GEO Investing

A Monthly Review of GeoInvesting’s Most Notable Activity — GeoInvesting March 2016 Newsletter

Our Calls to Action

Money-making Moves that the GeoTeam Conveys to its Premium Members

  • March 31, 2016 — Innovative Food Holdings (OOTC:IVFH) — On March 31, we stated that we were adding to our IVFH long position on the heels of strong Q4 2015 results after excluding the sale of an underperforming asset which the company sold. Shares are mostly flat since we increased our position and as investors are probably awaiting follow through from the company.
  • March 8, 2016 — Noah Holdings (NYSE:NOAH) – We Published our short thesis including why NOAH’s new share structure puts two shareholders in a position to usurp the interests of all common shareholders. NOAH is in the wealth management business with heavy exposure to China and its stock market.  We anticipate continued pressure on Chinese equities that will lead to an unimpressive performance for the company’s legacy businesses.  In addition, NOAH’s new growth initiative is in the risky “shadow banking” internet space.  Investing in NOAH would be a vote of confidence in its two controlling shareholders who arbitrarily increased their voting interest by 4X.  We do not consider NOAH investable.

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Information Arbitrage News

News Before the “Rest of the World” Finds Out

  • March 7, 2015 — Momo Inc. (NMS:MOMO) — On March 7, 2016, we put out a premium Tweet to members stating that “Rumors out of China were that Alibaba Group Holding Limited A (NYSE:BABA) was looking to potentially acquire Momo Inc.” The stock popped and then went lower initially. In early April, we learned that BABA had become part of the buyer group for MOMO’s non-binding go private offer. On the morning of April 6, 2016, the stock traded up 33% to $16 per share on news of BABA’s stake.

Top Performing Picks

Picks that GeoInvesting is Particularly Proud Of

  • March 3, 2016 — Educational Development Corpora (NASDAQ:EDUC) — At the beginning of the year, we mentioned that EDUC was a good candidate to add to your portfolio during the market pullback when shares were trading down to the $9 range. The stock is up nicely in parallel with the market recovery and continued record operating results attributable to the company’s direct selling business division.
  • March 4, 2016 — MGP Ingredients Inc. (NMS:MGPI) – Locked in 54% gain. Our initial alert was on 8/16/15, when we initiated a long position based on the company’s strong Q2 2015 results which did not favorably impact the stock due to weak overall market conditions. We added to our position on 8/17/15 and 9/8/15 based on insider buys and the company’s announcement of a share buyback program.  MGPI reached a peak of $27.56 or 75% higher than our initial alert price during its tenure as a core long selection.

GeoBargain Updates

Additions & Subtractions of GeoInvesting’s Best Picks

  • March 22 and 31, 2016 — Pioneer Power Solutions Inc. (NASDAQ:PPSI)Coded as a GeoBargain and initiated long position. We were tracking PPSI based on its acquisition strategy, restructuring plans, strong 2016 guidance and increased infrastructure spending in the U.S.  The company reported Q4 2015 results and 2016 guidance on 3/29/16.  See our commentary here.
  • March 10 and 11, 2016 – Repro-Med Sys. (OOTC:REPR) – Shares dropped sharply after the company’s press release regarding an FDA warning letter on February 26, 2016. The crux of issue is the FDA inspector determined that the company’s flagship products, the Freedom 60 Syringe and Freedom Edge Infusion Pumps, are class III devices and do not have pre-market approval or an investigational device exemption.  In 10 previous inspections since the Freedom60 was launched in 1997, the product was considered a class II device.  Management submitted a formal response, is in active dialogue with the FDA and confident all issues will be resolved.  In the meantime, the company’s operations are not being impacted by the letter.
  • March 9, 2016 — Superior Uniform Group (NASDAQ:SGC) — Announced the acquisition of BAMKO Inc., a full-service merchandise sourcing and promotional products company based in Los Angeles, CA for total potential consideration of $26.8 million. BAMKO ‘s 2015 revenues are reported at $31.5 million. SGC expects the acquisition to be accretive to 2016 operating results exclusive of acquisition related costs.  The GeoTeam estimates the acquisition should add around $0.13 to EPS.

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