A Good Activist To Follow: Becker Drapkin’s Top Picks

EMCORE Corporation (NASDAQ:EMKR) is next on the list of potentially attractive value stocks, in which Becker Drapkin Management owned 3.20 million shares valued at $17.39 million. The fund kept the position unchanged over the course of the first quarter. EMCORE Corporation (NASDAQ:EMKR) is a $197.85 million company engaged in the production of semiconductor-based products. Besides having $458 million of NOLs that start to expire in 2021, it has $141 million in cash on the balance sheet, which is even rarer than in the previous example. Though the shares of this compnay appear rather attractive, Steven Kiel warns that potential investors should dig a bit deeper into the current operations of the company. Brett Hendrickson‘s Nokomis Capital reported owning around 2.31 million shares with a total market value of $12.54 million, which makes him the second-largest shareholder of EMCORE Corporation (NASDAQ:EMKR) in our database.

Lastly, Becker Drapkin’s stake in Comverse Inc (NASDAQ:CNSI) equaled 1.45 million shares, with a value of $28.52 million. Comverse Inc (NASDAQ:CNSI) might have appeared on the radar of Becker Drapkin and other value investors as it was a pure Graham-type net-net. As Steven Kiel noted in his review, recently the company closed the sale of its subsidiary and got a good chunk of cash, which would not appear on the balance sheet, and hence, most popular stock screeners, until September. Also, the company held some NOLs and according to Steven, the fair price of Comverse Inc (NASDAQ:CNSI) should be some $21.50. As of June 24, when he published his thoughts regarding the fair price estimates, the equity of Comverse Inc (NASDAQ:CNSI) traded around $20-21, providing a tiny margin of safety for investors. Since then, the price has slid even further to $18.70, making it even more attractive. However, in our opinion, potential investors should be careful regarding the fair price estimates, as Steven could have missed the effect of the latest $135 million acquisition of Acision, that would eat up a tangible portion of its free cash. Jeffrey Bronchick‘s Cove Street Capital followed Becker Drapkin Management in terms of size of ownership stake in Comverse among the investors we track, holding 700,095 shares valued at $13.79 million as of March 31.

Disclosure: None