Iteris Inc (ITI): Laughing Water Capital Loves This Top Performing Stock

Laughing Water Capital is bullish on Iteris Inc (NASDAQ:ITI), a California-based firm which is engaged in providing information solutions for the transportation and agriculture industries. Shares of the company are up more than 170% this year. Iteris is among the top five positions of Laughing Water Capital. The hedge fund made important comments about Iteris in its Q3 investor letter (you can download a copy here). Let’s take a look what Matthew Sweeney, the founder and managing partner of Laughing Water Capital, in the letter, said about Iteris:

In our last letter, I noted that curiously management created a new, separate legal entity to house the agriculture/weather business, which suggests that an eventual sale of this business may be somewhere on their radar. Adding to the intrigue, Iteris recently hired Jim Chambers to run the agriculture/weather business. A review of Mr. Chambers’ CV reveals that of the previous companies where he was employed, four (4!) of them were acquired. It seems clear that management has positioned the agriculture business for eventual sale, and hired an executive that knows a thing or two about selling businesses. However, the company has also registered a shelf which would allow them to raise capital in a secondary offering. If the agriculture business was sold in the near term it would be unlikely that the company would need to raise additional cash, so the tea leaves are muddled. This is just fine because the company continues to execute at a very high level, and the traffic management business remains an undiscovered gem at the forefront of the future of intelligent transportation and autonomous vehicles.

Everything Possible/Shutterstock.com

Iteris Inc (NASDAQ:ITI) is a $191-million market cap provider of applied informatics for transportation and agriculture. The company collects, aggregates and analyzes data on traffic, roads, weather, water, soil and crops to generate precise informatics for safer transportation and smarter farming. Its clients include municipalities, government agencies, crop science companies, farmers and agronomists.

Among the hedge funds tracked by Insider Monkey, there are six funds with bullish positions in Iteris Inc (NASDAQ:ITI). One of those funds is Citadel Investment Group, which opened a new position in the company during the third quarter.

For its second quarter of fiscal 2018, Iteris had total revenues of $25.2 million, up from $24.1 million in the same quarter a year ago. Operating expenses in the quarter were $11.1 million, up from $9.6 million in the same quarter a year ago. The company booked a loss of around $984,000, or $0.03 loss per share, compared to a loss of about $40,000, or $0 per share, in the year-ago quarter.

Shares of Iteris Inc (NASDAQ:ITI) have been performing well so far this year, with the stock surging around 178% year-to-date.

You may be interested in reading Laughing Water Capital’s investment thesis on IES Holdings, Franklin Covey, Redknee Solutions, and EZCORP.