Espial is a possible takeout candidate, says AGF’s Imhof

Espial (Espial Stock Quote, Chart, News: TSX:ESP) has had a good run of late, but interest in the Ottawa-based supplier of digital TV and IPTV software may just be getting started.

Peter Imhof, vice president and portfolio manager, at AGF Investments was on BNN’s “Market Call” Monday to share his top picks.

Imhof thinks the company is a potential takeover target, citing one recent analyst report that says Cisco may be looking to buy a company in the set top box space.

The portfolio manager says one of the reasons Espial is among his top picks is because he admires the company’s management team.

“The management team underpromises and overdelivers,” he says. “Every time they reported quarters, the quarters were much better than expected.”

Espial will report is fourth quarter and fiscal 2014 results on Thursday.

Imhof says it is his understanding that the unnamed European cable operator the company signed as a client back in January is a tech savvy customer that could act as a reference account for other wins.

The portfolio manager offers that at around ten times next year’s EBITDA the multiple is “a bit high”, but thinks the company’s earnings and EBITDA should grow quite a bit.

At press time, shares of Espial were up 5.4% to $3.31.

Click here for the full interview.

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