“This 26% undervalued small stock is a huge BUY”

By Travis Johnson, Stock Gumshoe, March 22, 2007

Here’s another one for you — and unlike most of the stocks that I write up here, I’m not 100% certain of this one … but I’m pretty sure.

This one came in from a reader (feel free to email me your stock teasers to ilovestockspam@gmail.com, though I can’t promise to get to all of them), and it’s from an ad for Richard Suttemeier’s Small Stocks service from RightSide Advisors.

Here are the clues, and they’re very paltry:

This “well known service company” is “26% undervalued”

It’s out of favor on the Street.

It’s poised to merge with a rival “sometime this year … making it arguably the number one provider of its kind of service in the entire country.”

Suttmeier teases: “So what is the Small Stock that is poised to jump next?”

The Stock Gumshoe tells: Sirius Satellite Radio (SIRI)

As I said, I’m a little less than 100% sure of this one … but I’m pretty sure. Here’s why I think it’s Sirius:

Suttmeier writes for theStreet.com, and often refers to Valuengine valuations … they put Sirius at undervalued somewhere in the mid-20% range, depending on the day you check the quote. So that fits.

Sirius is under $10 — Small Stocks is an under-10 service.

They’re trying to merge with XM, which everyone knows, and it would make them the dominant provider of their service, the “arguably” takes account of terrestrial and digital radio competition, I suppose.

And finally, the fact that these are the paltry few hints he provides makes me think this is an incredibly well known company. So that’s a bit of a leap, but an educated guess. If he had provided any kind of hint of the industry or sector it was in, it would have been a no-brainer.

So that’s my best supposition — I don’t know Suttmeier’s service well or know if he’s been successful, and I have no idea whether Sirius will rally. The share are certainly cheap relative to where they’ve been, but with two massive competitors in the space fighting it out to see who can lose more money, and with a possible margin-saving merger very much in regulatory limbo, it’s not a name I’d personally want to invest in. But at least you have an idea of who he’s talking about … and it didn’t cost you a subscription.

If anyone has a better idea that matches these clues, let me know.

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