LAPORTE, Ind., Feb. 18, 2010 (GLOBE NEWSWIRE) -- Timothy Stabosz today announces the filing of an amended SEC Form 13D, on February 5, 2010, indicating an increase in his ownership stake to 9.4% of Cobra Electronics Corporation's (Nasdaq:COBR) common stock, making him the company's largest stockholder. (Stabosz filed his original 13D on November 12, 2009, indicating 5.8% ownership, and a previous amendment on December 28, 2009, indicating 8.1% ownership.) Subsequent to the latest filing, as of the close of business on February 17, 2010, Stabosz has further increased his position to 9.9% of the company, as a result of additional open market purchases. Stabosz's latest 13D filing is accessible here, in its entirety:
http://www.sec.gov/Archives/edgar/data/30828/000116289310000001/cobr13d3.txt
In summarizing the filing, Stabosz, a private investor, stated, "I have acquired the shares for investment purposes, as I believe Cobra's common stock is significantly undervalued. In my opinion, the company possesses a material amount of tangible and intangible value, that is simply not being recognized by the marketplace. Tangible value is evidenced in the relationship of the current stock price to traditional value-oriented metrics, such as price/book, price/sales, and price/historical earnings. (The company also possesses roughly $10 million of "NOL" tax carryforwards...currently written down to zero on the balance sheet.) Intangible value is evidenced in 1) the solid reputation of the company's two core brands, which afford an essential value-added "cachet" in the intensely competitive consumer electronics space, 2) the company's exclusive positioning with key retailers, 3) its domestic market leading share (roughly 2/3) in both radar detectors and CB radios, and near market leading share in 2 way radios, 4) its history of being in the vanguard of innovation, and, 5) more recently, as indicated in the company's January 6th press release, the augmenting of its business model towards becoming a higher margin "content" provider, through the licensing of its proprietary AURA Camera and Driving Hazard Database.
"With the company's significant cost reductions achieved in 2009, and an economic rebound, I believe there is considerable potential for a turnaround in Cobra's operating results," Stabosz continued. "However, I also believe that if the company's return on equity should be less than satisfactory, going forward, Cobra could be an ideal candidate for a potential sale or 'breakup,' in an improving M&A environment. Looking ahead, the company needs to justify the onerous costs it incurs in being public, and the generous compensation provided to management, and take a cold hard look at whether more value can accrue to shareholders, employees, customers, and other constituencies, by allowing a larger and/or more deep-pocketed entity to step in and steward the company, allowing it to be 'taken to a higher level.' The jury is still out, but I believe this is an imperative that management and the board of directors, as they diligently work to build internal value, will need to remain keenly focused on, particularly over the next 12-18 months," Stabosz concluded.
Timothy Stabosz is a private investor specializing in "Graham & Dodd" style micro-cap value investing. He has no direct affiliation with Cobra (other than being a 9.9% shareholder).
Disclaimer: In no way should the foregoing be considered investment advice, or a solicitation to buy or sell securities.