Call(s) to Action:

SIMO ($23.06) – Strong buy on pullbacks. Recently reported strong Q2 2014 results beating analyst top and bottom line estimates and guided above for Q3 and full year 2014 revenues.   We believe stock should perform well when market firms up.

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

  • ChinaHybrids
    • MONT ($21.55) – Announced shareholder approval for acquisition by Shanghai Pudong Science and Technology for $22.60 per share.
  • U.S. News
    • AIRT ($11.58) – The GeoTeam is taking a closer look due to management commentary of 2014 being a transitional year and recent 13D/G activity specifically by AO Partners Group who has recently increased their stake to over 21%.  AIRT’s CEO Nicholas Swenson is also the managing partner of AO Partners Group.   AO believes shares are undervalued and intends to influence the policies of the issuer and assert shareholder rights, with a goal of maximizing the value of the common stock.
    • PTX ($7.51) – The GeoTeam is beginning to track the stock due to explosive revenue growth estimates for fiscal 2014 and 2015 of 60% and 62%, respectively.  The company has also reported 2 profitable quarters in a row after reporting 10 straight quarterly losses.  We plan to interview management to learn more about the the turnaround.
    • PLNR ($2.69) – Reported strong Q3 2014 results; Beat analyst EPS estimates by $0.03, beat revenue estimates and guided above for both Q4 and full year EPS and revenues.
    • SKUL ($6.76) – Reported strong Q2 2014 results.  Beat analyst EPS estimates by $0.05, revenues in-line and guided above for full year 2014 EPS.

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

Disclosure: No positions; Other Long Positions; Other Short Positions; Pump & Dump Positions (Password GEO2014)

Summary of general highlights:

On the Asian Front…

Montage Tech Group Ltd (NASDAQ:MONT) ($21.55) – MONT is global fabless provider of analog and mixed-signal semiconductor solutions currently addressing the home entertainment and cloud computing markets. Announced the results of its extraordinary general meeting of shareholders (the “EGM”) held on July 31, 2014 in Shanghai, China.

Shareholders voted to approve the Agreement and Plan of Merger, dated June 11, 2014 (the “Merger Agreement”), under which Shanghai Pudong Science and Technology Investment Co. Ltd. (“PDSTI”), a wholly state-owned limited liability company directly under Pudong New Area government of Shanghai, will acquire all of the outstanding ordinary shares of Montage for US$22.60 per ordinary share by way of a merger (the “Merger”).

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
Planar Systems (NASDAQ:PLNR) $3.14 $0.02 $0.05* -$0.02*
Skullcandy Inc (NASDAQ:SKUL) $7.30 $0.01 $0.07 $0.00*

* denotes non-GAAP; ** Pre-market

In Other U.S. News…

Air T, Inc. (NASDAQ:AIRT) ($11.58) – AIRT provides overnight air cargo, ground equipment sales, and ground support services in the United States and internationally. We are starting to track the company and the reasons for tracking are:

  • Although the revenue and EPS of FY 2014 ending on March are flat compared to prior year, the company management claimed fiscal 2014 was a year of transition for the company.
  • Company reported significant backlog increase in 2014 from 2013, 14.4 million vs 6.5 million, and below are the backlog/sales ratios in the past four years:
  • 2014 = 0.14
  • 2013 = .06
  • 2012 = .17
  • 2011 = .12
  • The company’s CEO who appears to be a partner in a hedge fund just increased his stake in the company to 22%, and made the following comment in the section of Purpose of Transaction in the SEC filing:

“The AO Partners Group acquired shares of Common Stock because it believes that the Common Stock is undervalued. The AO Partners Group’s intent is to influence the policies of the Issuer and assert shareholder rights, with a goal of maximizing the value of the Common Stock.”

  • The company has recently amended its shareholder rights agreement, an action often taken by company’s board of directors who believe their company may be a target of a hostile takeover.

We will take a look at this plan over the next couple of days, and interview management to learn more about the company’s new direction.

Pernix Therapeutics Holdings, Inc. (AMEX:PTX)($7.51) – a specialty pharmaceutical company, develops, manufactures, markets, and sells branded and generic pharmaceutical products.  Reasons for tracking:

  • The company has reported 2 profitable quarters in a row after 10 straight quarterly losses
  • Revenues expected to increase 60% to $136 million in 2014, and another 62% increase to $221 million in 2015
  • While at a PE of 71 on 2014 EPS estimates of $0.11 shares are trading at only PE multiple of 7 on 2015 EPS estimates of $0.96.

We plan to interview management to learn more about what is fueling the turn around.

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

Sincerely,

The GeoTeam