GEO Investing

We’d like to reiterate three high-conviction multibagger opportunities from our model portfolios, each with distinct potential for significant returns.

Our first pick is notable for its low price-to-earnings ratio and asset-light licensing model, with a dividend yield approaching 10%. This stock is currently undervalued by the market, which could change as the industry benefits from major government investments.

The second opportunity features a company in the midst of a turnaround, echoing the success story of Fitlife Brands. With a new CEO at the helm, the company aims to revive and expand its consumer brands through its established distribution network. This pick has already made strides by shifting focus to online sales, which now represent a substantial portion of total revenue.

Finally, we examine a smaller company with $100 million in revenue and a strong cash position. The management has ambitious sales and margin targets, which if met, could significantly exceed current analyst estimates and potentially re-rate the stock’s value.

We’ll keep it straight and to the point!

Recent model portfolio addition #1

  • P/E < 10x
  • Asset light licensing model
  • Dividend yield approaching 10%
  • Government about to pour billions of dollars into the industry
  • Investors hate the stock
  • Investors will love it once it’s not seen as a value trap & P/E re-rates to growth

Recent model portfolio addition #2

  • Turnaround story in progress that reminds us of the Fitlife Brands, Inc. (NASDAQ:FTLF) turnaround (up 590% since we identified that there was a turnaround in the making.)
  • The company reported revenues of close to $70 million before the founder stepped down in 2011.
  • Revenues are currently at around $10 million, but we believe the new CEO will be successful in reviving the company’s once popular legacy consumer brands, while launching new brands though its established distribution network.
  • Many investors are ignoring the stock, thinking it is too risky, but we think the turnaround is a layup.
  • Improved the balance sheet by selling an asset to pay off all the debt that was threatening bankruptcy.
  • New online sales push to boost sales, now represents more than 50% of sales, compared to basically nothing 18 months ago.
  • Management expects profitability in 2024; We agree.

Existing Model Portfolio Holding

An #InfoArb Pitch on a profitable microcap with $100M in revenue & lots of cash

  • Management has set sales and margins targets.
  • Analyst grossly underestimate those targets.
  • If targets are met, the company could do in excess of $2.50 in EPS vs. estimates of ~$1.50.
  • Shares should trade at a price to earnings ratio of 25+, offering 200%+ upside.

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