Unisys Corporation (NYSE:UIS) is starting to feel the pressure from shareholders who believe the company is undervalued. One shareholder, MMI Investments, disclosed a 9.9% stake in the company and indicated that they plan on pushing the company towards pursuing strategic alternatives. Shareholders are hoping that the activist investors will be able to help the company turn itself around and come to value.

Unisys Corporation's poor growth record over the short and long term indicate a troubled and uncertain business model. The company's latest earnings announcement caused a 20% drop in the days surrounding the announcement while the company is averaging a -230% earnings surprise over the last six quarters - not exactly what investors want to see! Many shareholders are skeptical as to whether or not the company will be able to turn itself around.

Management has performed well in the past growing the company's earnings per share; however, recent losses and a lack of top line growth suggest that the company is facing serious problems. This becomes a big problem when you consider Unisys' long term debt that accounts for 98% of its total capital. This makes the balance sheet somewhat unsafe given that the company only has $448 million in cash and total debt amount to $1.04 billion.

In the end, there are a few good things about this company. First, the company's price to sales ratio sits at just 0.4x, making it one of the most undervalued in the sector. Meanwhile, the company did report strong cash flows during the last quarter, which is a good sign. However, there are many negative aspects of this company as well. Ideally, an activist shareholder would be able to seek strategic alternatives and turn thing around. This makes UIS a stock worth watching!

Related Companies
Perot Systems Corporation (PER)
SRA International Inc. (SRX)
Aware Inc. (AWRE)