Update – back from hiatus

I haven’t updated the blog in a very long time. I have still been investing and finding treasures in the market, just didn’t know if I wanted to keep the blog running. But I’m back to writing and will be updating the blog going forward.

I’ve updated my performance page and portfolio. Since the last post (in Sept ’15), lot of changes have happened with my holdings. Here is a quick note on the current holdings:

Bewhere Holdings (BEW): This is a venture start-up but in the public markets. Owen Moore had done a start-up in a similar space and sold the company for a nice profit. He created a start-up in the vehicle tracking space and sold it. Bewhere is his second go in starting a company in a similar space.

Bewhere creates tracking devices that included sensors. The beacons can be used on multiple different scenarios (Brinks is in process of installing it for the trucks, beacons are used on emergency devices to track where the equipment is, beacons were used in an agriculture setting). The initial beacons are bluetooth based as the technology allowed the devices to be cheaper then RFID. The next version is made for LTE (cellular). This is a much bigger market as the telco companies really want cellular beacons that will increase cellular usage and revenue. The cellular devices are currently in process to be approved by the 2 big US telco, approved by Bell Canada, approved in Mexico, and going through testing in Europe. Once the testing is done and the devices are approved, the cellular companies can sell these beacons. The cellular devices will created recurring monthly revenue for the telco and Bewhere.

The company is just starting to show the revenue and mgmt has stated they expect to double revenue sequential quarter-to-quarter for the next 3-5 quarters. This is going to be a fun one to watch as revenue starts showing and investors start noticing the potential.

HemaCare: This is one of my favorite holdings. The company is not followed by any analysts, the mgmt doesn’t put out quarterly financials (semi-annual only), mgmt doesn’t talk with anyone, and company has no need for capital markets. All the while the market for their product is growing rapidly, they are well positioned in the bourgeoning cell therapy market, revenues have been increasing at a high double-digit pace, new facility has 2.5x the current sq footage, and very few shares available.

The company sells human blood products to the pharma industry. They have a long history in this space but in the last 5 years the new management team has sold underperforming assets and grown the services focused on blood products. The company is growing rapidly (40-50% rev growth), has huge advantages on its competition (FDA approval for their collection site and procedures), strong relationships with the growing cell therapy industry (board member who ran the cell therapy division at big Pharma). The company is a hidden gem in a growing industry.

Enservco: This is a special situation in the oil services industry. The company was fortunate to survive the recent oil industry and now get stronger with a new management team. The company was hit hard by the oil down turn in 2014 and a poor decision by old management to increase capacity by acquiring new assets right before the down turn. But with a large fund holder (Cross River) and new management team, the company is poised to come out much stronger. The new management team has already dealt with the debt issue (extending the $30M debt and getting more capacity). The company has also been increasing the offerings and making it less seasonal. Overall we think is a classic deleveraging play but with better upside given the asset acquisition done in 2014. The market is currently sleeping on this one but it won’t be too long before people wake up to the turnaround.

Valeura Energy (VLE): This is a high risk/reward oil drilling play. Although we think the risk is capped by the proven shallow drilling and infrastructure assets the company owns. The upside is from the deep drilling that the company is doing with Statoil. The play is for natural gas in Turkey. The gas prices in Turkey are much better ($6.50+) than in the US. This is a huge find if it is a success, a big enough find that a company the size of Statoil would be interested in. VLE sold 50% of its deep drilling rights to Statoil in return for Statoil taking on the drilling and 3D mapping costs. So far the results look very promising. We should get the results of the first deep drilling test in 60 days.

Undisclosed: This one will remain undisclosed for now. All we can say is it is a resource play. The company has a tiny market cap ($6M) but there is a lot that is happening based on the recent PR activity. Plus we have seen the CEO acquire millions of shares in the public market in the last 4 months, clear indication something big is coming.


3 responses to “Update – back from hiatus”

  1. What happened to XPLT? I think the outlook is as promising as ever! Beginning to show they can drive operating leverage and stock trading at pre-3M settlement levels. This is a highly undervalued stock in an inflated market!

    • Completely agree with you on XPLT. When I sold out at Xpel, it was because I knew the litigation would take a while to resolve. I’m surprised with the issues the company has faced post settlement: exchange rates, expansion in Europe, inventory issues, acquisition costs. But through it all the revenues has grown at a solid rate, the company has held their 30%+ market share, expanded international, and grown in other markets. I really like their “closer to customer” initiative and the recent bundling the software+film pricing. I think the later is going to be huge benefit to earnings and will lead to more market share.

      I really like Xpel and will likely be buying a big position soon (waiting for VLE to work out).

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