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Cabot Benjamin Graham Value Investor Special Bulletin

Synchronoss Technologies (SNCR) is the subject of an investigative report published today by the Southern Investigative Reporting Foundation.

Synchronoss Technologies (SNCR 30.62) is the subject of an investigative report published today by the Southern Investigative Reporting Foundation. The in-depth report was forwarded to me by my colleague Jacob Mintz, Chief Analyst of Cabot Options Trader, and by one of my subscribers, P.R.

Synchronoss’s proposed purchase of IntraLinks and sale of the company’s Activation unit is troublesome. The price paid for IntraLinks is high, and the amount received for the Activation division is low. The transactions are clouded by the SNCR executives and friends involved. These insiders will be highly rewarded by the purchase and the sale at the expense of Synchronoss shareholders.

The impact on SNCR’s shares are being felt today, with the stock price down 0.8%. Additional negative reports will likely appear, that will send the stock down considerably further. You can access the full report here.

I recommend selling your SNCR shares now. Sell.

In today’s Weekly Update, I suggested selling Convergys (CVG) and TRI Point Group (TPH). In case you missed my recommendations, I am repeating them here:

Convergys Corp. (CVG 22.63) reported lackluster results. Sales advanced 1% but EPS fell 11% after sales were flat and EPS rose 2% in the previous quarter. Management forecast flat sales growth and flat EPS growth in 2017 disappointing investors. CVG shares fell 9% in reaction. After solid sales and earnings gains in the first half of 2016, Convergys has fallen into a mild slump which will likely continue through the end of 2017. Therefore, I recommend selling your CVG shares now.

Convergys was first recommended in the December 2014 in the Cabot Enterprising Model using my low price to book value analysis. The stock has gained 12.2% during the past 26 months compared to an increase of 17.9% for the Standard & Poor’s 500 Index. Sell.

TRI Pointe Group (TPH 12.11) reported disappointing fourth quarter results. Sales declined 12% and EPS dropped 31% after decreasing 11% and 29% in the previous quarter. TRI Pointe’s backlog units increased 3%, but the dollar value of its backlog decreased 5%. The average sales price in backlog at quarter end fell 8% to $554,000.

Management is optimistic that the company can deliver 10% more homes in 2017 than in 2016 at an average price of $570,000, an increase of 3% over 2016. Compared to the company’s backlog, management’s forecast seems unachievable. Therefore, I advise selling your TPH shares now. Sell.