Roumell Cuts Exposure to Transcept Pharmaceuticals (TSPT) and Ups Stake in DSP Group (DSPG)

Jim Roumell’s Roumell Asset Management, filed yesterday, two forms disclosing its current positions in Transcept Pharmaceuticals Inc (NASDAQ:TSPT) and DSP Group, Inc. (NASDAQ:DSPG).

In relation to DSP Group, Inc. (NASDAQ:DSPG), Roumell reported an increase in its ownership, to a current amount of 1.06 million shares, from 984,200 shares declared in its last 13F filing. The fund’s holdings in the company are valued at more than $9 million.

DSP Group is a micro-cap (less than $200 million market cap) company that provides system solutions that combine semiconductors and software with reference designs. Despite its razor thin margins and returns, and poor EPS growth projections, its stock trades at 88.5 times the company´s earnings, but only at 1.3 times its sales. However, its valuation does not seem justified. Notwithstanding, Roumell has been upping its stakes in DSP Group, Inc. (NASDAQ:DSPG) for several months now.

Jim Roumell

Other funds betting on DSP Group are D E Shaw, which last reported having increased its stakes by 7% over Q3, to 81,300 shares. On the contrary, the three remaining funds among the top 5 bulls in DSP Group, Inc. (NASDAQ:DSPG), Starboard Value Lp, Nokomis Capital and Renaissance Technologies all reduced their holdings over 2013’s third quarter.

On the other hand, Roumell Asset Management declared trimming its position in Transcept Pharmaceuticals Inc (NASDAQ:TSPT), currently holding 2.20 million shares, Roumell reduced its participation in the company by about 2%, in relation to its last 13F filing, for 2013’s Q3. The stake held by Roumell now amasses around 11.7% of the outstanding stock. Earlier, the fund acknowledged selling 48,200 shares of the company. Then, on Dec. 31st, it sold another 59,600 shares.

These moves are quite understandable, given Transcept Pharmaceuticals Inc (NASDAQ:TSPT)’s negative margins and returns and awful growth projections. In fact, most analysts seem to agree on the idea that Transcept is clearly a “hold” case, for now. However, other hedge fund managers like Jim Simons, D. E. Shaw, Cliff Asness and Paul Touradji do not seem to agree with this view, as all of them last reported having added this company´s stock to their equity portfolios (and we are talking about, at least, 10,000 shares each).

Disclosure: Javier Hasse holds no position in any stocks mentioned

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