Infocrossing, Inc. (NDAQ:IFOX) revealed in a
13D/A filing with the SEC today that RLR Capital Partners has upped its stake in the company to 6.2% from 5.1% in June of this year. The fund has averaged in at around $11 since that time as the stock rose to the high $12s, netting them a nice 14% profit so far. The company also said in their
original 13D filing in June that they have other plans for the company:
"The Fund originally acquired Shares for investment in the ordinary course of business because the Reporting Persons believed that the Shares, when purchased, were substantially undervalued and represented an attractive investment opportunity. The Reporting Persons have communicated with management of the Issuer, and expect to continue to do so, regarding the Company's business and prospects. On June 15, 2006, the Reporting Persons sent a letter to the Issuer regarding the Reporting Persons' prior meetings with the Issuer and forthcoming value creating strategic and capital structure opportunities. A copy of the letter is attached hereto as Exhibit 1 and is incorporated herein by reference.
We believe that the coming months will offer Infocrossing the opportunity to explore value creating strategic and capital structure opportunities. No other independent U.S. company in your industry offers the range of service capabilities you provide. We are confident that you and your board will focus on the best available alternatives to capitalize on your very favorable industry positioning in order to enhance shareholder value." (Read More)
IFOX is currently trading at a discount to its enterprise value; however, it's PEG shows that it may be slightly overvalued if it cannot improve its growth in the coming quarters. However, with a hedge fund in the game to keep the company on track and mindful of shareholder concerns, this may turn out to be a stock
worth watching. Any changes in capital structure or strategy could help the company cut costs and improve their bottom line.
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