GeoInvesting January 2018 Highlights

What We’re Tracking

Stocks we monitor very closely

In late 2016, after pointing out some stocks that could benefit from the Trump administration’s focus on the safety of The United States border, we published a Border Security Screen for the purpose keeping those stocks on our radar in case we came across substantive updates on any one of them. Because we also closely track the Department of Defense website for contracts that might positively affect any companies in our universe, we thought it appropriate to show how some of the more mainstream defense stocks could serve as great examples of how investors might be able to develop a strategy surrounding the border security theme.

Since we have a rather solid database of research, we began to cross reference some of the stocks on our new Border Security screen with those in our past coverage.  One in particular, which we first identified back in 2009, caught our eye again. Back then, it struck us as a potential turnaround play, but went largely dormant…until now.

In August of 2017, when we once again started to take a more serious look at it, we updated our members that further diligence on the stock was warranted, given some new information as well as fresh contracts trickling into the company’s pipeline.  Since then, even more illuminating information has come to light, prompting us to take a position.  Our last article update was released on February 6, 2018.

After an initial strong move since the re-initiation of our coverage, we still believe that shares have multi-bagger potential should the company be able to successfully follow through on its contracts.  This is a potentially great turnaround that may see its best days ahead of it.  Consequently, we have also included the stock in our Multi-bagger Portfolio.

To read our new coverage, complete with our reasons for optimism as well as execution risks associated with this stock’s comeback, please consider taking a 7-day test drive of GeoInvesting.

Learn With Us

Education to help you become a better investor

“Behavioral finance is central to value investing,” is a quote by Jim Kelly, director of the Gabelli Center for Global Security Analysis at Fordham University, leading up to a presentation given by Professor Andrew W. Lo on January 24, 2018 at the Museum of American Finance.

The Gabelli Center for Global Security Analysis at Fordham University was established in 2013 to support and promote investment analysis in the tradition of Graham, Dodd, Murray and Greenwald. The center offers a variety of programs and events designed to promote collaboration among its constituencies and to foster dialogue between the academic community and practitioners.

I recently came across this video on YouTube, highlighting Professor’s Lo’s presentation titled: “Adaptive Markets: Financial Evolution at the Speed of Thought.”  If you have ever let emotion impact or threaten your investment decisions, or have an opinion on the Efficient Market Hypothesis, I think you will find this video enlightening.

Andrew W. Lo is the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management and director of the MIT Laboratory for Financial Engineering. He has published numerous articles in finance and economics journals, and has authored several books including:

  • Adaptive Markets: Financial Evolution at the Speed of Thought
  • The Econometrics of Financial Markets
  • A Non-Random Walk Down Wall Street
  • Hedge Funds: An Analytic Perspective and The Evolution of Technical Analysis.

His awards include the Alfred P. Sloan Foundation Fellowship, the Paul A. Samuelson Award, the American Association for Individual Investors Award, the Graham and Dodd Award and numerous other awards and honors

I am working on a follow up that takes a deeper dive into Professor’s Lo presentation and my take on how it can be applied to the current state of the microcap universe.

~ Maj Soueidan

Studs & Duds

The reality of investing – Our best and worst picks

Stud: ATGN

Altigen Communications (OOTC:ATGN) (a long time GeoInvesting Holding since 2015), a SaaS/Cloud phone management/call center solutions provider, was added to Maj’s favorite stock list in early December 2017 (Listen to 12/1/2017 podcast here). We recently updated that list and stated shares have risen ~54% since that time.  Even at current levels, ATGN is Maj’s favorite Run to One candidate, as he feels that the stock is not fully reflecting the recent strong quarter and the information from the conference call about an upcoming announcement of a U.K. partnership.  We also believe the company is getting close to being in a position to be more aggressive on the investor outreach front. Shares now trade at $0.60. Make sure to become a GeoInvesting member to see all of our Run to One candidates.

Dud: TORM

Our Multi-bagger Mock Portfolio has performed exceptionally well for us, with a peak average return of 89.45% and a current return of around 17% since its inception in May 2017.  This portfolio was launched for members who have longer-term investment horizons.

Unfortunately, like in any portfolio, not all picks are going to be winners. Despite the overall portfolio’s outperformance, Tor Minerals (OOTC:TORM), a global manufacturer and marketer of specialty mineral and pigment products, has underperformed significantly. Being that it was one of our core long holdings, this underperformance led us to cut our losses by trimming our position, and move on to other opportunities.  Although it still remains in the mock portfolio, customer diversification and new product launches are not occurring as fast as we had hoped.

Maj plans to interview management to determine if the stock should remain in the multi-bagger portfolio.

A Note From Maj Soueidan

This month’s message from Geo Co-founder Maj Soueidan

Dear Reader,

Earnings season has come and gone and our team at GeoInvesting has spent countless hours combing through hundreds of earnings reports in order to identify companies that we believe could be at an inflection point or experience tailwinds heading into the middle of 2018.

After carefully reviewing many of these earnings reports myself, I decided to start a portfolio called “Maj‘s Favorites” to make it easy for prospective members and our current subscribers to identify which companies I think have the wind at their backs heading out of this earnings season and into the Spring of 2018. Our first “favorites” list was introduced in early December 2017 and includes 8 stocks.  It has really come on strong with a current return of 21% and a peak return of 33%.

I’d like to invite you to take a look at this list of my favorite stocks and new potential “favorites” coming out of the Q4 reports, heading into the middle of 2018. You can view my “Favorites” portfolio here alongside of all of my other portfolios that members have access to.

Sincerely,

Maj Soueidan