China Security and Surveillance Technology
(OTC:CSCT) shares may soon get a much needed boost from Conrad
Bringjourn's Clinton Group. The activist hedge fund sent a letter to
the company commending management's execution to date but cautioning
that its shares were substantially undervalued. Shareholders are hoping
that the hedge fund can work with CSCT to unlock value for everyone.
China
Security and Surveillance is trading below its value for several
reasons. First, the company is traded over-the-counter which makes it
much less liquid and thus less preferable for investors. Secondly,
there is very little in terms of analyst coverage or investor
relations, which makes it difficult for investors to find the company.
Combined, these factors have led to a company that is trading at just
12.1x consensus 2008 EPS with a PEG of only 0.4x - making the stock
extremely undervalued given management's execution!
The Clinton
Group offered to help the company obtain a timely listing on the New
York Stock Exchange (NYSE) that would help it enable it to offer
investors greater liquidity while also attracting more attention. More,
E-House China's recent IPO on the NYSE and subsequent dramatic rise is
a clear indication of Wall Street's appetite for successful Chinese
firms. Shareholders are hoping for similar results from this company
after a listing.
The Clinton Group offered to support and advise
the company in finding two independent directors as well as introducing
the company to equity research analysts and prominent investment banks.
If successful in generating additional interest and liquidity in the
company, CSCT could see a substantial rise in share value. This makes
the stock one
worth watching!