**Calls to Action:

  • GeoBargain SPCB reported strong Q1 2014 results.  Recent contract wins sets the stage for a very strong growth for the remaining quarters of 2014.   We will be adding on any pullbacks.
  • GeoBargain VRYAF won its first cloud contract with one of the largest privately-owned companies in convenience store industry.  This is a significant because investors have been waiting for VRYAF to land its first Cloud customer.  Although the VRYAF does not say who the customer is, based on our quick due diligence from the information provided,  we believe this privately owned company could be WAWA.  Shares recently  pulled back on  weak  Q1 2014 financial results.  Today’s news could bring investors back into the stock.

Here are the stories that the GeoTeam is following today… (Please see full disclosures at bottom)

General Highlights:

  • ChinaHybrid
    • Recent IPO KANG reported strong revenue growth in Q4 2013; guides above analyst estimates for fiscal 2014 revenues. However, at first glance our own non-GAAP EPS calculations show a less positive picture.
    • New China IPO ZPIN, a leading career platform in China set to open this week.  Price range of $12.50 to $14.50
    • Fly on the wall – “WB initiated with an “outperform” at Credit Suisse”
  • U.S. News
    • Ex-GeoBargain MFRI reported strong Q1 2014 results, however consistent growth likely not in the cards until 2015.
    • LMNR reports strong 2Q results, seems more than fairly valued.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain POLXF reported weak Q1 2014 results due to issues regarding equipment upgrades to improve its efficiency of operations.  It appears it may be an ongoing issue for the remainder of 2014.  Verbiage in press release indicate company will remain profitable through upgrade process but does not comment on near term growth.  Order book still remains strong.  We will hold shares in any weakness.

For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.

Disclosure: Long SPCB, VRYAF, POLXF ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front…

Select China Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Isoftstone Holdings (NYSE:ISS) $5.50 n/a $0.04* $0.10*
Ikang Health Care Group (NASDAQ:KANG) $16.77 -$0.11 -$1.09* -$12.70*
Mecox Lane (NASDAQ:MCOX) $4.51 n/a -$0.39* -$0.27*

* denotes non-GAAP; ** Pre-market

Please see our ChinaHybrid March 2014 quarter earnings screen (password GEO2014) for select companies that have reported earnings.

In Other News…

Weibo Corp American Dep (NASDAQ:WB) ($18.65) WB operates as a social media platform for people to create, distribute, and discover Chinese-based content in the People’s Republic of China. Credit Suisse initiated coverage on WB as “outperform”.

China IPO’s Set to Begin Trading…

Zhaopin Limited (Unknown:ZPIN) is a leading career platform in China, focusing on connecting users with relevant job opportunities throughout their career lifecycle. The zhaopin.com website is the most popular career-focused website in China as measured by average daily unique visitors in each month of 2013, according to the iResearch Public Data. The IPO price range is from $12.50 to $14.50, which will start trading on the market this week.

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Limoneira Co (NBB:LMNR) $23.35 $0.12 $0.16* -$0.06*
Mfri (NASDAQ:MFRI) $11.58 n/a 0.57* 0.25*

* denotes non-GAAP; ** Pre-market

GeoBargain/Specials…

Supercom Ltd Ordinary Shares (NASDAQ:SPCB) ($9.05) – GeoBargain on the Radar SPCB provides electronic monitoring, identification, and security products and solutions to governments, and private and public organizations in Europe, the United States, and Israel.  SPCB announced Q1 2014 results:

    • Revenue of $5.3 million vs $2.0 million in prior year
    • Non-GAAP net income of $0.13 vs $0.07

Quote from management:

“As was previously announced, during the first quarter, SuperCom was awarded over $29 million dollars in new contracts, the majority of which will be recognized during the last three quarters of 2014.”

We believe the recent contract win sets the stage for very strong growth for the remainder of fiscal 2014.

Viryanet (OOTC:VRYAF) ($2.70) – GeoBargain VRYAF delivers mobile workforce management solutions that intelligently guide, automate, and optimize both simple and complex field service work, resulting in measurable business benefits.  VRYAF announced today the selection of ViryaNet Cloud and ViryaNet G4 Field Application by one of the largest privately-owned companies in the convenience store industry.  This marks the first “cloud” contract win for VRYAF.

This is a significant because investors have been waiting for VRYAF to land its first Cloud customer.  Although the VRYAF does not say who the customer is, based on our quick due diligence from the information provided,  we believe this privately owned company could be WAWA.  Shares recently  pulled back on  weak  Q1 2014 financial results.  Today’s news could bring investors back into the stock.

Polydex Pharmaceuticals (OOTC:POLXF) ($1.20) – GeoBargain POLXF engages in the development, manufacture, and marketing of biotechnology-based products for the human pharmaceutical market; and manufacture of bulk pharmaceutical intermediates for the veterinary pharmaceutical industry worldwide. POLXF announced weak Q1 2014 results:

    • Revenue of $1,413 thousands vs $1,440 thousands in prior year
    • GAAP net income of $0.02 vs $0.08

Weakness in the quarter was due to issues regarding equipment upgrades to improve its efficiency of operations.  It appears it may be an ongoing issue for the remainder of 2014.  Verbiage in press release indicated company will remain profitable through upgrade process but does not comment on near term growth.  Order book still remains strong.  We will hold shares in any weakness.

In Other U.S. News…

Mfri (NASDAQ:MFRI) ($10.70) – Ex-GeoBargain MFRI  is engaged in the manufacture and sale of products in three distinct segments: piping systems, filtration products and industrial process cooling. Corporate and Other includes the installation of heating, ventilation and air conditioning (HVAC) systems. MFRI announced Q1 2014 results:

    • Revenue of $59.5 million vs $54.7 million in prior year
    • Non-GAAP net income of $0.57 vs $0.25

Quote from management: “MFRI turned in an excellent first-quarter performance, continuing to benefit from the many steps we took to build our business in prior years. Net sales from continuing operations rose 9%, driven by Piping Systems, which continued to fulfill orders for a significant domestic oil and gas project and for major projects in Saudi Arabia and the United Arab Emirates (U.A.E.). As a result, our EPS from continuing operations of $0.57 is more than double the EPS in the prior year’s quarter.”

Third Party Research…

From time to time we like to provide Third Party Research from other entities.  This is for informational purposes only.  Unless otherwise stated, the GeoTeam has no opinion – bullish or bearish – on these stories.

Torchlight Energy (OOTC:TRCH) (3.24) – Umbrella Research refuted Seeking Alpha article on TRCH.  Read Umbrella Research full report here.

For more timely information, particularly during the daily trading session, we urge our members to read our message board posts daily.

Sincerely,

The GeoTeam