Call(s) to Action:

Stay tuned for our next short thesis report coming shortly .

Ex-GeoBargain on the radar FNHC ($20.75) – Watching current pullback as possible buying opportunity. On 7/29/2014 FNHC reported blowout Q2 2014 results,  crushing EPS estimates of $0.61.  The stock, reached a high of $26.60 before retracing to current prices of $20.75 in the last two trading days.   Q2 EPS rose  228% to  $1.01 on 109% increase in sales to $59.0 million. The company filed an  S-3  the same day as earnings allowing  it to offer stock to raise $40 million. With over 100% revenue growth and over 200% bottom line growth  we feel the sell off is overdone, as the potential dilution only works out to about 10%, even though Q3 may see a sequential  decline in sales and earnings. Some investors may  be tepid on FNHC since the heart of hurricane  season has arrived.

GeoBargain USAK ($18.58) – Crushed analyst Q2 2014 EPS estimates of a loss of  $0.02.   USAK Reported non-GAAP EPS of $0.20 , its first profitable quarter in 3 years.  Will look to add to our position if stock does not open strong.

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

  • ChinaHybrids
    • CMGE ($14.89) – Announced strategic partnership with GREE to co-develop and publish the first official game on Naruto in China.
  • U.S. News
    • CTP($12.88) – Reported record Q2 2014 results; Reported Non-GAAP EPS of $0.30 vs $0.08 in prior year and ahead of analyst EPS estimates of $0.25.  Guided above for Q3 2014 revenues and EPS.
    • COHU ($10.90) – Reported strong Q2 2014 results; Reported non-GAAP EPS of $0.19 vs a loss of $0.06 in prior year and beat analyst EPS estimates of $0.14.
    • USAP ($29.66) – Reported strong Q2 2014 results; Reported non-GAAP EPS of $0.28 vs $0.00 in the prior year and ahead of analyst EPS estimates of $0.22.  USAP also has strong 2015 EPS estimates of $2.15 ($1.00 for 2014)
    • AMRC ($6.75) –     Reported strong Q2 2014 results; Reported non-GAAP EPS of $0.10 vs a loss of $0.01 in the prior year and well ahead of analyst estimates of a loss of $0.03.

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

Disclosure: Long USAK ; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front…

China Mobile Games (NASDAQ:CMGE) ($14.89)the largest publisher and a leading developer of mobile games in China, today announced :

it has made exclusive strategic partnership with GREE, a famous Japanese social networking platform company, to co-develop the first official mobile game on Naruto in China. CMGE also has the rights to publish the game and combat piracy in China.

Naruto is a masterpiece of Japanese cartoonist Masashi Kishimoto and serialized on < Weekly Shonen Jump > from 1999. It has been translated into various languages and released in more than 30 overseas countries. Cumulative circulation of the original comic has reached more than 200 million globally. Its animation has been played in a number of countries and regions, with a high and world-class popularity.

“We are delighted to cooperate with GREE to co-develop and publish the official mobile game on Naruto in China. GREE, together with Shueisha Inc, TV Tokyo Corporation and Studio Pierrot, as the production committee (IP owner), recognize and trust the R&D and publishing capability of CMGE. We really appreciate that,” said Xiao Jian, CEO of CMGE. “CMGE has been working diligently to provide great mobile games to extensive players. In our joint effort with GREE, we believe the official mobile game on Naruto will be launched in the fourth quarter this year. Warm-up activities will be started soon. Besides, we will start to clean up the pirated market in the meanwhile.”

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
$CTP $13.00 $0.25 $0.30* $0.08*
Cohu, Inc. (NASDAQ:COHU) $11.31 $0.14 $0.19* -$0.06*
Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) $29.30 $0.22 $0.28* $0.00*
$AMRC $7.36 -$0.03 $0.10 -$0.01

* denotes non-GAAP; ** Pre-market

GeoBargain/Specials…

Usa Truck (NASDAQ:USAK) ($18.58) –  GeoBargain USAK operates as a truckload carrier that provides general commodities transportation services in the United States, Mexico, and Canada. The company reported strong Q2 2014 financial results:

  • Total revenue this quarter increased by 9.7% to 153.3 million from 139.7 million in prior year.
  • Adjusted diluted EPS of $0.20 vs -$0.14 in prior year.

Quotes from management,

“We posted our first quarter of positive net income in three years,” said President and CEO John Simone.  “While continuing the work of implementing our turnaround plan, the progress we are making is evident in virtually every area of our business.  Despite the harsh winter that impacted the trucking industry as the year began, our results, on an adjusted basis, for the first six months of 2014 are also positive, with adjusted earnings per share of $0.07 compared to a loss of ($0.38) in last year’s period.

This is the first profitable quarter for USAK in 3 years, and the company heavily beat analyst estimate of a loss of $0.02.

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

Sincerely,

The GeoTeam