+ Watch NSR
on My Watchlist
The Company provides the communications industry with essential clearinghouse services.
Seem ready for a bounce back
I have been following Neustar for a very long time and believe the current decline year-to-date is unwarranted. Neustar has been involved with a messy process with the FCC to hold on to a series of government contracts to maintain a telephone numbering database in the United States. This database allows customers to keep their own phone numbers when switching carriers. The current contracts account for almost half of Neustar's revenue in 2013, and now the FCC wants to give it to Ericsson at a substantial discount. The problem, however, is that Ericsson is not eligible to obtain this contract even if they offer a much cheaper bid. Since Ericsson manufactures equipment for telecom companies, Ericsson faces the possibility of favoring its customers when it comes to switching carriers. To illustrate this point, if AT&T, for instance, makes a sweetheart deal with Ericsson to prevent AT&T customers from switching carriers when getting a new phone, that is a competitive advantage for AT&T. Neustar does not have this same issue because it does not provide anything other than the management of the database. Regardless of this illegality, the FCC and the NPAC look to give Ericsson the contract. Given Neustar's flawless performance in handling the database, this came as a shock to investors, and the stock is now very heavily shorted as a result. I think the short trade is way too crowded (Yahoo Finance has the percentage of shares sold short as high as 30%) since Neustar still offers a solid value proposition for the NPAC and its other businesses are growing much faster than the NPAC contracts were, particularly its marketing analytics segment. Morgan Stanley also mentioned it as a possible takeover candidate a few months ago.
Strong fundamentals, but little noisy around this stock, I mean these lawsuits.
Lawsuit noise has beat down a good stock. Cheap FCF, insider buying, good sales growth.
Magic Formula stock. I know there are questions around the future of the number portability database, but I feel their other businesses will be able to carry on well, and at this P/E multiple the bad news is already priced in.
Random Greenblatt pick. Top 30 over 75M.
Magic Formula 12/13/2013
Too much revenue dependent on number portability contract. Competition for the contract is greater than company lets on. Heavy layoffs taking place at end of 2Q to adjust costs to match expected revenue losses.
Fool screen: roe 17, own 5, rev incr 15, profit incr 15, midcap
I'm a MF stooge:http://www.fool.com/investing/general/2010/12/03/this-undiscovered-monopoly-mints-money.aspx?source=ihpdspmra0000001&lidx=8
all communications need them.
are you kidding me
Joel Greenblatt Pick
This company has PE ration around 18 plus tremendous growth in recent year. Low valuation and high growth potential company.
Analysts at Wedbush Morgan upgrade NeuStar (ticker: NSR) to "strong buy." The 12-month target price is set to $41.
buying based on a bounce, good company anyway.
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