Three Uncovered Stocks From the Chart Room

 

SingularLogo

 

In this analysis, we have identified three uncovered stocks that we believe are attractive based first upon our technical analysis.  We then analyze each company’s fundamentals and examine whether the company is truly one with a potential upside.  We use group comparable and industry projected EPS growth rates and apply a relatively higher than average discount rate to adjust for higher risks of micro-cap, less liquid stocks

.

LGL GROUP INC (LGL)   Current Price: $14.76 (1/21/20)   Price Target: $18.40

The LGL Group, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of frequency and spectrum control products in the United States and internationally. The company operates in two segments, Electronic Components and Electronic Instruments. The Electronic Components segment offers XTAL, clock oscillators, VCXO, TCXO OCXO, and DOCXO devices; and radio frequency, microwave and millimeter wave filters, diplexers, and solid-state power amplifiers. It also provides filter devices, which includes crystal, ceramic, LC, tubular, combline, cavity, interdigital, and metal insert waveguide, as well as digital, analog and mechanical tunable filters, switched filter arrays, and RF subsystems. This segment's products are used in infrastructure equipment for the telecommunications and network equipment industries; and electronic systems for applications in defense, aerospace, earth-orbiting satellites, down-hole drilling, medical devices, instrumentation, industrial devices, and global positioning systems

lgl group inc 012020

 

PURE CYCLE CORP (PCYO)   Current Price: $12.65 (1/21/20)   Price Target: $13.45

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development Activities. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of master planned mixed-use community; and oil and gas leasing business.

pure cycle corp 012020

 

MRI INTERVENTIONS, INC (MRIC)   Current Price: $5.27 (1/21/20)   Price Target: N/A

MRI Interventions, Inc. operates as a medical device company primarily in the United States. The company develops and commercializes platforms for performing minimally invasive surgical procedures in the brain and heart under direct, intra-procedural magnetic resonance imaging (MRI) guidance. It offers ClearPoint system, a neuro-navigation system designed for placing catheters, electrodes, and laser fibers to treat various neurological diseases and conditions, as well as for performing biopsies.

mric 012020

Singular Research Staff
This email address is being protected from spambots. You need JavaScript enabled to view it.
818-222-6234

Singular Research Director’s Letter: January performance 2020

SingularLogo

Singular Research’s January 2020 Director’s Letter

 

In January, markets went lower as there were many troubling headline stories. Trump impeachment talks carried on throughout the month with a near end in sight favoring a Trump acquittal. Threats of war with Iran heightened and quickly eased as a drone strike killed General Soleimani. And lastly, the introduction of the Corona virus ended the month with a threat to bring major economic turmoil to China and the rest of the world. Domestically, the January Purchasing Managers Index (PMI®) registered 50.9 percent, an increase of 3.1 percentage points from the December reading of 47.8 percent. The PMI® returned to expansion territory for the first time since July 2019. Similarly, the Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.8 percent in January to 112.1 (2016 = 100), following a 0.3 percent decline in December and a 0.1 percent increase in November. The unemployment rate increased fractionally to 3.6% (3.5% in December), one of the lowest rates since December 1969.

 

singular monthly performance jan 2020

 

For the month of January, the Singular coverage list underperformed the S&P 500 by 253 basis points and outperformed the Russell 2000 by 57 basis points, respectively. For 2019, the Singular coverage list outperformed the S&P 500 and the Russell 2000 by 904 and 1,367 basis points, respectively. As the U.S./China trade war shows positive signs combined with better than expected earnings results from domestic corporations, investors may be favorably looking to 2020’s growth prospects. For January, growth stocks returned 4.8% more than value stocks.

 

singular top 5 performers for jan 2020

 

BYND was our top performer in January after the company became the top candidate to supply plant-based burgers to McDonald’s. Growth prospects for BYND remain strong as more and more restaurants and fast food chains adopt plant-based meat. Investors cheered NVEE for their acquisition of Quantum Spatial. RUBI also had a good month as the company announced the acquisition of Telaria which would create the world’s largest independent, sell-side advertising platform.

 

singular worst 5 performers jan 2020

 

HSC was our worst performer for the month as the company announced weaker than expected preliminary fourth quarter guidance. The stock has been hit hard in the past couple months as investors remain cautious over the company’s transition from Industrial to Clean Earth. ANIK had a rough month as investors were not thrilled of the company’s acquisitions of Parcus Medical and Athrosurface. In late January, the company’s President and CEO, Joseph Darling, passed away. Investors have remained cautious of growth and profitability at GEOS as a result of the recent decline in the price of oil (lowest level since December 2018).

 

singular jan 2020 new initiation

 

For January, we initiated coverage on Beyond Meat, Inc (BYND). Beyond Meat is a producer of plant-based meat products that enable consumers to experience the taste, texture, and other sensory attributes of animal-based meats. As plant-based meat becomes mainstream in society, we believe BYND has the growth capacity and research capabilities to become the industry market leader. We wish to thank our clients for their support and belief in our process. To learn more about Singular Research and register for a 14-day trial offer, please follow the link below.

 

14-Day Trial Offer

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Singular Research Director’s Letter: December performance 2019

SingularLogo

Singular Research’s December 2019 Director’s Letter

 

In December, markets trended higher as the first phase of a trade deal between the U.S. and China was reached.  Similarly, the Fed has opted out of an interest rate cutting stance, as they believe the U.S. economy is resilient and sound.  However, investors remain cautious as manufacturing data and business confidence indicators say otherwise.  The December Purchasing Managers Index (PMI) registered 47.2 percent, a decrease of 0.9 percentage points from the November reading of 48.1 percent.  This reading is the lowest PMI reading since June 2009 when the index was at 46.3 percent. Similarly, the Conference Board Leading Economic Index® (LEI) for the U.S. was unchanged in November at 111.6 (2016 = 100) following a 0.2 percent decline in both September and October.  On a positive note, the unemployment rate remained stable at 3.5%, one of the lowest rates since December 1969.

 

singular dec 2019 monthly performance

 

For the month of December, the Singular coverage list underperformed the S&P 500 and Russell 2000 by 250 and 235 basis points, respectively.  For 2019, the Singular coverage list has outperformed the S&P 500 and the Russell 2000 by 904 and 1,367 basis points, respectively.  As the U.S./China trade war shows positive signs combined with better than expected earnings results from domestic corporations, investors may be favorably looking to 2020’s growth prospects.

 top 5 performers dec 2019

 

GEOS was our top performer in December after the company reported fiscal Q4 revenue growth of approximately 40%.  The company appears to be on track for a strong recovery in 2020 as demand for their rental equipment increases.   ALG, ACU, and ZEUS were all strong performers for the month as easing trade talks with China have provided revenue clarity and relief for investors.

 worst 5 performers dec 2019

 

ROKU was our worst performer for the month after the CFO, Steve Louden, stepped down.  Investors remain cautious of ROKU’s growth prospects amidst weakening gross margins and increased competition.  We believe the company still has a first mover advantage and will continue to surprise investors to the upside in 2020.  HNNA reported a weak fiscal year-end with adjusted revenue and net income for 2019 decreasing 21.8 and 33.6 percent from the prior year.  The company is navigating through industry headwinds and has done so while increasing their dividend and repurchasing six percent of their total outstanding shares.  Lastly, AMRK decreased roughly 13 percent as a result of a mutual fund selling approximately 200,000 shares.  Because of this sale, we believe AMRK’s stock price is undervalued and does not truly represent the operational improvements underway at this time.      

 

dec 2019 new initiations

 

For December, we initiated coverage on Comtech Telecommunications Corporation (CMTL).  Comtech Telecommunications is a leading provider of secure wireless communications systems for both commercial and government customers worldwide. The products include satellite earth station modems, troposcatter systems, and wireless 911 systems.  The company is looking to take advantage of the transition to 5G and has made several 2019 acquisitions that have positioned the company for strong growth in 2020 as a market leader.  We wish to thank our clients for their support and belief in our process.  To learn more about Singular Research and register for a 14-day trial offer, please follow the link below.  

14-Day Trial Offer

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Free subscription offer

Singular Research New Initiations Composite Up 46% in 2019

SingularLogo

Singular Research New Initiations Composite Up 46% in 2019

 

Our New Initiations 2019 composite average is up 46% through 12/10/19, outperforming the Renaissance Capital IPO, LD Micro, Russell Micro-Cap, Russell 2000, and S&P 500 indices YTD.  Our 2019 New Initiation’s composite constituents and their respective performance since their 2019 initiations are listed below.  New subscribers will receive immediate access to all new upcoming initiations.  

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

singular new initiations 2019

 

Top 3 Performers

                For 2019, our new initiations composite was led by ROKU (+264%), LUNA (+90%), and GDNP.V (+62%).  ROKU, the leader and first mover in the growing consumer transition from traditional cable television to streaming television over the internet, experienced exponential growth as active accounts, total streaming hours, and average revenue per user grew 36, 68, and 30% YoY, respectively.  LUNA completed the accretive acquisitions and integrations of General Photonics and Micron Optics and reported their 8th consecutive quarter of double-digit revenue growth.  Our November initiation of GDNP.V had YoY revenue growth of 217% in the third quarter of 2019. 

 

Bottom 3 Performers

                Our worst three initiations for the year were GSKY (-56%), FSTR (-17%), and FND (+1%).  In the second quarter, GSKY, a point-of-sale lender, reported they would be seeking strategic alternatives and suspended their guidance.  As a result, we became less confident in their business and dropped coverage due to a lack of visibility.  FSTR, a leading manufacturer and distributor of products and services for transportation and energy infrastructure, has shown signs of weakness from the upstream market in their Tubular segment.  This weakness has further been enhanced from a timing of revenue order recognition which has made their revenue appear weaker than normal.  We believe FSTR’s management can overcome these issues and have a 34% upside on the stock.   And, lastly, our short position on FND, a multi-channel specialty retailer, has not worked in our favor and the stock has mostly traded sideways since our initiation in April.    

 

Most Recent Initiation

            On December 17, we initiated coverage on Comtech Telecommunications Corporation (CMTL) with a Buy rating.  CMTL should benefit from a favorable business environment for advanced communications, strong order backlog, and exposure to large, growing markets.  Fiscal 2020 is expected to be the fifth consecutive year of increased revenue and the fourth consecutive year of increased adjusted EBITDA.  We have a $43.50 price target on the stock which is a 20% upside from current levels.

We hope you have a great holiday season.  For more information on our new initiations and to subscribe, please email This email address is being protected from spambots. You need JavaScript enabled to view it. or call us at 818-222-6234.

 

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Free subscription offer

"Best of the Uncovered" Conference in San Francisco: Booklet

Undercovered Gems Headline the Singular Research’s “Best of the Uncovered” Conference in San Francisco on 12/12

SingularLogo

Undercovered Gems Headline the Singular Research’s “Best of the Uncovered” Conference in San Francisco on 12/12

 

At Singular Research, we focus on small and micro-cap stocks that are undercovered on Wall Street.  These stocks have a niche business model and have yet to be widely discovered.  Many of the global threats in the stock market today do not affect these stocks.  Our small-cap investor conference in San Francisco will focus on top ranked emerging growth, undervalued, and undercovered companies that exemplify our research and provide exciting alpha opportunities.  Please see below for our conference presenters, the schedule of presentations, the venue, and a brief description with valuation metrics on the companies that are presenting.  

towr img 1

 

Acme United Corp. (ACU)

$24.00 Price Target, Buy, Current Price: $21.64 (12/4/19)

Acme United Corporation is one of the largest worldwide suppliers of innovative cutting devices, measuring instruments and safety products for the school, home, office and industrial markets. The company has facilities in the U.S., Canada, England, Germany, Hong Kong and China. Acme sells its products in countries. It had 421 employees at the end of 2017.

acme

 

 Amazing Energy Oil & Gas Corp. (AMAZ)

N/A Price Target, Buy, Current Price: $0.15 (12/4/19)

Amazing Energy Oil and Gas, Co., together with its subsidiaries, engages in the exploration, development, and production of oil and gas in the United States. As of July 31, 2019, the company had leasehold rights to approximately 70,000 acres in Pecos County, Texas, and 5,385 acres in Lea County, New Mexico with estimated net proved reserves of 499,666 barrels of oil equivalent. It also owned 26 oil and gas wells in the Permian Basin and 7 oil wells in Lea County, New Mexico. In addition, the company provides oilfield services to oil and gas well owners. Amazing Energy Oil and Gas, Co. is headquartered in Plano, Texas.

sf conference 4

 

Comtech Telecommunications Corp. (CMTL)

N/A Price Target, No Rating, Current Price: $36.50 (12/4/19) 

Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions in the United States and internationally. The company operates through Commercial Solutions and Government Solutions segments. Comtech Telecommunications Corp. was founded in 1967 and is headquartered in Melville, New York.

sf conference 5

 

 EVIO Inc. (EVIO)

N/A Price Target, No Rating, Current Price: $0.11 (12/4/19)

EVIO Labs is the nation's leading provider of accredited analytical testing, scientific research and advisory services to the regulated cannabis industry. EVIO Labs provides state-mandated ancillary services that are required to ensure the safety and quality of the nation's cannabis supply.

sf conference 6

 

Good Natured Products (GDNP.V)

$0.20 Price Target, Buy, Current Price: $0.16 (12/4/19)

Good Natured Products Inc., formerly Solegear, is an award-winning, publicly traded bioplastics company founded in 2006 and based in Vancouver, British Columbia, Canada. Good Natured is an innovator in the field of next generation bioplastics made from annually renewable plant-based sources.

sf conference 7

 

IEC Electronics Corp. (IEC)

$9.50 Price Target, Buy, Current Price: $8.25 (12/4/19)

IEC Electronics is a provider of electronic manufacturing services to advanced technology companies that produce lifesaving and mission critical products in the medical, industrial, aerospace, and defense sectors.

sf conference 8

 

L.B. Foster Co. (FSTR)

$26.50 Price Target, Buy, Current Price: $19.02 (12/4/19)

L.B. Foster Co. engages in the manufacture, fabrication, and distribution of products and services for the transportation and energy infrastructure. The company operates through the following segments: Rail Products and Services; Construction Products; and Tubular and Energy Services.

sf conference 9

 

Olympic Steel, Inc. (ZEUS)

$18.00 Price Target, Buy, Current Price: $17.40 (12/4/19)

Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin, pipe and tubular products.

sfconference 10

 

Salem Media Group, Inc. (SALM)

$4.00 Price Target, Buy, Current Price: $1.47 (12/4/19)

Salem Media Group is America’s leading Christian and conservative multi-media company. The Company operates through Radio Broadcast, Digital Media and Publishing segments. It owns and operates 116 radio stations, many in the top 25 media markets, and produces several of the largest nationally syndicated radio shows on the air today.

sfconference 11

 

Seabridge Gold, Inc. (SA)

$17.50 Price Target, Buy-Long Term, Current Price: $13.13 (12/4/19)

Seabridge Gold (SA) is a development stage company engaged in the acquisition and exploration of gold properties located in North America. 

sf conference 12

 

Transcat, Inc. (TRNS)

Price Target Under Analysis, Buy, Current Price: $32.60 (12/4/19)

 Transcat, Inc. (TRNS) is a leading provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement, and control instrumentation to highly regulated industries.

sf conference 13

 

To register for the webinar of our San Francisco conference on December 12, please follow the link below.

https://register.gotowebinar.com/register/3165675798756851981

 

For a complimentary research report on any of these companies mentioned, please e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or call 818-222-6234

 

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Free subscription offer

Singular Research Director’s Letter: November performance 2019

SingularLogo

Singular Research’s November 2019 Director’s Letter

 

With signs of optimism that a deal with China can be reached in December, investors have become cautiously optimistic on the economy. Liquidity indicators point to a bullish rebound as there was an increase in large mega mergers and all-cash buyouts (Luis Vuitton & Tiffany’s and Novartis & Medicines). However, investors remain cautious as the November Purchasing Managers Index (PMI) registered 48.1 percent, a decrease of 0.2 percentage points from the October reading of 48.3 percent. Similarly, the Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.1 percent in October to 111.7 (2016 = 100), following a 0.2 percent decline in both September and August, and a 0.4 percent increase in July. On a positive note, the unemployment rate remained stable at 3.5%, one of the lowest rates since December 1969.

 

november 2019 monthly performance

 

For the month of November, the Singular coverage list underperformed the S&P 500 and Russell 2000 by 27 and 84 basis points, respectively. Year-to-date, the Singular coverage list has outperformed the S&P 500 and the Russell 2000 by 1,210 and 1,643 basis points, respectively. As the trade war with China continues and European markets falter, there appears to be an apparent shift to domestic small cap stocks that are not affected by international affairs.

 

top 5 performers nov 2019

 

EHTH, IEC, and LUNA all performed well as investors were thrilled from continued growth stories. IEC continues to grow revenue backlog while their quarter-ending revenue grew 28% YoY and gross margin expanded 150 basis points. QNST reported record sales and they are in the process of looking for strategic alternatives. LUNA reported 72% revenue growth YoY, its 8th consecutive doubledigit quarter of revenue growth.

 

worst 5 nov 2019

 

NVEE took the largest hit for the month with a 34% decline.  The company posted better than expected revenue (+25%) and backlog (+35%) growth.  However, from the acquisition of seven companies in 2019 and the costs associated with their integration, NVEE guided for lower revenue results for the full year of 2019.  The company remains on track for higher revenue and EPS estimates for 2020.  ANIK and IRMD both posted solid earnings results and guided higher, but investors may have been anticipating even stronger results which has led to their stock price declines.  DAKT reported flat quarterly revenue growth with a decline in operating income of $5 million, mainly due to increased prices from China trade war tariffs.  To strengthen results, they are looking at ways to improve operations and cut ties with China.      

 

november 2019 new initiations 

For November, we initiated coverage on Good Natured Products, Inc. (GDNP.V).  Good Natured Products designs, produces and sells plant-based packaging for baked goods, prepared meals and fresh produce, and “green” home and business products like recycling bins and totes.  The company is targeting for annual sales growth of 30-50% over the next three to five years.  We wish to thank our clients for their support and belief in our process.  For a complimentary report for new subscribers, to provide feedback, or to share some valued insights, please e-mail me using the link below.  

 

This email address is being protected from spambots. You need JavaScript enabled to view it.

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Free subscription offer

FOMO time we project S&P 500 target 4000 before end of Bull Market

SingularLogo

FOMO time we project S&P 500 target 4000 before end of Bull Market

 

Powered by better-than-expected earnings, stronger than expected retail sales and progress on the trade front with China, the major market indices marched still higher, again this week. 

 Nearly a trillion dollars has matriculated into Bond and money market funds this year.

 Fomo (fear of missing out) may now be creating a reversal of some of this run for safety. 

 Based on current interest rates our model points to S&P 500  fair value of 4000 powered by expanding PE multiples and 9 to 10% earnings growth in 20 20 

Our top performers of the week were Roku (ROKU) up over 20 points as we upgraded our Target to $155 which ROKU hit immediately, rebounding strongly from last week's sell-off. NMI Holdings Inc. (NMIH) has traded nearly 10% higher posting better-than-expected earnings riding the wave of continued strength in the housing market. 

 Still, Micro caps remain undervalued at a 30% discount to big caps. We expect this undervaluation to close significantly over the next 6 months as investors fearful of investing in overvalued large-cap growth stocks, seek out the value in micro and small-cap stocks.

 

roku 

 

Free subscription offer   

 

Thank You

Robert Maltbie, CFA
Singular Research, President
818-222-6234(office)
This email address is being protected from spambots. You need JavaScript enabled to view it.

Free subscription offer