Partial Sale: Iteris (ITI)
From CONTRA THE HEARD
Updated from WSBI 747, July 24, 2013
Today Ben joined Benj by reducing his stake in Iteris (ITI). In all, 5,000 of the 7,000 shares were sold. While quarterly revenue hit management´s projection and the backlog was a record, the company still wasn´t able to turn a profit. In the aftermath of the earnings release the stock drifted lower but in the past week has found its legs again and is driving higher.
Though the agriculture division remains small, its growth prospects appear encouraging and should produce 80% gross margins according to management. In the meantime, the transportation side of the business continues to accelerate with more product launches and backlog growth.
Though we are happy with the sales and think sticking to sell targets is prudent, curious subscribers may wonder why we didn´t sell the entire position in either portfolio. We certainly see a rational for jettisoning the entire stake, but feel that the odds of the stock going higher are
fairly good and it is worth sticking around for that possibility. It is near the $4.00 mark, the share price momentum is strong, and the business is moving forward solidly under the CEO who arrived less than a year ago.
Therefore, we thought it worthwhile to keep some skin in the game.
Benj Gallander, Contra the Heard Investment Letter, www.contratheheard.com, 416-410- 4431, September 6, 2016