Unisys Corporation
(NYSE:UIS) is set to move higher today after MMI Investments filed to
boost its stake in the company above 10 percent but not more than 15
percent. The Hart Scott Rodino Antitrust Act required the activist
hedge fund to seek permission before making its purchase, which gives
investors a chance to jump on the opportunity.
Unisys is a
worldwide technology services and solutions company whose consultants
assist clients with general consulting, systems integration,
outsourcing, infrastructure, and server technology. The company's stock
is currently trading at $7.53 slightly off of its 52-week high earlier
this year of $9.70.
A glance at the financials shows that the
company is trading slightly below enterprise value with a P/E multiple
of 17x - below the industry's 24x. It is also worth noting that the
company has approximately $520 million - or $1.49 per share. This has
led to speculation that MMI may be interested in unlocking value for
shareholders through a special dividend or share repurchasing using the
company's substantial amount of cash.
Unfortunately, the company
faces negative quarterly growth, a paltry 1.78% ROA and a -19.83% ROI.
These numbers point to a company that is struggling to operate cleanly
and efficiently and that is also facing problems extracting revenues
from its customers. As a result, MMI may have to work to help the
company turn itself around before any value can be had from the
company's pile of cash. However, this situation is definitely one
worth watching!
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