GEO Investing

Call(s) to Action: Stay tuned for our latest bullish article to be released shortly after market open.

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

  • ChinaHybrids
    • NTHC ($10.04) – Reported strong Q2 2014 results; Revenues of $34.2 million vs $10.6 million and EPS of $0.49 vs $0.08 in prior year.
    • JKS ($26.57) – Announced a $225 million private equity investment led by China Development Bank International and Macquarie Greater China Infrastructure Fund for solar power project.
    • GAGA ($3.55) – Announced it has entered into a definitive merger agreement for a Going Private transaction for $4.06 per ADS.   GAGA had a prior Going Private offer announced 5/22/2013 at a price of $4.01 per ADS that never closed.
    • NQ ($6.90) –  Announced that its board of directors has received a non-binding proposal from Bison Capital Holding Company Limited to acquire all of NQ’s outstanding ordinary shares and American Depositary Shares (“ADSs,” each representing five ordinary shares of NQ). Bison has proposed a fixed cash consideration of US$9.80 per ADS.
  • U.S. News
    • BUKS ($0.14) – Reported strong Q4 2014 results; Q4 revenues of $14.6 million vs $12.3 million in prior year.  Q4 2014 boasts the highest quarterly revenue level in the last 3 years.  Q4 2014 EPS of $0.02 vs $0.00 in prior year period.  Will look to interview management.
    • HYGS ($20.81) – Reported Q2 2014 results; Q2 revenues of $10.7 million, an increase of 10%, compared to last year. Breakeven EPS this quarter vs -$0.47 in prior year; also beat analyst estimate EPS of -$0.26. Management sees possibility of bringing current backlog of $67.1 million to $100 million in the next twelve months.
    • BTUI ($3.21) – Reported Q2 2014 results; Q2 revenues of $16.4 million, 15.4% increase from $14.2 million in the same quarter last year. EPS of $0.06 this quarter vs -$0.03 last year. This is the first profitable quarter over a time period.
    • LMAT ($7.94) – Reported Q2 2014 results; Record Q2 revenues of 18.2 million vs $16.0 million last year. EPS of $0.09 vs $0.06 last year, beat earnings estimate by $0.04. Company raised annual sales guidance to $70.1 million (9% vs 2013), and annual operating income guidance to $5.6 million (24% vs 2013).
    • NVMI ($11.29) – Reported Q2 results; Strong Q2 earnings growth on 17% sales increase but slightly less than analyst estimates. Management offers bullish commentary on new product offering.
    • ECYT ($6.12) – Reported Q2 results; Strong Q2 revenues of $49.2 million vs $16.5 million, EPS of $0.54 vs -$0.23, beat analyst estimate of $0.14.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain on the radar CTEI ($0.96) – Reported record Q3 2014 results. Reported 152% sales growth and EPS of $0.02 vs $0.00.  Management commentary very bullish.

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

Disclosure: Long NHTC, CTEI; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front…

Natural Health Trends (OOTC:NHTC) ($10.04) – NHTC is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America, and Europe. The company reported strong Q2 2014 results:

  • Total revenues were $34.2 million, up 223% compared to $10.6 million in the second quarter last year.
  • Diluted EPS in this quarter was $0.49, compared to $0.08 in prior year.

Quotes from management,

“This was another excellent quarter for Natural Health Trends,” remarked Chris Sharng, President of Natural Health Trends Corp. “Orders taken during the second quarter were very strong. In addition, the quarter’s financial results also benefited from delivering significant orders taken but unshipped in March, with shipments made during the second quarter.”

“For the first six months of 2014, the Company generated more revenue and net income than it did for the entire 2013 year,” added Mr. Sharng. “The strong results so far in 2014 clearly demonstrate that our efforts to enhance our leadership development and training programs, and expand our products, services and promotions, can effectively drive strong results. The result has been a more informed base of members, and this has translated to higher average sales per member. We have focused particularly on investments in China, Hong Kong and Taiwan, where we think we have the most promising opportunities. Our programs aim for long-term growth. We are very pleased with the recent performance but are more excited about what we can accomplish in the long run.”

The company declared its third consecutive quarterly dividend of $0.01 per share on common stock outstanding.

Jinkosolar Holdings(NYSE:JKS) ($26.57) – a global leader in the solar PV industry, today announced:

China Development Bank International (“CDBI”), the Macquarie Greater China Infrastructure Fund (“MGCIF”), a fund managed by Macquarie Infrastructure and Real Assets, and New Horizon Capital (“New Horizon”) have agreed to invest a total of US$225 million in the Company’s downstream solar power project business.

“We are very pleased to welcome CDBI, MGCIF and New Horizon as partners in our downstream business. They will not only contribute capital to further expand our project development capabilities, but will also provide a wide range of support to drive future growth. We believe this is another vote of confidence in our team and the long-term prospects of our downstream business, and are confident that with their support, Jinko Power will deliver strong growth which will in turn benefit all of JinkoSolar’s shareholders,” said Mr. Xiande Li, Chairman of JinkoSolar. “In addition, China’s solar power market has a well-established regulatory framework and is currently in a phase of rapid growth. CDBI’s investment demonstrates the growing interest from domestic Chinese capital in the solar power project sector. We also expect MGCIF to help us further tap into the global solar power market through the Macquarie Group’s global resources and network. This round of investment marks an important milestone in our effort to spin off and list our downstream business. With the added strengths of these new partnerships, we are revising our full-year 2014 project development guidance upwards from 400MW to above 600MW. Our downstream capacity will exceed 800MW by end 2014. Looking forward, we intend to continue taking full advantage of our leading position in the Chinese solar power infrastructure sector to further grow our downstream business.”

Le Gaga Holdings (NASDAQ:GAGA) ($3.55) – a leading greenhouse vegetable producer in China:

announced that it has entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Harvest Parent Limited (“Parent”), a Cayman Islands exempted company with limited liability, and Harvest Merger Limited (“Merger Sub”), a Cayman Islands exempted company with limited liability. Pursuant to the Merger Agreement, Parent will acquire the Company for US$0.0812 per ordinary share or US$4.06 per American Depositary Share, each representing 50 ordinary shares (“ADS”). This represents a 21.56% premium over the closing price of US$3.34 per ADS as quoted by the NASDAQ Global Select Market (“NASDAQ”) on May 21, 2013, and a 22.17% premium over the volume-weighted average trading price of the Company’s ADSs during the 30 trading days prior to, and including, May 21, 2013, the last trading day prior to the Company’s announcement on May 22, 2013 that it had received a “going private” proposal.

Nq Mobile (NYSE:NQ) ($8.49 pre-market) – a leading global provider of mobile Internet services, today announced:

its board of directors (the “Board”) has received a non-binding proposal from Bison Capital Holding Company Limited (“Bison”) to acquire all of NQ’s outstanding ordinary shares and American Depositary Shares (“ADSs,” each representing five ordinary shares of NQ). Bison has proposed a fixed cash consideration of US$9.80 per ADS.

The Board is reviewing the proposed transaction, and may retain independent advisors, including an independent financial advisor, to assist it in its work. No decisions have been made by the Board with respect to its response to Bison’s proposal.

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Butler National Corporation (BB:BUKS) $0.15 n/a $0.02 $0.00
Hydrogenics Corporation (NASDAQ:HYGS) $22.22 -$0.26 $0.00 -$0.47
Btu International, Inc. (NASDAQ:BTUI) $3.41 n/a $0.06 -$0.03
Lemaitre Vascular, Inc. (NASDAQ:LMAT) $8.00 $0.05 $0.09 $0.06
Nova Measuring Instrument (NASDAQ:NVMI) $10.52 $0.19 $0.22 $0.14
$ECYT $6.75 $0.14 $0.52 -$0.23
Cemtrex Inc Common (OTCCB:CTEI) $1.00 n/a $0.02 $0.00

* denotes non-GAAP; ** Pre-market

GeoBargain/Specials…

Cemtrex Inc Common (OTCCB:CTEI) ($0.96) – CTEI manufactures and sells instruments for emissions monitoring, process analysis, instrumentation, and controls for industrial applications and compliance with environmental regulations. The company reported Q3 2014 results:

  • Net sales this quarter increased by 152%, to $13,453,734 from $5,332,157 in prior year.
  • EPS this quarter was $0.02 as compared to $0.00 in prior year.

Quotes from management,

“This record-setting third quarter for us was due to both organic growth amongst our existing businesses and our recent acquisition. Our team is executing at a high level and we are in a great position for continued high growth. I am extremely confident in our business plan and our strategy to deliver unparalleled results for our shareholders.”

We coded CTEI as a GeoBargain on the radar on 07/17/2014 in our email after the company announced new orders of over $7 million.

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

Sincerely,

The GeoTeam