GEO Investing

Calls to Action: MAG; closed our position to move onto more timely opportunities.  We believe the stock is an attractive takeover play.

GeoTeam News Highlights:

  • ChinaHybrid
    • VISN reports Q1 2014 results, nearly 30% revenue growth but reports large net loss for the quarter.
    • XNY reports Q1 2014 results; Sales and EPS down vs prior year.
    • GIGM partners with Rumble Entertainment to bring KingsRoad MMO to Taiwan, Hong Kong and Macau
    • SOL builds biggest solar park in Baden-Wurttemberg,  Germany
    • HOLI announced contract win with the Land Transport Authority in Singapore
    • TSL offers 8 million shares, and $150 million in convertible senior notes
  • U.S. News
  • BZCreports strong Q4 2014 results; EPS for Q4 2014 of $0.36 vs $0.12 in the prior year and crushes analyst EPS estimates of $0.12.  Quarter was positively impacted due to larger than normal orders booked during the quarter.
  • GeoBargains/GeoBargains on the Radar

“The US defense sector is having a remarkable year on Capitol Hill. In fact, it is batting 1.000 so far, with three of four congressional defense panels protecting weapon programs and adding funds to buy platforms the military didn’t even request.”

  • GeoBargain on the radar BLIN signed a multi-year, multimillion dollar agreement with one of the fastest growing franchises in North America.  Still only a growth play in  2015.
  • Pump and Dumps
    • Closed out our short in PGFY, locking in over 70% gains.
  • Marijuana Hype
    • Adding WCIG to our Cannabis screen

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

Disclosure: Long MKRS, CVU ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

On the Asian Front…

Select China Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Visionchina Media (NASDAQ:VISN) $17.91 n/a -$1.41* -$2.53*
China Xiniya Fashion (NYSE:XNY) $0.96 n/a $0.08* $0.10*

* 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…

Gigamedia(NASDAQ:GIGM) ($1.06) – GIGM is a major provider of online entertainment software and services, with headquarters in Taipei, Taiwan.  GIGM announced that it has secured exclusive license rights from Rumble Entertainment, Inc. to offer and operate their acclaimed next-generation browser action/role-playing game, KingsRoad.

Renesola (NYSE:SOL) ($2.22), a leading brand and technology provider of solar photovoltaic (“PV”) products.  SOL  in cooperation with energy supplier EnBW Energie Baden-Wurttemberg AG (“EnBW Energie”), has built the biggest solar park in Baden-Wurttemberg, Germany with approximately 40,000 polycrystalline photovoltaic ReneSola modules and a total capacity of 10 megawatts (“MW”).

Hollysys Automation (NASDAQ:HOLI)($21.41) – HollySys (Asia Pacific) Pte Ltd, a leading provider of automation and control technologies and applications in Asia, announced today that it successfully signed a contract with Land Transport Authority (“LTA”) in Singapore to provide the subway with an Integrated Supervisory Control System for the Thomson & Eastern Region Lines in Singapore, and the contract size is approximately SGD16 million.

Trina Solar (NYSE:TSL) ($12.39) – TSL is a well-recognized manufacturer of high quality modules and has a long history as a solar PV pioneer.  TSL announced the commencement of the offering of US$150 million in aggregate principal amount of convertible senior notes due 2019 (the “Notes”) (the “Notes Offering”).  The Company also commenced a concurrent offering of 8,800,000 American Depositary Shares.

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Breeze-Eastern (AMEX:BZC) $9.97 $0.12 $0.36* $0.12*

* denotes non-GAAP; ** Pre-market


Quote from recent article in the Defense News.

“Despite months of dire warnings and gloomy rhetoric about the ramifications of new rounds of across-the-board cuts, the House Appropriations Committee Defense (HAC-D) subcommittee on May 30 approved a 2015 Pentagon spending bill that would give the Defense Department $570.4 billion. It would add funds for fighter jets, electronic-attack planes and maintain 11 aircraft carriers.”

We believe this news should bode well for GeoBargains Mikros Systems (OOTC:MKRS) ($0.21) and Cpi Aerostructures (AMEX:CVU) ($12.73)

See the full article at

Bridgeline Digital (NASDAQ:BLIN) ($0.82) –  GeoBargain on the radar BLIN develops iAPPS Web engagement management product platform and related digital solutions in the United States.  BLIN has performed poorly during its brief tenure as a GBR.  The company has overpromised and under-delivered thus far.   However,  today BLIN announced another multi-million dollar agreement with one of the fastest growing franchises in North America. Once deployed, the highly scalable iAPPSds platform will power 1,200 independent hair care micro-websites. The term of this agreement is over 3 years and is valued at approximately $3 million in iAPPSds licensing fees and related services.  This marks the second multi-million dollar contract announcement in the last 3 months.   We will keep BLIN coded as GBR as they seem to be setting the stage for a ramp-up in 2015.

In other news…

Magnetek(NASDAQ:MAG)($22.22) – MAG provides digital power control systems to control motion and power primarily in material handling, elevator, and mining applications.  We closed our position in MAG to move onto more timely opportunities.  We believe the stock is still an attractive takeover play.  We first disclosed our long position on 3/19/2012 when the stock was trading at slightly over $17 per share.

Here was our  details from our most recent update issued on  5/10/2013:

“In our 4/5/2013 when MAG was trading at $14.55 we discussed that MAG rejected a $15.00 per share going private offer and stated we do not believe that the company will accept any going private offer unless it is substantially higher than current prices.  We mentioned investors should look at the company’s Investor Presentation for some of the company’s Valuation Assumptions which were much higher than current prices.

Finally we stated there had been form 4 activityby activist investors Austin Marxe and David Greenhouse increasing their stake in MAG. “

During our holding period, MAG has reported unexciting top and bottom line growth.  We believe the only thing holding the stock up is that potential suitor makes an offer to buy the company.  However, shares are up nicely since we disclosed our long position and we have chosen to move onto more timely/pertinent investment opportunities.

Breeze-Eastern(AMEX:BZC) ($9.97) – BZC designs, develops, manufactures, sells, and services engineered mission equipment for specialty aerospace and defense applications.  BZC reported strong Q4 2014 results:

  • Net sales of  $28.3 million versus $22.0 million for the fiscal 2013 fourth quarter.
  • Non-GAAP EPS of $0.36 vs $0.12 in the prior year and well ahead of analyst EPS estimates of $0.12

Results were positively impacted by larger than normal orders booked during the quarter:

“Our accounts receivable were $8.2 million higher than last year due to year-end shipment timing from a strong fiscal fourth quarter.  We expect to have significantly lower accounts receivable by our fiscal 2015 first quarter reporting.”

The company has a history of inconsistent quarters, but we will continue to monitor the story.

Pump and Dumps…

Pingify Intl (OTCCB:PGFY) ($0.28) –  PGFY’s goal is to provide a simple notification tool that puts you in control of what you receive.  In our 5/6/2013 email we mentioned an aggressive pump campaign had begun on PGFY and that we established a short position.  On 5/8/2014 we published a follow up to our report due to the slew of press releases the company issued.  On 5/14/2014 shares of PGFY were halted by the SEC.  Shares reopened sharply lower on 5/29/2014.  We have covered our remaining short position, locking in over 70% gains.

Marijuana Hype…

Adding one stock to our Cannabis screen:

Wee-Cig Intl Corp(OOTC:WCIG) ($0.07) – Adding to our Cannabis screen due to third party promtional email campagin by touting WCIG products as helping cosumers to vaporize dried herbs.

For a list of stocks we are tracking in the Marijuana space please go here.

**Please note that our decision to buy selected marijuana names is just based on our desire to ride the hype surrounding the sector and not an endorsement of their operations.  In the long-term, most of the marijuana stocks being hyped will likely come crashing down.  Also note that on 3/17/2014 we  mentioned that we have liquidated most of our marijuana holdings.

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


The GeoTeam