Mitel Networks (MNW-T)

(Past Top Pick on Feb. 15, 2018, Up 29%) An acquisition last year accelerated their move into the Cloud which is higher growth. The market didn't appreciate this move until MNW announced a few solid quarters. Then it was announced a private equity company would acquire MNW. Currently, they're in a period where MNW can field other offers. He still holds it.

They focus on unified collaboration. They trade at a low multiple and he thinks they are not getting credit for their increased penetration of cloud. Public cloud companies trade at way higher multiples. (Analysts’ price target is $14.65)

Year-over-year sales were down 11% and earnings were down 28% in November. For the coming quarter, earnings are expected to be down 13% year-over-year. PE is relatively modest at 9.9%, but growth is forecasted at 23%. If they can actually deliver that growth, the stock appears to be attractive, but with estimates being chopped, analysts are sceptical.

(A Top Pick July 29/15. Down 17.4%.) It is still cheap and he still follows it, but no longer owns it.

(A Top Pick June 17/15. Down 25.24%.) Got out of this quite a while ago, but it is still an interesting name. Had always expected they would find a good cadence of earnings and get that growing, but they still haven’t been able to get that. If you like companies that generate free cash flow and trade at low multiples, this is a pretty good name to own. However, you have to be able to put up with the volatility.

(A Top Pick June 17/15. Down 7.79%.) This has been in the news quite a bit in the last little while. There has been talk about them buying Pollycom (PLCM-Q). They paid a lot for the big acquisition of Mavenir, and the street hated it. It is taking a while to show the merits, and he believes they eventually will. Also, thinks a deal with Pollycom would be pretty good.

(A Top Pick June 17/15. Down 14.79%.) Bought the stock when they had made a big acquisition which he thought was fantastic. However, it got pushed out a little too far into the future so he got out. Has enormous potential, but is going to take time to come through.

Likes the valuation. Thinks the market has it wrong on how they value it. It is a sum of the parts type of valuation for this business. Acquired Mavenir which does “voice over IP” which was great because it was a growth vertical growing 20%-25%. He got spooked when he thought Mavenir was going to take a lot longer to work through the system. A very slow growth type business. This is on his back burner.

He has held it for quite a while. He has been lightening up recently. It could be at risk because of debt on their balance sheet. They lowered their guidance for next quarter. This is a high growth business. Stick with it if you have a long horizon.

A free cash flow type company that is getting a little bit more on the growthier side with the recent acquisition of Mavenir. Believes that after reporting a few quarters with Mavenir, which is growing at 25%+, you are going to see revenue growth going from 1%-3% to maybe 5%-6%. That is going to cause a re-rating in the shares if they can execute on that, which he believes they can. Trading at 9X earnings. In an environment, where he is having a hard time finding stocks trading below 15X, this name really stands out as being depressed, undervalued and underfollowed.

Everybody thinks of this as being a phone system company, and phones are dead. They are getting into that whole Cloud segment where they are shifting their customers from being on premise to being in the Cloud, which has a whole lot of benefits. Have a whole bunch of software they can manage that with. Bought a company for $500 million plus, which does the same thing in mobile. They think the next generation of mobile will be over the Internet. Expects that when the street starts to see revenue growth coming in at 8%, versus their historical 1%, they will be looking at this very carefully.

(A Top Pick March 6/14. Up 13.68%.) Got out of this in June when he saw other opportunities. This is still a great story. If you own, continue to Hold. It is still on his radar screen.

It is a good time to enter it. Reported earnings last week and guided down due to the Astra side of the business due to seasonality. This is a synergy story and a cloud based story. This will become a growth company after they transition people to the cloud side of the business.

He did cover Astro, which merged with this company. Hasn’t yet picked up coverage of the new company, but the combined combination company is quite attractive. Valuation is very good right now. Solid balance sheet. Have lots of European exposure, which is getting much better. Good products and good cash flow. Still very, very cheap on a comparable basis to a lot of tech companies.

One of his Top Picks previously. Thinks merger with Astra will create a lot of synergies for them. Thinks their numbers continue to rise up.