INVEST OR DIE: THESE TWO LITTLE PIGS HAVE WINGS
***PTGI sold on April 16th, 2012 +36% since posting
***GSIG sold on April 9th, 2012 +6% since posting
I have two post-restructuring plays that are worth a gander:
- PTGI - Primus Telecom
- GSIG - GSI Group
GSIG...I was long the company when it was in bankruptcy during 2010, buying initially in the $2 range and riding it up past $10. I sold out in the first quarter of 2011. The company has done nothing but strengthen its position over the past year, while the per share price has literally gone nowhere.
Cliff notes version of GSIG investment thesis: overpaid for an acquisition some years ago...caused the company to go into bankruptcy...previous management tried everything to dissolve the equity in the company...activist investors became involved...equity committee was formed...activist investors litigated the matter...activist investors won in court...management ousted...company restructured...equity saved...businesses all intact...a new, experienced management team resides over the company now...generating substantial growth...largely insider owned....undiscovered still to this date.
PTGI is a little more complicated of a story. I'll turn it over to Wikipedia for an explanation of what the company has gone through over the past 20 years http://en.wikipedia.org/wiki/Primus_Telecom
Cliff notes version of PTGI story: much hyped telecom play in early 2000...took on too much debt...forced into bankruptcy...reduced debt substantially....activist investors have become involved...their business continues to grow...they are a cash flow machine...greatly undiscovered company....was on the pink sheets before the middle of last year...now trades on NYSE.
Should the global economy and thus the markets resist the urge to cliff dive in 2012, both of these companies can see substantial upside before year end.
