Q: Any reason KXS is down $5 at this writing? There was an open letter yesterday to shareholders from a firm that owns 1.4% of the company questioning company performance. Is this the reason? What do you make of KXS performance? What do you see over the next 6-12 months?
5i Research Answer:
KXS rose $4.70/share in the preceeding two days, and remains higher than it was a week ago. There was no other news other than the Daventry letter on October 9. Note Daventry as noted only owns 1.4% and its influence is thus limited. We do think the company needs a bit of a shakeup, or at least to spend its cash. Daventry says there are significant interested party and of this we have little doubt. But so far it is just mostly talk from a disgruntled shareholder. Actions speak louder. Very strong EPS growth is expected in the next year, and if the company can execute we would expect better stock performance, especially in a lower rate environment.