Singular Research Director’s Letter : March 2018

Tough Talk Reverses Rebound

After experiencing an impressive bounce from the prior month’s sell-off, equity markets staged a short-lived rebound that was squelched by fears of a trade war between U.S and China. Although the trade banter has simmered, new anxiety has arisen regarding higher secular inflation and aggressive moves by the special council against Trump. Moving into April, market participants await q1 eps reports to match vs. high expectations as the apex of good news on earnings is feared while eps growth vs. rising rates battle continues.


March’s top performers were led by eps beaters and a couple oversold bouncers. As our coverage list and the R2K showed a positive divergence from a decline of over 3% in the S&P 500. Will this become a trend? Too early to detect a change in leadership as of press time. NV 5 Corp. (NVEE), up 28.9% in March, blew away our estimates and CEO Dickerson Wright attested to the strongest operating environment he has witnessed in many cycles. Trecora Resources, (TREC), recovered from a plant shutdown and benefited from a strong lift in operations to beat eps estimates by a wide margin. A-Mark Precious Metals Inc, (AMRK) aided by increased concerns of trade wars and a subsequent increase in market volatility, posted a 10% gain in March.

The worst performer list was largely impacted by disappointing eps reports and/ or guidance. NMI Holding, Inc, (NHIM) was hit by market fears of higher rates and an imminent peak in housing starts. Salem Media (SALM) continued to battle a secular decline in industry fundamentals while it struggles to beat estimates. Acme United (ACU), our inaugural pick , at $9 when we incepted over twelve years ago, while continuing to execute its successful growth plan over the long term, has experienced some occasional bumps, including some execution adjustments as it transitions to online marketing.

In March, we dropped coverage on Vasco Data Services, (VDSI), as it continued to struggle with a transition from a hardware to a software based business model , missing estimates consistently over the last twelve months. We initiated coverage of Olympia Financial, (OLY.to) an Canadian based financial services company with a diversified array of growing products and services with a Buy-Long term rating.

At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage to add alpha for our active institutional following. We thank our clients for your support of independent equity research.

 

Singular Staff

Singular Research Summer Solstice 2018 Conference, Philadelphia PA

Singular Summer Solstice 2018 Conference

July 19th, 2018

Philadelphia, Pennsylvania

“The only performance-based conference in the small and micro-cap space – 

supported by unbiased research since 2004.”

 

 

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Lawrence Kudlow to Become Trump’s White House Economic Adviser

Robert Maltbie & Singular Research for appointment to Trump team.  Watch “Larry Kudlow interview Sept 22, 2016 : “How to Grow Again” on YouTube.

 

Singular Research Director’s Letter : February 2018

Hello Volatility

After a near two year hiatus, with the VIX trending at the historical low end of 11-14 bp level, volatility exploded after an employment report showed higher than expected wage growth, pointing to higher interest rates. All the leveraged short vol funds took a huge hit that send shock waves into the broader equity market, creating the first 10% sell-off since early 2016. Better than expected earnings and upward revisions and positive economic news led the markets to recoup to only a 3-4% down draw for February.

February’s top performers combined good eps reports with lower valuations to buck the stiff sell–off. Our top performer was NMI Holdings, Inc.( NMIH) + 8.17%, a mortgage insurer riding the housing recovery. Hennessy Advisors Inc. (HNNA) +4.36%, an undervalued micro-cap posted good earning while our analyst increased his price target . New York Times Co. ( NYT), a short call went against the grain, posing an earnings beat extending the Trump Bump to readership growth.

The worst performers list had some large down draws. Led by Huttig Building Products, Inc. (HBP) -27 %, this suffered from an unexpected departure of its CFO. Next in line was Anika Therapeutics Inc. (ANIK), -22%, hit by tepid guidance and the retirement of its CEO and founder. Finally, dropping over 17%, A-Mark Precious Metals, Inc. (AMRK) missed estimates due to the low volatility in metals, combined with higher than expected acquisition costs.

We are excited to announce new coverage on LSI Industries Inc. (LYTS), a designer of LED indoor and outdoor lighting systems servings retail and industrial sectors. LYTS posted a better than expected quarter last month, led by a new management team and new product offerings. Also, we launched coverage on Full House Resorts Inc. (FLL), a micro-cap Hotel and Casino resort operator that trades at a significant discount to its peers and is also in the process of a major turnaround. At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage to add alpha for our active institutional following. We thank our clients for your support of independent equity research.

 

Singular Research 

Singular Research Director’s Letter : January 2018

Out of the Box Hot!

As the adage goes, as goes January as will be the year. Thus, we remain encouraged, hoping earnings can continue to lift already lofty valuations. Indeed, aided by lowered corporate tax rates and lessened regulatory burdens, we have much too support encouraged animal spirits. Still, we suggest selectivity and valuation vigilance as the FED is looking to renormalize the rate environment with the hint of perhaps, several hikes in 2018, suggesting a possible push-pull between higher rates vs. higher earnings.

Meanwhile, small caps continue to lag as investors still favor large cap and accompanying ETF’s extending last year’s leadership forward into 2018 thus far.

 

For the top performing companies in January on the Singular Research coverage list, a common theme was biotech, led by HBIO, ANIK & IGXT. Harvard Bioscience (HBIO) announced a major acquisition that should lift growth prospects and margins while shedding a low margin, underperforming division. Whereas Anika Pharmaceuticals, lacking an apparent fundamental catalyst, seems to have benefited from a rebound in the Biotech sector spurred by investor allocation to ETF’s. Transcat, (TRNS), got a nice boost from beating estimates from the 2 analysts (including Singular) that follow it.

The worst performing  stock on the Singular coverage list during January was  by our wrongheaded short call on New York Times, (NYT), which continues to delight with its digit revenue growth results spurred by a long-lived Trump bump. Clear One (CLRO) endured profit taking reaction from a 25% up move in December. It remains an attractive long-term value still trading around book value.  Arlington Asset Investment Corp. (AI), surprised the street with better than forecast results and rebounded from an oversold condition that took it below NAV to a 5 year low.

We continue to work on new ideas and plan to launch coverage in the coming weeks on one or several new names. At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We thank our clients for your support of independent equity research.

 

Singular Research 

Sidoti & Company Spring 2018 Investor Conference: New York Marriott Marquis

March 29th, 2018

New York City, NY

“The only performance-based conference in the small and micro-cap space – 

supported by unbiased research since 2004.”

 

 

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Midwestern Values 2018 Conference Dallas, Texas

Dallas Midwestern Values 2018 Conference

September 20th, 2018

Dallas, Texas

“The only performance-based conference in the small and micro-cap space – 

supported by unbiased research since 2004.”

 

 

Please fill out our form below to express your indication of interest and be notified when additional details are formalized.

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BOTU 2018 Conference Announcement

Singular Research 13th Annual “Best of the Uncovered” Conference

December 13, 2018
San Francisco, CA

 

“The only performance-based conference in the small and micro-cap space – 

supported by unbiased research since 2004.”

 

 

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Singular Research Director’s Letter : December 2017

A solid year for large caps small caps continue to lag.

The Singular Research coverage list out performed up 1.64% in the month of December. Still, this was not enough to catch up to the strong outperformance again registered by large caps. With growth lead value by a stunning 13% in most asset classes.  The Singular list was up 7.3% trailing the Russell in S&P due to its micro-cap value Focus.

SINGULAR MONTHLY PERFORMANCE STATISTICS

 

Last Month

YTD

Trailing 12 Mo’s

SINGULAR LIST

1.64%

7.30%

7.30%

S&P 500

0.98%

20.79%

20.79%

RUSSELL 2000

-0.56%

13.17%

13.17%

 

The silver lining for micro and small caps may have been the Trump Administration and Congress’s passage of the tax cut package which should benefit small caps on the margin more than big caps providing a basis for outperformance in 2018.

The Singular Research list was led by Clear One (CLRO) up 26.9% in December. After falling to book value from a very oversold condition CLRO benefited in anticipation of patent awards for its video and audio technology. Gray Television   (GTN) bounced 16.3% up from its large secondary stock offering that was used to pay down debt. Stamps.com (STMP) rose 11.6% in anticipation of a strong Christmas selling season.

 
Symbol Rating Target Month Return
CLRO BUY  $  13.00

26.9%

GTN BUY  $  18.00

16.3%

STMP BUY  $250.00

11.6%

 

Laggards were led by Biolase (BIOL), down 14%, which may be due to heavy tax loss selling as the stock has underperformed in 2017. Control 4(CTRL). was down 10.5%, likely some profit-taking consolidating a more than 200% move up from early February this year. 

 

WORST PERFORMERS FOR THE MONTH
 
Target Month Return
 $ 2.00

-14.0%

 $ 28.00

-10.5%

 

WORST PERFORMERS FOR THE MONTH
       
Symbol Rating Target Month Return
BIOL BUY  $    2.00

-14.0%

CTRL SELL  $  28.00

-10.5%

 

Thank you for your continued confidence and support as we will continue to seek to uncover the forgotten, the forlorn and the misunderstood in 2018. Hail to Alpha.

 

Singular Research 

Interview with A-Mark Precious Metals Inc. (AMRK) at New York Conference Dec. 4, 2017

  • A-Mark Precious Metals Inc. (AMRK)