GEO Investing

spcb digital identity buy rating price targetYesterday after the close, B. Riley initiated coverage on SuperCom Ltd. (SPCB) with a buy rating price target of $17.75.

SuperCom provides traditional and digital identity solutions to government, private and public organizations worldwide. GeoInvesting continues to hold shares from a trade initiated on March 27, 2015, a trade disclosed via our email call to action to premium members. Subsequently we added more, disclosed via tweet on April 9, 2015:

“SPCB, nibbling at trading shares on what looks to be a mini technical breakout. #GeoCallToAction”

Here is a recap of the evolution of our SuperCom diligence:

  • On 7/1/2013, we began tracking SuperCom due to positive commentary from its fourth quarter 2012 press release, when the stock was trading at $0.52. (pre reverse split, $2.21 adjusted)
  • On 1/3/2014, we initiated our long position at ~$4.85, based on the company’s transformative acquisition.
  • The stock had solid run, reaching a high of $14.15 on 10/29/2014.
  • Momentum was abruptly interrupted when a Seeking Alpha author published a bearish article on the company, stating that SPCB would see diminished growth in the near future. The stock retraced off its highs reaching $7.01 on 1/27/2015.
  • On 1/21/2015, SuperCom issued 2015 guidance but failed to issue any specific Q4 2014 guidance. The lack of Q4 financial guidance led to some near term uncertainty, pricing in additional uncertainty, even though 2015 guidance was strong.
  • On 3/26/2015, SuperCom reported that Q4 2014 earnings were below market expectations. We stated that if investors pushed shares lower due to missed estimates, we felt the strong 2015 guidance provided us with confidence to add shares on the drop. The stock subsequently fell from ~$9.00 to $7.20.
  • On 3/26/2015, we were on the Q4 conference call seeking an information arbitrage opportunity on information possibly omitted from the press release. We quickly sent premium tweets detailing management’s commentary of a possible contract win, share buyback and critical comments by the CEO, stating “If not for blackout period, I would be buying shares.”

SPCB Buy Rating Price Target

SPCB has rebounded off lows and 2 analyst have initiated coverage; one with a buy rating price target of $16.00 and the other with a buy rating price target of $17.75 some time after Q4 2014 results were announced.

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