Lawrence Kudlow to Become Trump’s White House Economic Adviser
Robert Maltbie & Singular Research for appointment to Trump team. Watch “Larry Kudlow interview Sept 22, 2016 : “How to Grow Again” on YouTube.
Singular Research Director’s Letter : February 2018
After a near two year hiatus, with the VIX trending at the historical low end of 11-14 bp level, volatility exploded after an employment report showed higher than expected wage growth, pointing to higher interest rates. All the leveraged short vol funds took a huge hit that send shock waves into the broader equity market, creating the first 10% sell-off since early 2016. Better than expected earnings and upward revisions and positive economic news led the markets to recoup to only a 3-4% down draw for February.
February’s top performers combined good eps reports with lower valuations to buck the stiff sell–off. Our top performer was NMI Holdings, Inc.( NMIH) + 8.17%, a mortgage insurer riding the housing recovery. Hennessy Advisors Inc. (HNNA) +4.36%, an undervalued micro-cap posted good earning while our analyst increased his price target . New York Times Co. ( NYT), a short call went against the grain, posing an earnings beat extending the Trump Bump to readership growth.
The worst performers list had some large down draws. Led by Huttig Building Products, Inc. (HBP) -27 %, this suffered from an unexpected departure of its CFO. Next in line was Anika Therapeutics Inc. (ANIK), -22%, hit by tepid guidance and the retirement of its CEO and founder. Finally, dropping over 17%, A-Mark Precious Metals, Inc. (AMRK) missed estimates due to the low volatility in metals, combined with higher than expected acquisition costs.
We are excited to announce new coverage on LSI Industries Inc. (LYTS), a designer of LED indoor and outdoor lighting systems servings retail and industrial sectors. LYTS posted a better than expected quarter last month, led by a new management team and new product offerings. Also, we launched coverage on Full House Resorts Inc. (FLL), a micro-cap Hotel and Casino resort operator that trades at a significant discount to its peers and is also in the process of a major turnaround. At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage to add alpha for our active institutional following. We thank our clients for your support of independent equity research.
Singular Research Director’s Letter : January 2018
Out of the Box Hot!
As the adage goes, as goes January as will be the year. Thus, we remain encouraged, hoping earnings can continue to lift already lofty valuations. Indeed, aided by lowered corporate tax rates and lessened regulatory burdens, we have much too support encouraged animal spirits. Still, we suggest selectivity and valuation vigilance as the FED is looking to renormalize the rate environment with the hint of perhaps, several hikes in 2018, suggesting a possible push-pull between higher rates vs. higher earnings.
Meanwhile, small caps continue to lag as investors still favor large cap and accompanying ETF’s extending last year’s leadership forward into 2018 thus far.
For the top performing companies in January on the Singular Research coverage list, a common theme was biotech, led by HBIO, ANIK & IGXT. Harvard Bioscience (HBIO) announced a major acquisition that should lift growth prospects and margins while shedding a low margin, underperforming division. Whereas Anika Pharmaceuticals, lacking an apparent fundamental catalyst, seems to have benefited from a rebound in the Biotech sector spurred by investor allocation to ETF’s. Transcat, (TRNS), got a nice boost from beating estimates from the 2 analysts (including Singular) that follow it.
The worst performing stock on the Singular coverage list during January was by our wrongheaded short call on New York Times, (NYT), which continues to delight with its digit revenue growth results spurred by a long-lived Trump bump. Clear One (CLRO) endured profit taking reaction from a 25% up move in December. It remains an attractive long-term value still trading around book value. Arlington Asset Investment Corp. (AI), surprised the street with better than forecast results and rebounded from an oversold condition that took it below NAV to a 5 year low.
We continue to work on new ideas and plan to launch coverage in the coming weeks on one or several new names. At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We thank our clients for your support of independent equity research.
Singular Research Director’s Letter December 2017:
A solid year for large caps small caps continue to lag.
The Singular Research coverage list out performed up 1.64% in the month of December. Still, this was not enough to catch up to the strong outperformance again registered by large caps. With growth lead value by a stunning 13% in most asset classes. The Singular list was up 7.3% trailing the Russell in S&P due to its micro-cap value Focus.
SINGULAR MONTHLY PERFORMANCE STATISTICS
Trailing 12 Mo’s
The silver lining for micro and small caps may have been the Trump Administration and Congress’s passage of the tax cut package which should benefit small caps on the margin more than big caps providing a basis for outperformance in 2018.
The Singular Research list was led by Clear One (CLRO) up 26.9% in December. After falling to book value from a very oversold condition CLRO benefited in anticipation of patent awards for its video and audio technology. Gray Television (GTN) bounced 16.3% up from its large secondary stock offering that was used to pay down debt. Stamps.com (STMP) rose 11.6% in anticipation of a strong Christmas selling season.
Laggards were led by Biolase (BIOL), down 14%, which may be due to heavy tax loss selling as the stock has underperformed in 2017. Control 4(CTRL). was down 10.5%, likely some profit-taking consolidating a more than 200% move up from early February this year.
WORST PERFORMERS FOR THE MONTH
WORST PERFORMERS FOR THE MONTH
Thank you for your continued confidence and support as we will continue to seek to uncover the forgotten, the forlorn and the misunderstood in 2018. Hail to Alpha.
Video: Singular on Seeking Alpha : STAMPS.COM
Video: Singular on Seeking Alpha : STAMPS.COM
Putting a Stamp on E-Commerce
Seeking Alpha Author Robert Maltbie joins Cheddar to discuss his “buy” rating on Stamps.com. Projections for an above-average Christmas shopping season and e-commerce participation benefitted this company immensely. Maltbie puts a $250 price target on the company.
Seeking Alpha Author Robert Maltbie joins Cheddar to discuss his "buy" rating on Stamps.com. Projections for an above-average Christmas shopping season and e-commerce participation benefitted this company immensely. Maltbie puts a $250 price target on the company.
Stamps.com's strategy to emphasize marketing initiatives this year boosted results well above Maltbie's prior expectations. Last quarter, revenue was $116.1 million, up 38% compared to a year ago 2016. Mailing and shipping revenue was $111.8 million, up 37% year-over-year.
Maltbie talks about Stamps.com's partnerships with Amazon Marketplace and USPS. He discusses some challenges for the company and what his expectations are for 2018.
Singular Research Winter Webcall Growth Leaders 2017
Join us for a webinar on Dec 14, 2017 at 8:30 AM PST
Please register for Singular Research Winter Webcall Growth Leaders on Dec 14, 2017 8:30 AM PST at:
The small and micro-cap sectors of the equity markets have been on a tear since the mid-August lows. We perceive that is partly due to the YTD underperformance of the small and micro cap sectors, but a huge boost occurred in September which we anticipate has some long legs, its tax reform. Lower corporate taxes is beneficial to investors, but in the current environment when small caps have underperformed and considering the domestic focus of small and micro cap companies, it is no wonder that this group will be supported by any positive news on domestic tax reform. Our contrarian indicators support the continuation of the latest rally. Short selling is at its highest level since before the 2016 election, and individual bullishness is below average.
For the top performing companies in September on the Singular Research coverage list, most reported strong fundamental performance in Q2, along with positive outlooks. Arotech Corp. (ARTX) was the top performer in September. The company provides engineering and security solutions to government agencies, municipalities and commercial organizations. The company recently received a new contract from the Army National Guard. Harvard Biosciences (HBIO) makes scientific equipment and consumables that are used by researchers worldwide. The company is benefiting by growth in China, increased spending from the National Institute of Health (NIH). The company is benefiting from the expanding gene editing market. Century Casinos (CNTY) has casino operations in a diverse set of venues including cruise ships and horse racing. The company beat earnings estimates in Q2. Control4 Corp (CTRL) provides smart home and business solutions that integrate audio, video, lighting, temperature, security, and communications. The company was a recent new initiation and has consistently been beating estimates. Biolase (BIOL) makes laser dental products that are very patient friendly and recently introduced two new products in Q1. Sales of new products are ramping up slowly and the is rebounding after recent underperformance.
The worst performing group of the Singular Research coverage list during September include several companies that reported lower than expected Q2 results. The worst performing stock of the coverage list was IntelGenx Technologies (IGTX) focuses on novel drug delivery systems. Although the company missed our analysts’ expectations for Q2, there are several promising items in the near term pipeline. The New Your Times (NYT) underperformed as a short. The company had a stronger than expected Q2. Vasco Data Security (VDSI) makes hardware and software security products. Revenues declined in Q2 as expected, but our analyst expects revenue growth to resume in Q3 driven by software and service-centric offerings. A-Mark Precious Metals (AMRK) is a full-service precious metals trading company. Q4 performance (June 2017) was below expectations but our analyst notes management’s focus on expanding the high margin revenue streams in logistics, storage, financing, and minting. Acme United (ACU) reported lower than expected revenue and EPS in Q2, but management cites a shift of Q2 revenue into the second half and maintained its earlier annual guidance.
We continue to work on new ideas in the small and micro cap space. At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We thank our clients for your support of independent equity research
Seeking Alpha author Robert Maltbie joins Cheddar to discuss how “micro-cap” companies benefit from Trump’s new tax proposal. He thinks the policy has a better chance of passing than healthcare reform, because Trump is desperate for a win. Plus, he talks about the risk of investing in small-caps, as well as the companies best to invest in right now.