Pointer Telocation: Severe Mispricing Points To 75%+ Upside Over Next 12 Months

By Dane Capital Management, LLC:

We believe Pointer Telocation (NASDAQ:PNTR) represents a significantly mispriced security. At 6x EV/2014 EBITDA it is inexpensive on an absolute basis, trading at a near distressed multiple. However, relative to its comp group, including CalAmp (NASDAQ:CAMP) which trades at almost 19x EV/FY15 EBITDA, despite a similar margin structure and growth rate, it appears dramatically undervalued. Pointer has a strong growth history, and participates in an industry with secular tailwinds. At current prices we believe Pointer offers a significantly asymmetric risk-reward profile, with limited probability of permanent capital loss, and real potential for a multiples return over a multi-year time frame (and a significant return over a shorter span). This is not an investment where we are depending upon a successful turnaround, major new customer wins or improving fundamentals – this is simply an ignored company whose current valuation does not appear tied to any relevant metrics. In our view, based


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