Tieton Capital Management

4700 Tieton Drive, Suite C
Yakima, WA  98908
(509) 965-6488

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January 22, 2018

January 28, 2018 By Lora Leavenworth

Purchased Apogee Enterprises (APOG): 

  • Commercial glass and frame manufacturer
  • Betting management will be able to turn strategic acquisitions to financial accretion
  • Expect service backlog will lead to installation business rebounding
  • Margins forecasted to expand over time
  • Expansion into mid-height buildings should significantly increase available market
  • Geographic expansion could provide a multi-year runway for growth
  • Trading at less than 13x coming year’s growth

Purchased Steelcase (SCS): 

  • Leading office furniture designer and manufacturer
  • Look for European margins to expand with new, more efficient manufacturing
  • New products addressing changing styles should benefit revenues
  • Anticipate growth in Asia/Pacific
  • New European design center should raise prominence and revenues in Europe
  • Capital expense incentives in new tax bill could be meaningfully positive
  • Believe industry and company at beginning of cycle

Added to Key Tronic (KTCC): 

  • Differentiated contract manufacturer
  • Unique competitive advantages leading to market share gains
  • Company struggled to regain meaningful revenue growth in recent times with loss of large customer
  • Stock price dropped since October when company signaled they were close to winning a large new customer
  • Trading at approximately 60% of book value
  • Believe new business will soon create revenue and earnings momentum 

Sold Lattice Semiconductor (LSCC): 

  • Design programmable logic semiconductors
  • Agreed to be acquired by Canyon Bridge
  • Significantly trimmed position after announcement and subsequent price rise due to concerns U.S. Government would block sale
  • Sale was blocked
  • Company held analyst meeting that enthused investors
  • Company hasn’t delivered on promises for too long
  • Used enthusiasm around analyst meeting to sell remainder of position

Trimmed Vonage Holdings (VG): 

  • Provider of voice over IP services, also known as VOIP, to business and residential clients
  • Management masterfully executing business plan to improve business mix and growth rate
  • Stock price rallied strongly following benefits from strategic, revolutionary acquisition
  • Valuation reflecting lots of good news and future growth
  • Consequently, trimmed to one of smallest positions in the portfolio

Trimmed ZAGG (ZAGG): 

  • Develop and market accessories for mobile devices
  • A year and a half ago, investors lost confidence management could turn mophie acquisition to profitability – we disagreed
  • Hence weighting raised to 5% at that time – highest will buy
  • Management was successful and share price rallied sharply
  • Trimmed a few months ago when weighting grew to 10% of portfolio – largest we will own
  • Trimmed again after price rose further and weighting once again grew close to 10%

Filed Under: Portfolio Change Updates

Archieve

  • December 21,2020
  • February 27, 2020
  • April 18, 2019
  • December 4, 2018
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