading in the wrong direction when they finally get back to even. But great commentary and appreciate the opinions all.

      • Ooops! I stand corrected! ("Eddie" Koufax... OH!)

        Sentiment: Buy

    • Spanspur, that was one-hell of a post! Thanks for unleashing your integrity!

    • Span, I think you have the same problem as Eddie Koufax had as a young pitcher: he was incredibly fast, but wild. His coach told him to "slow it up" just a hair. With that, he became VERY fast and deadly accurate. I know trading depends on an iron gut and lightning speed, but if you slowed up just a hair (with belief in your gut) I think you'd be one seriously cogent investment/trader. Keep pitchin'.

      Sentiment: Buy

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