Q: KXS is down a lot Thursday morning. Is this an over reaction or is it time to think about reducing position. 5i has been generally quite positive about KXS but I detect the sentiment is shifting. How do you view the stock performing over the short term and long term? What catalysts will influence things?
5i Research Answer:
We have Q4 comments posted; catalysts will continue to be contracts, earnings and/or acquisitions. We are a bit frustrated, and think the company needs to make an acquisition or do a $200M share buyback. We like strong balance sheets but it has sat on $200M+ cash for seven years. Very strong growth is still expected over the next two years but it needs to deliver. It may go quiet for a period of time after this quarter, but in general we are still positive, but perhaps less positive than before.