Mitek & other Lockbox stocksHello Travis, Just wanted to point out that when I went to CNBC this evening to check a couple stock quotes I happened to notice a headline where Jim Cramer is recommending people start a position in Mitek. For the record, I do not listen to or read Jim Cramer, but I thought it was interesting as this is not a large company that you tend to hear a lot about and as a new member I had recently read your lockbox portfolio halftime report and immediately recalled Mitek as being one of the companies in it. Do you still feel a strong conviction for Mitek? In hindsight, the timing of launching the lockbox was unfortunate based on what has happened to the market since then, but during a time like this when we’re all building a list of “babies thrown out with the bath-water”, I’m very interested to know how much conviction you still have for the names in the lockbox and if you feel this list may represent a good core of companies that can now be bought at a discount and hold for the long term, vs. which ones who’s future trajectory may have been damaged. Thanks, Kevin
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Good question, and that is a pretty small stock for CNBC to be trumpeting. Mitek is arguably the cheapest stock in the Lock Box portfolio, on an earnings basis, so if we’re heading into a real reset to “value” and folks begin to demand actual earnings and profitability again, at lower multiples, then MITK might indeed get some attention.
I’ll try to dig into your question about the rest of those names a little more deeply in the future, thanks. They’re certainly less expensive than they were when I bought them, and I’ve tried to avoid companies with fragile balance sheets who might have to raise money during a bear market, because that’s often the death knell for a smaller stock… but many of them are companies that also need a few years to reach sustainable profit growth, and it might be hard for investors to conjure up that kind of patience at the moment.