Congratulations to GeoInvesting research contributor Egor Romanyuk who pitched another favorite trucking company of his on August 8, 2021, which is now up 34.09%. Better yet, we chose Egor’s pitch as a GeoInvesting favorite and added it to our Selected Long Disclosure list, which is a tool our Premium Members lean on to assist them in their research. And that is a very important point we want to convey to you. We try our best to let our Premium Members know when a GEO Contributor pick connects with our investing style.
Egor’s experience and knowledge in the trucking industry has been leading him on a path to find what he feels to be some of the better transportation-focused companies. Since we began accepting pitches in 2014, to date, 60.87% of the stock pitches made by GeoInvesting research contributors have amassed positive returns. Let’s put that in perspective using baseball as an example. In baseball, a batting average of 300% is looked at as being superior. Well, Egor’s batting average at GEO is an even more impressive 1,000% – a baseball perfect score – meaning that every time Egor swings his bat he hits the ball He Sports an average return of 105.15% at the peak percent gains of his picks.
Egor Romanyuk’s most recent pitch, Usa Truck, Inc. (NASDAQ:USAK), is a truckload carrier in the United States, Mexico, and Canada. The company operates through two segments, Trucking and USAT Logistics.
In his first conversation with Maj in April 2021, Egor explained why he invests heavily in transportation companies, capitalizing on a true “buy what you know” philosophy preached by our favorite investor, Peter Lynch. We encourage you to watch that discussion too (here), perhaps after you hear his pitch on USAK.
When Maj caught up with Egor on August 6, 2021, he primed his pitch with a few small reasons why USAK is in his crosshairs:
- “So USA Truck – The reason why I like it. It’s super illiquid. When there’s good news, it moves up. I did a lot of research on it and like it for all the fundamental reasons.
- The trucking industry is very hot right now. I’m sure you’ve seen pictures of all the container ships that are stuck at LA ports, trying to get in.
- The trade deficit for the U.S., I think it’s at record levels. So there’s a lot of stuff being imported into the country.
- The retail sentiment is high right now. So there’s a lot of freight to be moved around. And trucking companies or a lot of trucking companies are capitalizing on that.”
Don’t forget to follow Egor on twitter @romanyuk_e and don’t miss out on the next pitch he brings to the GeoInvesting Community.
Dud – Muscle Pharm Corp (OTC:MSLP)
MusclePharm Corporation, a global provider of leading sports nutrition & lifestyle brands (such as protein powders), recently entered the energy drink market.
We love investing in turnarounds because they can often turn into multi-baggers as investors might ignore them in the early stages of turnaround initiatives. That’s why we were excited about the MSLP story when we found the company at very cheap valuations. MSLP looked to be at the very final stage of its turnaround.
The company has a great brand identity and was trying to reinvent itself under a new CEO. The stock initially rose as high as 528% after we started covering it on January 15, 2021. However, supply chain issues, escalating freight costs and inflationary pressures in whey protein unexpectedly destroyed gross margins, causing the company to take a few steps backwards in their restructuring plan.
To add salt to the wound the company announced a highly dilutive financing deal to combat liquidity issues brought about by these challenges.
On the positive side, we still think the company’s move into the functional beverage industry (energy drinks), which has been gaining healthy pre-order momentum, will be a success. The company’s hope is that it can push this new product into an established customer distribution space, where the company sees its future. But, we’re not going to lie, we believe this turn-around story has gotten a lot riskier. We’ll just have to keep an eye on it for you. See the company’s new beverage line here.
After the start of our research, EFOI had an initial run from $2.23 to $9.53, but in recent days sits in the $3 range. Had COVID-19 not arrived, we think the stock would have held its multi-bagger status. This is a great case study that shows the unpredictability of investing. Surprises and circumstances beyond your control can quickly turn a stud into a dud.