Back in 2013, when we more regularly submitted publicly available content to Seeking Alpha, we wrote about a little-known and under-followed gem of a micro-cap stock, GTT Communications Inc. (NYSE:GTT) that provided some of the best stock returns to date. Part of our mantra was and still is to provide investors with quality ideas. This is the research the GeoTeam uses everyday as we strive to transform our portfolios to new heights. When we disclosed our long position in GTT to our portal members on July 31, 2013, nearly 2 months prior to the article’s publication on Seeking Alpha, it was trading at $4.25 per share. The column Global Telecom: Near-Term Catalysts Should Close Relative Valuation Gap received accolades from the Seeking Alpha editorial team and ultimately won a performance award a year later.
I hope all is well. I’m writing because we’d like to select your article on GTT from September 2013 for our Outstanding Performance awards program. This would mean a [monetary] award. Congratulations! Thanks for all your work, we enjoy sharing your ideas on Seeking Alpha and hope to read more of your work in the near future. Best, Seeking Alpha
While we were certainly proud of and pleased with the award, those feelings were dwarfed by the knowledge that we were able to help our GeoInvesting subscribers gain an edge by learning about how a stock like this could outperform the market with superior stock returns.
GTT CASE STUDY – Superior Stock Returns
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Common Equity |
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Cloud NetWork; Connectivity Solutions |
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Achieve profitability; Closing of pending acquisition; Uplist to major exchange; Fill valuation gap vs. comps |
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At time of report – $96 Million; Today – ~800 Million |
In a nutshell, we covered GTT because we did not think investors understood how much value that a new management team and a pending acquisition would bring to the company. We also believed that investors needed to look past the losses the company was reporting at the time, since GTT’s business model centered on…
- high recurring revenues
- “sticky” customer relationships
- filling a void across domestic and global cloud networks
…arguing that the stock was severely undervalued when compared to its closest publicly trades comps.
We ended up selling the stock at near $13 per share on September 9, 2014 for stock returns of 200% as the stock neared our original price target of $13.50. The stock’s performance is rewarding longer term investors even more.
Providing investors with educational ammunition is a top priority of mine. As part of my goal to become a better stock picker I strive to learn from my successes and failures. So, I will be writing you from time to time to highlight case studies like the one above. Maybe this will help you sharpen your stock picking skills, if that is something you are looking for. Maybe you are an already advanced investor who likes in-depth idea flow.
You may even think you’ll outgrow the need for services like ours if you become happy with where you’re at as a part time or full time investor.
Now I know this sounds contrarian from the perspective of a stock research portal like GeoInvesting that makes money from subscriptions, but there is always opportunity to learn more. I am banking on the fact that you will soon find that GeoInvesting can add value to your investment experience, and at the very least provide you with the tools to save you time in your own research process.