Lakeland Industries (LAKE) – Management maintains bullish outlook – GEO loses confidence in management’s word

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

  • ChinaHybrids
    • HPJ ($6.29) – Entered joint venture with Energous (NASDAQ:WATT) to develop wire free chargeable batteries.
    • RCON ($4.61; marked up pre market) – Announced preliminary full year 2014 results; expects sales to grow more than 20% over 2013 and expects to report net operating profit vs loss from operations in prior year.
  • GeoBargains/GeoBargains on the Radar
    • GeoSpecial LAKE ($6.25) – Reports flat Q2 2015 results; Reported decrease in EPS on flat sales.  Management maintains bullish outlook, stating “business activity remains robust and foresees increased global demand.”  We will keep LAKE coded as a GeoSpecial purely based on the fact that one of its competitors (Ansell) owns a large stake.  Even though we have a lost a bit of confidence in management’s word, as they have continuously stated that improvements are on the horizon, we believe that if the company is able to string together a few strong quarters, the likelihood of a buyout is back on the table.

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

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

Summary of general highlights:

On the Asian Front…

 

Reconstruction Tech (RCON) – Leading independent oilfield to report full year revenue, up more than 20%

Reconstruction Tech (NASDAQ:RCON) ($4.61; marked up pre market) – a leading independent oilfield services provider operating primarily in China, announced today it

anticipates reporting full year revenue for its fiscal year ended June 30, 2014 will be approximately RMB 93 million ($15 million), up more than 20% compared with revenue in fiscal 2013, as sales of hardware products to its oilfield company customers increased more than 100% year-over-year.

“As our company pursues becoming a more fully integrated customized supplier to its oil and gas customers — with the aim of reducing their costs and improving their production — sales of furnace and automation products were particularly strong,” stated Mr. Shenping Yin, Chairman and CEO of the Company, “and helped offset the full year reduction in revenues from fracturing services.”

Mr. Yin added, “Coupled with the strong sales gain, we expect to report a net operating profit compared with the loss from operations we incurred in fiscal 2013, as well as healthy percentage increases in net income and adjusted net income attributable to Recon Technologies Ltd. that were higher than the percentage gain in sales.”

 

Highpower Intl (HPJ) and Energous (WATT) announced joint development agreement for making any device wire-free chargeable

Highpower Intl (NASDAQ:HPJ) (6.29) –  manufactures and trades nickel metal hydride rechargeable batteries for portable electronic devices.  Announced a joint development agreement with Energous (WATT):

Energous and Highpower will jointly develop reference designs for WattUp-enabled Highpower batteries and various other fully integrated solutions for consumers. In effect, end users would ultimately be able to make any device wire-free chargeable with WattUp-enabled batteries.

GeoBargain/Specials…

Lakeland Industries (NASDAQ:LAKE) ($6.25) – manufactures and sells safety garments and accessories for the industrial protective clothing market worldwide.  LAKE reported second quarter 2015 results:

  • Sales worldwide were $24.6M this year and $24.6M last year. Excluding Brazil, sales were $22.8M this year compared with $22.9M last year.
  • Non-GAAP EPS of $0.10 vs $0.25 in the prior year

Christopher J. Ryan, President and Chief Executive Officer of Lakeland Industries, stated, “The growth in our international operations, including Brazil, remain intact. At the same time, while business mix and large order flows resulted in a modest decline in year-over-year domestic sales, business activity remains robust and we foresee increased global demand.

We will keep LAKE coded as a GeoSpecial purely based on the fact that one of its competitors (Ansell) owns a large stake.  Even though we have a lost a bit of confidence in management’s word, as they have continuously stated that improvements are on the horizon, we believe that if the company is able to string together a few strong quarters, the likelihood of a buyout is back on the table.

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

Sincerely,

The GeoTeam