GEO Investing

Richardson Electronics, Ltd. (NASDAQ:RELL) reported huge earnings results April 6, 2022 after the market closed, marking its seventh consecutive quarter of sequential growth. Yet, the stock finished today’s trading session in negative territory. The current market continues to be perplexing where good news is not rewarded and sometimes even punished for no real reason.

It’s times like this that we like to take advantage of market insecurity and ignorance. We think RELL is a long-term multi bagger that is giving us a gift opportunity at current undervalued price levels.

If you followed our past journey you’re probably familiar with all the on the ground due diligence we performed to uncover countless amounts of fraudulent US listed China companies. It was a step in our research process that we had to take because of a high risk of fraud in the space.

To be honest, throughout my 30-year investing career, I really hadn’t felt the need r conduct enormous amounts of on the ground due diligence when confirming a bullish case. Dissecting U.S. SEC financial documents along with other public information is usually good enough to get a good read on a company.

Furthermore, I really learned how to interview US management teams and hone that skill overtime, even if just over a phone call. Unfortunately, doing the same with China-based companies that routinely lie on their documents filed with SEC could easily steer you in the wrong direction.

How we approached China research actually opened a new realm of on the ground due diligence possibilities on high conviction names on which I was bullish. We realized learning about the good and the bad was not all that different. You observe, take notes, talk to people, take pictures and video, and summarize your findings.

The last time we did that with a company we were bullish on, the stock went from $3 to $45 at its peak.

Now we’re doing it again with one of our highest conviction names, Richardson Electronics, Ltd. (NASDAQ:RELL). The company manufactures microwave tubes and ultracapacitors. RELL also manufactures semiconductors and components for other technology companies as well as for its own product lines.

We are most excited about its ultracapacitor line that targets power management solutions for its customers. These products are used for companies in all types of high growth industries such as wind power, locomotives, cell towers, and lab grown diamonds. It’s a really new category for the company, building on its rich history of providing custom engineering solutions for its customers in prior years.

RELL needed a way to break out of the boring, lackluster growth markets it had been targeting. As a result, the company is retooling its products to enter these high growth markets and we think they are just at the beginning of this phase. So, last week we visited the company’s main facility in Chicago and gathered several video clips to help us understand the breadth and purpose  of RELL’s products and services.

The company has a strong reputation, and we wanted to get an explanation on what some of the companies’ products do from people and employees on the ground – the people that are actually manufacturing and designing these products.

For example, here’s a complimentary clip on a few aspects of the wind power service component of RELL’s business and the clear advantage ultracapacitor solutions have over environmentally unfriendly lead acid battery competitors.

More video clips are on the way, so if you are not a premium member yet, make sure you hop into a trial GeoInvesting Subscription to see the full scope of our site visit to RELL’s facility in Chicago.

Besides all of the on-the-ground due diligence clips on RELL, you will get:

  1. A Fireside Chat we had with RELL management
  2. Our RELL research article focused around our initial coverage on the company
  3. A premium invite and access to a live special management executive update call we’re having on 4/14/2022.

With a Subscription, you will also receive full access to our entire research service platform which includes, but is not limited to….

  • Access to our entire catalog of microcap stock coverage, spanning 14 years.
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