I missed Zoom's big move

I wrote this post from Sept 15 - 17, 2015 when ZMTP was trading at about $0.80.  I placed an order for ZMTP on Sept 11, 2015 for something like $0.75.  It was a limit order for maybe 5 cents below market...man was I stupid.  I was trying to catch a low price rather than buying what I knew was cheap.  Costly mistake on my part but a good lesson to have.  When something fits just buy some then as time goes on you can try to get it cheaper.  Just as I finished my blog post ZMTP woke up and doubled then kept going higher, it now sits at $2.40 and I missed a triple.  I hold no shares.  I have had a limit order in off and on ever since but it has been fruitless.  I'm an idiot

COMX is as cheap as they come

Let's play 'value that company'.  Have a think about what you might pay for this:

• cash $3M
• total liabilities $2M
• debt $750k
• BV $6.3M
• TBV $5.7M
• 1.6M shares out
• no preferred or warrants
• revenue $10.3M
• net income $1M 2015 vs $0.7M 2014 vs $0.4M 2013
• EPS $0.62 vs $0.47 vs $0.24
• catalyst:  Nothing.  Patience is your only hope here.  HA!

NoName Annual Performance 2015-2016

What a year it has been.  Ian Cassel of MicroCapClub has a quote which I just love, "Don’t compare yourself to others. Compare yourself to yourself two years ago."  It's hard not to compare to others in something as tangible as investing but I try and this quote really helps.  When I think back to myself as an investor 2 years ago I smile.  In the first year I made some good decisions and mixed in a lot of luck; I wonder if I'd still be doing this if that luck wasn't there.  Things can be fragile when beginning down a new path.  

GIGA's glass is half full

When you look at a company do you see the past or look to the future?  Has the turnaround candidate been struggling or adapting?  Management may be selling off divisions, cutting back on headcount, or selling their building just to lease it back...is this to fund their salaries for another year or develop that new product?  Sometimes there are two valid paths and you have to decide if the company will continue down the old or switch to the new.  Such is the case with Gigatronics.  Maybe they keep losing money and end up in the tank.  Or maybe their new products deliver on all the promise.  Maybe management's excitement bears fruit.

Fidelity blocks dark companies

Well chalk up today to a bad day.  I found out this morning that Fidelity has decided to block companies marked with a stop from otcmarkets.com.  This includes at least the companies on otcmarkets Caveat Emptor list.  Generally for me this means Fidelity is blocking companies that don't file with otcmarkets.

MICT making moves

Often times I'll buy shares in a stock fairly quickly after finding it if it sounds good and fits my style. After reading further and maybe talking to management, etc I'll buy more and write a blog post to capture my research.  Usually there's a theme or overall story with each company and that's the way I like it. To me the best things are simple so I'm always happy to be able to chop down an investment to a single point.  Complication is cluttered and leaves room for error.

What does this have to do with MICT?  Well I bought shares a few months ago and was doing my further research last month. I read a bit more with the intention of finishing (it's never really done but can be done enough for now) and writing a blog post. Problem is no single clear theme jumped out at me so I put it to the side and moved onto another stock. Then today MICT came out with a PR about buying another company... So now it's time to follow through with my blog post.

ADDC on sale for less than cash

Here's another simple one. Let's say we have a dark company with $14 per share in cash, $4 in short term investments, about $10 in real estate, and a BV of $26.  They earn almost $1 per share and pay a 3% dividend.  Legit American company.  They send an annual report each year to shareholders and hold an annual meeting but otherwise report nothing. Don't even post the annual report to their website.  What would you say that's worth?  I'd go with $25 or $30, depending on how much you hate dark companies. 

Well the company is Addmaster Corporation (ADDC) and the latest price is $12.50. Super cheap.  You can stop reading now as you have the most important part of the story.  

Looking for a sale of MRCR

Here is a simple one.  This post could probably be one line long: company selling for 35% of BV with a 77 year old CEO.  It's that simple.  So you can stop reading now if you'd like

WPCS undergoes major restructuring

WPCS International (WPCS) has been in a death spiral for the last decade, falling from around $2000 per share in 2010 to around $1.50 now (split adjusted).  That is about 99.9% of the market cap lost.  Amazing.

I suppose there's two ways to look at that chart.  One view is of a falling knife to avoid.  The other view is of opportunity. 

The (possible) turnaround of FORD

How do you know if a turnaround will turn?  I know there's a Buffett quote about most not turning but some do, and when they do the investor who bought when things looked bad stands to make a lot of money.  Sometimes there may be some pretty good signs one way or the other but many times you are just not sure. Sometimes the best you can do, if you want to invest in this space, is look at the incentives and possibility then give them a chance.  Does the company have a clean share structure?  Do they have assets they could sell if need be?  Is management invested?  Is the whole industry dieing?  How's the debt?  

I'm sure many who read this will call it a falling knife and that's fine. It has been falling but there are positive signs as well. We'll see how it works out.

So let's talk about Forward Industries (FORD).  

Growth at CVV

CVD Corporation (CVV) is a $76M market cap company that manufactures equipment and delivers process solutions for various coatings.  They help take research products to production and sell coating equipment.  A few descriptions from their most recent 10-K:

QDLC at 1x earnings*

Let's say there was a company with the following stats:

What would you pay for this company?  Maybe 10x EPS = $1.60 per share?  If the growth stretched over a longer period of time then maybe 15x EPS = $2.40?  Higher?

What if I told you the company was trading at $0.20 for a PE multiple of 1.25?  P/S = 0.13.  Cheap.

Hemacare's transformation

A better investor than I told me about this company.  Hemacare (HEMA) is a $3.5M market cap company that has transformed their business in the darkness, outside the view of Wall Street.  HEMA started life decades ago as a blood bank.  Realizing the limitations of that business, leadership started down a new path several years ago.  They have refocused the company and are experiencing strong growth in the bioresearch space.  They are valued as if they are dying and herein lies the opportunity.  The investment community does not know of their transformation...yet...

A conspiracy theory for GLGI and AB

Up front disclosure: While this post has some basis in fact, it is largely speculation

So here I am writing about GLGI again.  I told myself two posts was enough because I don't want to be the blogger who constantly writes about the same thing...but I just think about GLGI too much and what's more fun on a Friday afternoon than speculating about your stocks?  I have done a lot of sleuth work trying to figure out what is going on between GLGI and AB so at least this is an opportunity for me to organize it all in one place.

IEHC FY15 10-K update

IEHC filed their 10-k yesterday so I thought I'd put out a little update.  In short it was great and they are continuing down their path.  The record high backlog disclosed in Sept 2014 has increased even higher and earnings is at an all time high as well.  The most interesting thing, to me, is that they have granted some stock options.

Some highlights:

• Backlog at an all time high of $8.7M up 48% YOY
• EPS at an all time high of $0.79 up 25% YOY
• Trading at a P/E of 7.7
• Concentration on military continues to shrink

And lowlights:

• Despite record net income of $1.8M they actually ended the year with $12k less in the bank than last year

And items that could be interpreted good or bad:

• Inventory raw material is up 79% YOY to an all time high

The Growth of IEHC

IEH Corporation (IEHC) is a $14M market cap company that makes electrical connectors.  They have been written up a few times by OTC Adventures here and Whopper Investments here, here, and here.  Bull, Bear and Value has a number of posts here including a write up on his trip to the annual meeting.  I recommend you start by reading those posts and then I will just add a little bit on top.  Let's begin with a summary and some bullet points from these prior posts.

The company was founded by Louis Offerman in 1937 and is now run by Michael Offerman who owns 40% of the company.  The CEO's son, David Offerman, is VP of Sales and Marketing.

Why is TIK so cheap?

Tel-Instrument Electronics (TIK) is extremely undervalued based on the most recent quarter, pre-announced next quarter, and order backlog.  Let's take a deeper look to see if it's still cheap.

TIK is a high growth microcap company that designs and manufactures avionics test equipment.  Their largest customer is the US military, accounting for 89% of the most recent quarter's revenue.  TIK has three major programs:  CRAFT for the Navy, TS-4530A for the Army, and ITATS for the Navy.  The TS-4530A program is split up in two parts: SETS which are a complete new units and KITS which are an upgrade of an old unit.  The CRAFT project also has two parts: the 708 product and the 719 which is a subset.  I will let you visit the TIK website to learn more about these products but basically they are Mode 5 avionics test equipment.  Mode 5 is the latest standard that the US Military is migrating to as we speak; in the past there was Mode 1, 2, 3, etc.  TIK has only one competitor in the Mode 5 space, Aeroflex, but TIK has the upper hand since they have all the big U.S. government contracts.

NoName Annual Performance 2014-2015

I bought my first stock on Apr 18, 2013 so my fiscal year begins with that date.  I manage the retirement funds for myself and my wife which are being contributed to every month.  My benchmark is the S&P500 ETF SPY.

I have two goals:

1. Achieve an average annual return of 12% from now until retirement around 2037.  Annual return is defined by the geometric mean.
2. Beat the benchmark.

Insiders Can't Get Enough of Greystone Logistics (GLGI)

I posted a follow up GLGI article on Seeking Alpha in January 2015.

Greystone Logistics - GLGI - An Introduction

I posted this writeup first on the oldschoolvalue.com forum in July 2014
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Greystone Logistics (GLGI) is a highly levered nano cap company that recycles plastic and manufactures plastic pallets.  The company grinds up post-industrial and post-consumer plastic, combines that into their proprietary blend, and manufactures pallets. William Kruger was first named CEO in 2003 and he is intimately intertwined with everything.  There are many related party transactions involving Kruger and fellow board member Robert Rosene.  Rosene and Kruger have loaned money to the company, allowed the company to push back money repayments, personally guaranteed company loans, and used other companies they own to lease land and equipment to back to Greystone.  As of the latest 10-K, Kruger owns 30.6% of the common, Rosene owns 16.6%, and another board member Larry LeBarre owns 4.6%.