It’s been a long time I didn’t post anything, my positions changed a lot since.
Will try to update it properly later but currently :
Positions closed since last year:
Some positions opened :
Greystone Logistics is a US company producing recycled plastic pallets. Its headquarters are located in Oklahoma. It is a microcap traded on OTC QB market.
This company has been selling for some years now pallets that are made out of recycled plastic, being more ecological and lighter than classical wood pallets.
I found this opportunity because of cheap ratios and then I found some nice older analysis here (2+2 forum) and here (Nonamestocks). I advise you to read especially this last one, you will find a ton of information. My thesis is still the same and stays simple : buying growth at a cheap price.
I built my position in May 2020 and added some dollars recently.
Sales have been growing at a nice rhythm these last years :
In 2020, sales were $76.2M with a $11.4M gross profit despite the covid crisis impacting negatively the activity.
And the best part (last year is 2020 below) :
The conclusion is pretty simple: we have a super cheap growth but a high level of debt. Provided that the earning growth stays the same in the future, the debt level is tolerable.
Nothing to say here, the dip in 2020 was caused by COVID-crisis.
The company is in a niche market, a competitor could appear and take its place on the market, clients can change their mind towards plastic pallets or wood price can go down.
The recent increase in the wood price is a good catalyst for the company that will be more competitive on the market.
Disclosure : Long, bought at $0.89 in may 2020 and added some last week.
I sold MRVFF this week cause of the last quarterly report with an important net lossand bac expectations over the next quarters.
Credit Intelligence is an Australian nano cap operating in debt restructuring and personal insolvency management in Hong Kong and since 2020 in Australia.
The company employs over 30 staff, including accountants and legal practitioners, who work with financial institutions to provide creditors and debtors with customised cost-effective debt solutions. The company is benefiting from bankruptcies and from hard economic environment. The thesis here is simple : COVID crisis should accelerate its already fast expansion.
Nothing to say here, this google chart isn’t very readable.
We can see that despite the growth in revenue, the dilution is moderate.
The company purchased two companies in 2020 :
In July 2020 : Chapter Two Holdings Pty Ltd (CTH), a Sydney based debt negotiation business.
In December 2020, it acquired 60% of Australian fintech YOZO Finance Pty Ltd, a company that synergies well with Chapter two and will help the company to continue its grow through two offers :
These two acquisitions should help to maintain the current growth. The little red flag is that the last acquisition will have a diluting effect : “consideration of $1.38, 50% in cash and 50% in CI1 shares (subject to 6-month escrow), was paid for 60% of YOZO”.
Here is a recent article related to the stock where you can find more information : https://themarketherald.com.au/credit-intelligence-asxci1-the-biggest-beneficiary-from-buy-now-pay-later-profitable-and-undervalued-2020-12-17/
Disclosure : Long CI1, I bought shares some weeks ago at 0.028 AUD.
I will disclose all my holdings this year. Some hints about the black lines :
You can use the comment section to tell me what you would like me to start with.
Credits : Google.com, Yahoo Finance, ci1.com.au.
FitLife Brands is a US company specialized in nutritional supplements. The company sells its products through a partnership with the GNC franchise and online (ebay, Amazon).
The company has a strong growth but might encounter an issue due to the recent GNC bankruptcy (June 2020). Regarding the Q3 results, the management surprisingly announced that the bankruptcy shouldn’t have an impact on the company and could even be a positive factor. Here is the reason : “Almost all of the Company’s revenue from GNC relates to product sold in GNC franchise locations. As part of the bankruptcy process, GNC has announced plans to close a significant number of its corporate stores. While a small number of franchisees have also elected to close their stores as part of the bankruptcy process, the Company believes that the closure of a significant number of corporate locations may drive increased traffic to the remaining franchise locations, benefiting our franchise-exclusive brands.”
So we have a micro cap with strong ratios considering the year over year revenue growth.
In 2018 and 2019 the management cut the expenses, this resulted in a positive net income while revenues stayed the same.
On the last quarterly results we can see that the COVID-19 impact was important but that revenues were almost the same as Q3 2019.
What do we expect in the future?
We expect that the growth will continue as mentioned in the August press release where I underlined two very importants points :
Looks like the July revenues are pretty encouraging for the future!
Using the MarketScreener website information we can see that the CEO owns 7.3% of the shares, he stopped buying in 2019 at $9.75. However, SudBury Capital Managment is also owned by Dayton Judd, meaning that he owns 51.3% of the company.
CEO’s interests should therefore be aligned to the ones of the shareholders, even if it wasn’t always the case in the past (see the good Seeking alpha article from here or in pdf below). This article is very interesting and will bring you more depth in the recent history of the company.
Disclosure : Long FTLF, I bought shares in May at $10.51.
This is my current Portfolio. We can notice my first (and fast) 2,5-bagger with the rally of Intrusion caused by a potential huge contract (dig into their last Press release if interested).
Credits : OTC Market, Seeking Alpha (article written by Maarten Pieters whom I recommend to follow for his nice analysis), MarketScreener.
Gevelot is a French company operating in oil and gas industry. This company is profitable, it’s still growing and it’s incredibly cheap (share price trades under net cash). The growth rate was even better a couple of years ago but the company sold one of its bigger branches (Extrusion) in 2017 (explaining the last rally towards 220€/share).
The company has a negative EV and is profitable. Net cash is way superior to market cap. Debt is very low. That’s all.
Share price was stuck during two years and then plunged from 200 to 140€ during the COVID-19 pandemic creating a big discount over cash. The company management has announced in the last annual report that 2020 results will be impacted by the pandemic but the net results should remain positive.
The company and its insiders don’t own any shares. More than 66% of the shares are controlled by SOPOFAM and ROSCLODAN and other societies.
The company is profitable and it’s quoting under net cash. The upside potential seems limited but we have a good margin of safety.
-> Bought at 149.8€.
My objective is 200€/share, which is still under Net cash/Share.
Bonus : Current Portfolio
Reworld Media is a French company specialized in press and digital thematic media. It’s ranked as 1st thematic press publisher and 4th digital thematic media in France. The company was founded in 2012 and acquired many famous press brands since then. Some of its famous magazines are Closer, Marie France, Science & Vie, Grazia, Auto Plus, Télé Star.
The float is about 40% and the management owns 24% of the company.
Financial Ratios:
-> So pretty solid ratios but a negative FCF and a debt level to monitor.
Let’s check the last financials statements :
These results are still pretty good and should provide good return over the long term. The Mondadori France acquisition was financed with a 93.3M€ debt and with share dilutions of 10M€ (April 2019) + 12.6M€ (December 2019). The company also bought football.fr and sport.fr in late 2019.
In 2012 share price was 0.05€ 😮
Now let’s take a look at the main thing: over the last 7 years, the total number of shares has more than tripled through capital augmentations. I have to confess I discovered it after I had already bought it… Such a mistake… but oh well now I know I have to check it before buying.
Reworld Media owns 40.2% of Tradedoubler, a Swedish company (operating in various countries) whose market cap is USD13.8M, representing 1.8*0.4 = 5.55 Million USD. I didn’t find any information about the others companies owned by Reward Media since they all seem private.
In March 2020 the company announced they had doubled audience on their sites with 40% more time spent on their sites.
We have a fast growing and a fast expanding company using debt and dilution to expand. Last year results were very good. Let’s summarize the pros and cons:
It might be speculative but the company is still growing well and the future of digital press is promising.
-> Bought at 1.95€.
Disclaimer : This analysis is just my own opinion, I’m not a financial advisor, I did my own research that might have flaws.
Portfolio as of June 14, 2020.
Intrusion is a US company specialized in cyber-protection. It provides various softwares related to entity identification, data mining, cyber-crime prevention and advanced persistent threat detection. Its clients are the US government (federal + locals entities), banks, credit unions and other financial institutions, hospitals and other healthcare providers, and many more.
The company was founded in 1995 and is located in Texas, it currently has 32 employees.
Financial ratios :
So we have a growth rate > PER (like Peter Lynch likes) with a decent debt to equity ratio.
The CEO of the company is Jack B. Blount. The Plaxton family controls about 30% of the shares.
I didn’t find any recent insider activity except for the option exercise.
I bought this position one month ago at $4.00 per share. It’s still cheap at $5 according to me.
Image Credits : intrusion.com, OTCmarkets.com, Google.com
Disclaimer: I am not a financial advisor. All this site content is for entertainment purpose only.
Nuvo Pharmaceuticals is a Canadian healthcare company specialized in pain, allergy and dermatological products. It’s a nanocap mainly selling its products in the US, Canada and Europe, and it’s recently had an agreement with Japan. Its main products are Blexten (antihistaminic), Cambia (anti-inflammatory) and Pennsaid (a local NSAID).
Here are some products/drugs they sell (Aralez Pharmaceuticals is owned by Nuvo, see below):
The stock is listed on two places :
The company is a nano cap with a high growth potential, let’s take a look at its financial ratios (using USD 0.57 per share, and 2020 Q1 results):
And using the last annual report we have :
So the stock is super cheap and revenue is nicely growing BUT debt level is high (see below).
The reason that brought me to this company is the massive increase of revenue last year:
The growth was confirmed for Q1 despite COVID-19. We can notice the Q1 revenue surpasses 2018 full-year revenue:
The management seems to be confident about the future, the prescription of their drugs increased and they wrote in Q1 report about Blexten and Cambia:
“Revenue related to these products was $6.0 million, an increase of 94% compared to revenue of $3.1 million for the three months ended March 31, 2019. Canadian prescriptions of Blexten and Cambia increased by 54% and 30% respectively compared to the three months ended March 31, 2019.”
Net income was USD 0.12 per share for Q1 2020.
We can read in the annual report that the 2019 growth was attributed mainly to one acquisition: Aralez Pharmaceuticals (the last owner of Blexten and Cambia). The acquisition cost $110M and was financed as follows:
Here are the advantages of the deal as described by the management :
So the company has to reimburse a big debt but this acquisition seems worth it with the increase of Blexten and Cambia revenue.
If you read the Q1 report you will notice the expansion keeps going: some of their drugs have recently been accepted in Switzerland and Japan and others are on the way to being approved by Health Canada.
We are close to a 5-year low, the market didn’t react that much to the revenue increase:
Mr Ledger is the CEO of the company, we can see he has been buying shares in small amounts these last days:
The impact of the COVID crisis should be limited as the company is still running during the pandemic. This is what management wrote about it :
The Company is proactively managing the COVID-19 pandemic. The Company operates as an essential business, as defined by both the Ontario and Quebec governments. As such, the Company has made changes to operations to ensure our employees are safe and healthy, while the business continues to operate, including supplying global partners, wholesalers, pharmacies, and ultimately patients, with our healthcare products.
Pro : Nice growth perspective, low valuation, huge upward potential.
Cons : Debt, Debt and Debt. If the company cannot maintain its growth rate (and people stop buying their products), dilution could happen or worse.
A little tip: if you’re planning to buy it, you can do some arbitrage (it’s a nano cap, the price isn’t fairly balanced every time). Check the stock price in CAD or USD then convert into the other currency and choose the lowest price.
-> Purchased shares at USD$0.55
Image Credits : Nuvopharmaceuticals.com, OTCmarkets.com
Disclaimer: I am not a financial advisor. All this site content is for entertainment purpose only.
Jacques Bogart is a French company specialised in the design, manufacture and marketing of luxury perfumes and cosmetics. It sells some famous brands like Chevignon, Ted Lapidus, Carven, and its own brand Jacques Bogart.
The company sells mainly in France and Germany though physical stores but it’s also present in Israel, Belgium and Luxembourg. It has recently made some acquisitions that led to its expansion, the biggest one being Distriplus in the end of 2020.
The company has a low float and it is mainly controlled by the Konckier family. Under the French law Loi Pacte if a shareholder owns more than 90%, the company can go private with shares being purchased at a premium price (remember this point!).
Let’s now take a look at the current ratios :
I didn’t post others ratios because we don’t have a full financial report for now.
However, we have this :
EBITDA increased by more than 2.5x last year! All of this despite Distriplus being operational for only several months in 2019. So before COVID perspectives were very good.
For FCF, the last press release mentions a nice increase:
Other financials ratio are ok and the company secured cash before the crisis (and still plans to make other acquisitions if given the opportunity).
We can notice that the big drawdown due to COVID has not yet recovered:
We don’t know how exactly the current crisis affected the company; here is what management said about the COVID impact in the last press release:
Remember the Konckier Family owns 88% of the company and a 90+% ownership of a company means that the company can go private with shares being purchased at a premium price.
The company bought back its own shares from September to December 2019 as follows:
We don’t have data about early 2020 except this:
With this big transaction, the Konckier family now probably owns more than 90% of the shares, allowing them to turn the company private.
What am I expecting with this stock? Well there are two options imo:
Risks : If pandemic continues and there is a second wave, the closing of stores over the long term can damage the company revenues.
-> Long, purchased at 7.00€
It’s almost the same price of the last buyback: it adds a little security to the investment (if they bought it at this price it probably means it is not overvalued).
Images credits : groupe-bogart.com, google.com
IVFH is a nano cap operating in the food distribution area. The company consists in a holding of different food related companies. Here are some of its holdings :
I found the company browsing the OTC Markets website and stopped because of these ratios (calculated with $0.35/share) :
…associated to a revenue grow of almost 20% per year in the last 5 years!
So what’s the catch?
The number of shares outstanding has been stable over the last years, the company is active and it communicates well. Well I don’t find the catch!
The COVID crisis seems to be having a moderate impact on the company, here is the statement of the CEO Mr Klepfish (he owns 5% of the company) on 24th March :
“We are currently experiencing surging ecommerce sales at igourmet.com and mouth.com for a variety of specialty food categories including higher demand for themed food kits. Simultaneously, ecommerce sales have significantly accelerated for our specialty grocery products offered through our other online channels including amazon.com and walmart.com.
Strong direct-to-consumer sales are partially offsetting reduced specialty foodservice distribution revenue experienced as a result of the affects the COVID-19 pandemic on the restaurant, travel and hospitality industries. Based on current information, we expect our cash balances on hand, plus availability under our existing credit line, to provide sufficient liquidity to manage the business, while supporting the surge in ecommerce demand. As part of our multi-channel distribution strategy, we have continued to expand our platform to serve evolving specialty food buying trends. We anticipate a continued shift towards ecommerce channels and our unique food distribution model has allowed us to quickly expand our ecommerce offerings, while seamlessly adjusting resources and products from our foodservice business to keep up with recent specialty grocery demands.”
So it’s ok for me, the company will survive + it can expand targeting new consumers and should continue to grow. The company has low debts, which is nice during these hard times.
Let’s have a look at insider activity :
No new trades in 2020 were reported, but amounts purchased in 2019 are fine.
-> I purchased shares at $0.35.
Disclaimer : This analysis is just my own opinion, I’m not a financial advisor, I did my own research that might have flaws.
The company published its 10-K and exposed COVID effects on its sales.
Total revenue increased 9.4% to $57.9M, compared to $52.9M in 2018, a much lower percentage than for 2018/2017 were it surged 28%. Net revenue per share is $0.01. FCF is negative this year, cash level is $4M compared to $4.8M last year.
Here is the revenue repartition per activity :
For conclude I’m a little bit disappointed by these results but if e-commerce turn works well and consumers still there after end of lockdown it should compensate lost of revenue of traditional foodservice domain.
Feel free to comment 😉
Disclosure : still long IVFH