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Call(s) to Action:

APPG ($1.37) – APPG is one of the most obvious pump and dump cases we have come across since we began investigating P&D’s in our inaugural report on RAYS which now trades at $0.001.

Some of the characters associated with APPG have deep roots in the pump and dump game.One character in particular that caught our attention is Lyle Hauser. Hauser’s company, The Vantage Group, is well entrenched in the APPG story. Mr. Hauser has ties to numerous past pump and dumps either through being an executive of these companies or by providing capital to them through diluted financing transactions (convertible securities) via The Vantage Group LTD., company where he holds the position of president and CEO. In 2012 We actually exposed his last P&D, First Quantum Ventures (PINK:DIMI). The stock fell from $1.35 to $0.04 in just one trading session.  We think investors will easily put the pieces of the APPG puzzle together resulting in a quick dump of its shares.

CTDH ($0.86) – Closed out our long position, locking in nearly a double. Recall in our 6/23/2014 call to action we stated we were looking to lock in some gains as shares eclipsed the $1.00 mark.  Stock increased nearly 400% from our first mention.  Please see detailed  history here.

GV ($1.55) Ex-GeoBargain back on our radar.  Reported Q2 2014 non-GAAP EPS of $0.01 vs $0.00 and more importantly a record backlog of $224 million vs $56 million in prior year.  The $224 does not include $76 million worth of contract wins since 7/1/2014 which would bring current backlog to $300 million.   We need to look into pending litigation.

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

  • ChinaHybrids
    • CMGE ($15.11 ) – Announced completion of investigation by independent committee of market rumors of possible bribery.  The foregoing investigation did not find any evidence that suggested CMGE or anyone at CMGE had engaged in bribery.
    • CCM, HOLI and DL reported strong quarterly results.  Please see earnings screen for full list of China-Based companies reporting earnings today.
  • U.S. News
    • CPHC, NSEC, CPHC, STRN, ARCX. Taking a closer look at what appear to be strong quarterly results.  Please see our earnings screen for full details.
  • GeoBargains/GeoBargains on the Radar
    • GeoBargain on the radar AMOT ($12.14; marked up over $13 pre) – Reported record Q2 2014 results.   Reported EPS of $0.29 vs $0.09 on 145% sales growth.

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

Disclosure: Long CCM, AMOT; Short APPG; May look to re-establish position in GV. 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
Concord Medical Services (NYSE:CCM) $7.73 $0.10 $0.14* $0.11*
Hollysys Automation (NASDAQ:HOLI) $22.78 $0.35 $0.44* $0.29*
China Distance Education (NYSE:DL) $17.47 $0.10 $0.15 $0.06

* denotes non-GAAP; ** Pre-market

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

In Other News…

China Mobile Games (NASDAQ:CMGE) ($15.11) – the largest publisher and a leading developer of mobile games in China, today announced that the Independent Committee of the Board of Directors of the Company has completed its review of market rumors of possible bribery.

The independent review included interviews with relevant personnel and a review of documents, digital information and data extract through procedures recommended by Simpson Thacher. The foregoing investigation did not find any evidence that suggested CMGE or anyone at CMGE had engaged in bribery.

The Independent Committee therefore advised CMGE’s Board of Directors of the completion of its investigation.

On the U.S. Front…

Notable U.S. Earnings…

Stock Price** EPS Estimate Reported EPS Prior Year Reported EPS
National Security Group, Inc. (NASDAQ:NSEC) $11.00 n/a $0.96* $0.35*
Canterbury Park Holdings (NASDAQ:CPHC) $9.80 n/a $0.11 $0.05
Sutron Corp (NASDAQ:STRN) $5.50 n/a $0.05* $0.00*
Arc Logistic Partners LP Common (NYSE:ARCX) $24.56 $0.29 $0.25* $0.13*

* denotes non-GAAP; ** Pre-market

GeoBargain/Specials…

Allied Motion (NASDAQ:AMOT) ($12.14) -GeoBargain on the Radar AMOT designs, manufactures and sells motion control products into applications that serve many industry sectors. The company reported strong Q2 2014 results:

  • Revenues was $62.1 million, an increase of 145% from $25.4 million in the same quarter last year.
  • Adjusted diluted EPS was $0.37 vs $0.09 in prior year.

Quotes from management,

“We are very pleased with the record results for the second quarter 2014 as they continue to validate our previous comments that we expect our revenues for 2014 to more than double relative to Allied’s 2013 pre-acquisition revenues and for the Globe acquisition to be accretive to earnings,” commented Dick Warzala, Chairman and CEO of Allied Motion. “When comparing the pro forma results of Allied and Globe for the six months ended June 30, 2013 to the actual results of Allied and Globe for the same period of 2014, our revenues increased from a pro forma of $104.1M in 2013 to $122.5M in 2014 and our earnings per share increased from a pro forma of $0.43/share in 2013 to $0.53/share in 2014. Also, on a year to date basis, we experienced growth in our served markets of Medical, Vehicle and Aerospace and Defense, while our Industrial and Electronics markets were flat. The Allied/Globe integration process, in which we have focused primarily on leveraging growth opportunities for the combined entity, is proceeding well. In September of 2014, we will take the process to the next level when we update our long term strategy and establish the goals and objectives for our company for the next three to five years. While we consider 2014 to be a transformative year for Allied Motion, our long term success will be further enhanced by leveraging the capabilities of both companies to design innovative “Motion Solutions That Change the Game” and meet the current and emerging needs of our customers in our served market segments.”

In Other U.S. News…

Goldfield (AMEX:GV) ($1.55) – GV is a leading provider of electrical construction and maintenance services in the energy infrastructure industry throughout much of the United States. The company today reported Q2 2014 results:

  • Revenue was $25.3 million, an increase of 23% from $20.6 million in the same quarter last year.
  • Adjusted diluted EPS was $0.01 vs $0.00 in prior year.
  • Current backlog reached $300 million, almost 6 fold of $56 million in prior year.

Quotes from earnings release,

“The existing MSAs have initial terms ranging from one year to four years, and some provide for additional renewals at the option of the customer. Our total MSA calculation assumes exercise of the renewal options. Revenue from assumed exercise of renewal options represents 47% of our total estimated MSA backlog as of June 30, 2014.”

“……Of the $224 million backlog as of June 30, 2014, $34 millions believed to be firm under existing project-specific fixed-price and maintenance contracts and the balance represents the estimated value of future services under our existing MSAs. We expect approximately $60 million (27%) of this backlog to be completed within the next 12 months.”

“The dramatic increase in our electrical construction MSAs attests to the strength of our operations and the success of efforts to grow that business.” “This portends well for our future,” Mr. Sottile added.

Caveat:

The company only expects $60 million of its backlog to be filled in the next 12 months and and states revenue from assumed exercise of renewal options represents 47% of our total estimated MSA backlog as of June 30, 2014.

Summary:

GV was once a GeoBargain (GB) and GeoBargain on the radar (GBR).  During its time as a GB and GBR, the stock peaked at 275% and 393% gains from our original codings.  It was the announcement of a large contract win that first brought us into the GV story.   As we stated in our 5/15/2014 email:

“Investors as well as the GeoTeam had hoped that the STEC project would open the door for the company to secure similar size contracts.  Thus far, this has not happened.  Furthermore, management has been unresponsive to questions posed to them by our team.”

We will once again attempt to re-interview management to see if the positive trend in backlog could lead to sustained top and bottom line results.

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

Sincerely,

The GeoTeam