Singular Research Director’s Letter : January 2017

Post-Election Equity Market Euphoria Continues

The two month equity market rally began to take a breather when the Fed raised interest rates in December. We anticipate several more tightening moves by the Fed in 2017, driven by an uptick in the pace of economic growth. In closing out 2016, manufacturing activity and construction spending metrics have shown surprising strength – we view this as further confirmation the US economy does not need any more monetary stimulus to be self-sustaining. Expectations of a more favorable business environment from the incoming administration are adding support to the recent rally, in our opinion. We anticipate business investment and infrastructure spending to increase in 2017. The combination of these events points to continued bullishness in the US equity markets over the intermediate term. Small and micro cap indexes have begun to outperform the broader equity market in the past few months after a few years of underperformance. We expect this trend to continue through 2017. Our proprietary market overview aggregate, the MMI, has moved into neutral territory after the recent equity market run.

For the companies on the Singular Research coverage list, most of the top performing group in December reported a Q3 that was above expectations, and some of the names responded strongly after a few months of rather weak performance. Harvard Bioscience (HBIO) was the strongest performer in December after a weak November. HBIO develops and markets scientific equipment and consumables that are used in medical research, with strong brand name recognition in the industry. Emergent BioSolutions (EBS) reported much better than expected revenues and earnings, and the stock has rebounded in December after a weak November. Century Casinos (CNTY) has been performing well in the last few months after languishing for several months, and our analyst forecasts strong EPS growth in 2017. A-Mark Precious Metals (AMRK) is rebounding after lackluster performance for a few months, and the company is positioned to benefit from a healthier environment for small to mid-sized companies in 2017. Acme United (ACU) reported a very strong Q3.

The worst performing group of the Singular coverage list during December have several hidden gems that we anticipate will perform well in the next year. The worst performing stock of the coverage list, AMRS, was a new initiation for Singular in September, and the stock performed exceptionally well in October. The company has several products in the pipeline with favorable long-term implications and our analyst remains very bullish on AMRS. SA released two very favorable reports critical to mineral development. Both the Preliminary Feasibility Study and a Preliminary Economics Assessment demonstrated improved project economics on its mining assets. IRIX had a weaker than expected Q3 as the company invests in its production capacity and marketing which our analysts expects will drive margin expansion in 2017. NVEE corrected after a strong November and our analyst expects strong revenue and earnings growth in 2017. LAKE beat our analyst’s expectations in Q3, and is anticipated to have strong earnings growth driven by double digit revenue growth and margin expansion in 2017.

We initiated coverage of two companies in December, Black Hills Corp (BKH) and Daktronics (DAKT). BKH is an electric and natural gas utility company covering several states including Colorado, Wyoming, Nebraska, Iowa and Arkansas, among others. The company is a low cost producer and is developing renewable energy sites. DAKT is the leading supplier of large electronic scoreboards with commercial and live event markets driving over 60% of revenues. Margins are expanding as revenues grow in the upper single digit range.

At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We are working on several new names that we anticipate coverage will be launched in the coming weeks. We thank our clients for your support of independent equity research. And we wish you and your families the best for 2017.

Singular Research Director’s Letter : December 2016

December 2016 Post-Election Euphoria

 

Following a weak October, the US equity markets roared back to life after the US presidential elections. What had previously been viewed as uncertainties from a potential Trump administration during the campaign season turned into a vote of confidence for an administration that is more business friendly. It’s not hard for equity investors to favor lower corporate and capital gain taxes along with a simpler personal income tax code. But are more favorable tax rates enough for a bull rally to continue? We believe there is more to the recent equity rally. Campaign rhetoric about the current state of the economy from the president-elect was not accurate, in our opinion. The US continues to lead the world in this economic expansion – employment metrics, retail sales, and the ISM data all describe the healthiest economy since the Great Recession. Adding fiscal stimulus in the next few years from infrastructure spending and military budgets will juice up this expansion. Oh, and that potential for higher interest rates – it’s still here. We expect the first of several tightening moves by the Fed in the next year to occur quite soon. That may stall the rally, but only temporarily. Small and micro cap stocks are rebounding with a vengeance after underperforming the broader indexes for a few years. Our takeaway is the US economy and US equity markets can weather Fed tightening during 2017, particularly when it occurs when confidence is high for lower tax rates and increasing fiscal stimulus.

For the companies on the Singular Research coverage list, most of the top performing group in November reported a Q3 that was above expectations, and some of the names responded strongly after a few months of rather weak performance. State National Companies (SNC) reported a very impressive Q3, with strong revenues and good expense controls. The company is valued at a significant discount to the industry, despite its unique and favorable business lines. NV5 Global (NVEE) rebounded strongly after a few weak months. Our analyst forecasts strong revenue and earnings growth in 2017. Encore Wire (WIRE) also rebounded strongly after a few weak months and a better than expected Q3. Trecora Resources (TREC) had a weaker than expected quarter but it was mainly driven by the mining investments, and the petrochemicals business rebounded from Q2 weakness. Kulicke & Soffa (KLIC) performed well after another positive earnings surprise.

The worst performing group of the Singular coverage list during November have several hidden gems that we anticipate will perform well in the next year. The worst performing stock of the coverage list, AMRS, was a new initiation for Singular in September, and the stock performed exceptionally well in October. The company has several products in the pipeline with favorable long-term implications and our analyst remains very bullish on AMRS. SA released two very favorable reports critical to mineral development. Both the Preliminary Feasibility Study and a Preliminary Economics Assessment demonstrated improved project economics on its mining assets. HBIO was a new initiation in November, and the company has met earnings expectations. CTRP was down as a short. The stock has been weak and the market rebound caused the stock to stall in its decline. EBS reported much better than expected revenues and earnings, and the stock has rebounded after month end.

We initiated coverage of Harvard Bioscience (HBIO) in November. HBIO develops and markets scientific equipment and consumables that are used in medical research. The company’s products have strong brand name recognition in the industry, and the company is well positioned to benefit from planned increases in NIH spending. New products and recent acquisitions are expected to support revenue growth while improvements in operational efficiencies, including implementation of an ERP system, are anticipated to support margins.

At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We are working on several new names that we anticipate coverage will be launched very soon. We thank our clients for your support of independent equity research. And we wish you and your families the best during this Holiday Season.

Sincerely,
Singular Research

Singular Research Director’s Letter: October 2016

What Does the Equity Market Tell us About the Presidential Election?

 

The equity markets took a swoon in early September, with a quick recovery right after the first presidential debate. Does this tell us something about how the equity market is voting? In a most unusual presidential election season that focuses on blaming the opponent for being “un-presidential,” one may easily make varying interpretations on how the equity market is voting. One thing is for certain, equity markets do not like uncertainty. What we perceive as certain is the steady pace of slow economic growth. The flow of econometric data describe an economy that appears to be picking up steam at times only to portray slow steady growth in the following months. Labor stats were very strong in June and July only to demonstrate slower growth in August and September. The forward-looking ISM Manufacturing Indexes took a surprisingly sharp decline in July, only to recover above expectations in August (latest available). The ISM Non-Manufacturing Index, representing a larger component of US GDP, was well above expectations in September after a weaker August. A mixed bag of econometric data is what describes our slow growth economy. We expect this to continue with a propensity to push the economic growth rate higher in the coming quarters. For this reason we still anticipate the Fed will raise interest rates by the end of the year.

directors-letter-20161018a

For the companies on the Singular Research coverage list, several in the top performing group were either new initiations, or rebounding from being oversold. Amyris (AMRS) was the strongest performer in September and was a new initiation.  Our analyst is expecting very strong revenue growth from the new products including cosmetic ingredients and performance polymers for tires. The AMRS product pipeline is developed through partnerships with future customers. EBS rebounded from a tough Q2 that had several cross currents. Supreme Industries (STS) is a new initiation that is undergoing strong revenue growth and expanding margins in serving the truck manufacturing market. Century Casinos (CNTY) had a tough Q2 but is executing on its growth strategy. INTL FCStone (INTL) reported strong operating profit which drove the large earnings beat in Q2.

directors-letter-20161018b

The worst performing group of the Singular coverage list during September has several that missed Q2 estimates but also have good performance potential in the coming quarters. The worst performing stock of the coverage list, IGXT, was a very strong performer in August, and has several new products that will likely come to market in the next 24 months. GTN reported earnings below our analyst expectation in Q2 but exhibited good cost controls, and is a likely benefactor of increased advertising revenues in Q3. MGIC reported Q2 that was below analyst’s expectations. GDDY missed EPS expectations, and as a short this can typically drive outperformance. Wall Street analysts are supporting the company driven by the potential for investment banking business, in our opinion. Our analyst anticipates significant dilution in the coming year as the majority holders, which have several inherent conflicts of interests with common shareholders, sell stock while the valuation is at lofty levels that the fundamentals do not support. SALM beat earnings expectations but slow revenue growth in Broadcast during the election year was disappointing.

directors-letter-20161018c

At Singular Research, we continue to seek out investment ideas that have minimal to no Wall Street coverage. We recently launched coverage on three new names in September, while dropping coverage on others. We thank our clients for your support of independent equity research.

The 11th Annual Singular Research Conference, the Best of the Uncovered’s, was held in Los Angeles in late September. Our focus on quality companies with attention on 1-on-1 meetings for corporate management and institutional investors was demonstrated. Our conferences are not for the masses, our focus is on serving our institutional clients, and feedback from the conference is very positive. If you missed the conference or missed meeting one of the presenting companies, please contact your Singular Research representative for information. Many of the presentations were recorded.

Singular Research Director’s Letter : July 2015

Small Caps Continue Their Strength

Against the seemingly eternal backdrop of Greek-EU discussions, small caps continued to outperform their larger cap peers.  Given that smaller companies tend to be less exposed to foreign issues such as disrupted end markets and currency swings, we find the outperformance to be no surprise.  Taking this approach one step further, astute stock picking, as evidenced by the outperformance of the Singular list during June, can generate meaningful alpha despite the negative macro chatter.

Beyond the macro theater, US economic conditions appear positive on the whole although not without some data points here and there that can muddle investors’ thinking.  Additionally, as the market had come to expect, the FED put off raising interest rates.  Going back a number of months, the market was initially expecting a hike in June, so this was certainly a positive for the market as many see the extension of low rates as providing more runway for the economy to gain steam.

dir-ltr-201500706a

Recapping the table above, for June, the S&P 500 was down 2.38%, the Russell 2000 was up 0.37% and the aggregate Singular List was up 3.14%.  For the trailing twelve months, the S&P was up 6.41%, the Russell 2000 was up 10.5%, and the Singular Research List was up 1.6%.

Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was Salem Communications (SALM).  The company operates radio, print and internet media properties focused on “conservative” Americans.  As is the case with many media companies, election years see a surge in advertising revenues as candidates press their cases.  With campaign spending hitting astronomical levels and a crowded Republican field heading into 2016, we expect SALM to be a beneficiary.  Looking at the rest of our Top 5 performers, both SPCB and VDSI are “security” plays and their strong performance comes as no surprise given the proliferation of hacking and data breach incidents.

dir-ltr-201500706b

Our worst performers in June saw their monthly returns driven by various factors or, in some cases, the absence of anything positive to push shares higher.  In particular, our worst performer was Comstock Mining (LODE).  Although the company had no news during the month, gold trended lower and as a result, LODE did too.  VTNR saw its shares slide as the company conducted a large equity raise in order to shore up its balance sheet and satisfy a recent debt covenant amendment.

dir-ltr-201500706c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage.  There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge.  We thank our clients for your support of independent equity research.

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : June 2015

Strong May Bodes Well

 

Pondering the old adage of “sell in May and go away” we also saw it noted on Bloomberg TV recently that when the market posts a positive May, the ensuing May to October period tends to produce positive returns.  Perhaps this boils down to May serving as a litmus test on the market’s opinion on year end and Q1 earnings reports which consume much of the February to May period.  If those reports are of a positive flavor and investors expect similar performance over the balance of the year, then they are likely to be post-earnings buyers, fueling a positive May with further follow-through as the summer progresses.

With this thought in mind, we see that May was positive for both large and small caps, with the Singular List outpacing both benchmarks.  Certainly some of this positive tone stems from the general consensus that the FED will not raise rates in June but as that specter still exists, we don’t believe it accounts for all the gain seen in May.  To wit, as we look at our coverage universe we see a variety of solid fundamental reasons for optimism.

dir-ltr-201500601a

Recapping the table above, for May, the S&P 500 was up 1.4%, the Russell 2000 was up 2.38% and the aggregate Singular List was up 2.41%.  For the trailing twelve months, the S&P was up 10.91%, the Russell 2000 was up 10.95%, and the Singular Research List was down 2.27%.

Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was Vertex Energy (VTNR).  The company is finally seeing the light at the end of the tunnel following a rough stretch resulting from the recent slide in oil prices.  As we have noted in our research, we feel the company has quality management and the weakness we have seen marks a quality entry point for long term investors.  Looking at the rest of our Top 5 performers, Top Ideas for 2015 list member CMT appears again as a repeat top 5 name from last month.  Other names on the list saw gains primarily driven by quality Q1 earnings reports.

dir-ltr-201500601b

Our worst performers in May saw their monthly returns driven by various factors or, in some cases, the absence of anything positive to push shares higher.  In particular, our worst performer was Tessco (TESS), which reported fiscal Q4 results that were a disappointment.  Even so, our analyst remains confident in the long term potential for the company and feels the current weakness represents a buying opportunity.  Other names on our worst performers list, such as IGXT and LODE, are lower-priced stocks and thus a few penny price swing can drive a percentage move large enough to land the stock on our list despite the absence of anything negative.

dir-ltr-201500601c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage.  There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge.  We thank our clients for your support of independent equity research.

 

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : May 2015

Small Caps Limp to the Finish Line

After remaining fairly level throughout much of April, small caps fell roughly 4% over the last four trading sessions of the month. While also down over the last few days of the month, larger caps did not suffer as severe a drop. Given that small caps have outperformed year to date, perhaps the move was something of a mean reversion. Additionally, the old adage “sell in May and go away” has begun making its rounds in the media. Investors hewing to this advice may have responded by closing out positions into the end of April.

Although the small cap index, as represented by the Russell 2000, fell into month end, there are still plenty of opportunities in the market. Most large cap companies have now reported Q1:15 earnings but small caps, on the other hand, often report in the first two weeks of May, ahead of the mid-month reporting deadline. With this in mind, identification of companies that are poised to deliver positive earnings reports offers opportunity to generate alpha.

dir-ltr-201500504a

Recapping the table above, for April, the S&P 500 was up 0.75%, the Russell 2000 was down 1.19% and the aggregate Singular List was up 1.89%. For the trailing twelve months, the S&P was up 10.11%, the Russell 2000 was up 4.88%, and the Singular Research List was down 5.56%.

Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was recent initiation Supercom (SPCB). The company announced earnings results for its fourth quarter toward the end of March and the shares have continued to run since then, driven by continued attention on the internet security space. Looking at the rest of our Top 5 performers, Top Ideas for 2015 list member CMT appears again as a repeat top 5 name from last month. Other names on the list bucked the overall result for the Russell 2000, driven by a variety of factors.

dir-ltr-201500504b

Our worst performers in April saw their monthly returns driven by various factors or, in some cases, the absence of anything positive to push shares higher. In particular, our worst performer was Vertex Energy (VTNR). The company is required to issue new equity as part of its recent credit agreement modification. With that overhang present, investors have little near-term motivation to be buyers of the shares. We remain optimistic regarding the long term prospects for the business and view this issue as one which will be temporary.

dir-ltr-201500504c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : April 2015

Small Caps Outperform

March seemed to bear out what many prognosticators have been calling for as small caps outperformed their larger peers, as noted in the table below. The strength of the US Dollar has been cited as a headwind for US companies that derive a meaningful portion of their revenues overseas as the translation of those sales back into US Dollars is negatively impacted by exchange rate movements. Small caps, on average, derive less revenue from export or overseas activities and thus don’t face this same headwind.

Beyond currency impacts, market participants continue to focus on the FED and whether or not an interest rate increase will be coming sooner or later. As we evaluate our coverage, our analysts are ever-mindful of the potential impact on those companies with leverage as well as the potential relative advantage of those with debt-free balance sheets.

dir-ltr-201500408a

Recapping the table above, for March, the S&P 500 was down 1.70%, the Russell 2000 was up 1.39% and the aggregate Singular List was down 0.55%. For the trailing twelve months, the S&P was up 10.03%, the Russell 2000 was up 5.39%, and the Singular Research List was down 3.90%.

Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was recent initiation KMG Chemicals (KMG). The company announced earnings results for its fiscal second quarter (year ending July 2015) which beat our estimates. With the recent announcement of an accretive acquisition we have increased our price target to $34 from $29. Looking at the rest of our Top 5 performers, Top Ideas for 2015 list member CMT has been faring well, driven by a positive earnings report too.

dir-ltr-201500408b

Our worst performers in March saw their monthly returns driven by various factors or, in some cases, the absence of anything positive to push shares higher. In particular, our worst performer was SeaBridge Gold (SA). The company has issued recent updates that we feel are very positive with respect to the long term value of the business. We also recently hosted a non-deal road show with management and remain very bullish on the story, urging investors to take advantage of the recent move lower that had no fundamental cause.

dir-ltr-201500408c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.

Sincerely,
Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : March 2015

Markets Find Direction to the Upside

Both large and small caps posted solid returns in February as earnings season hit its stride. As is so often the case, outside factors such as geopolitical concerns and so forth recede while investors focus on whether or not companies in their portfolios are reporting results consistent with (or better than) their expectations. This was particularly telling in February as the FED appears set to begin raising interest rates soon yet the market took the news in stride. It remains to be seen what will happen once the news of earnings season fades and investors return their focus to issues such as the stability of the European Union and rising interest rates.

In this Directors Letter we are adopting a new format to encapsulate the performance of the Singular Coverage List relative to the performance of the SP&500 and the Russell 2000. We feel this table presents our results in a more concise form than before, where we reviewed the results in purely text form.

dir-ltr-201500302a

Recapping the table above, for February, the S&P 500 was up 5.39%, the Russell 2000 was up 5.67% and the aggregate Singular List was up 2.94%. For the trailing twelve months, the S&P was up 12.83%, the Russell 2000 was up 4.4%, and the Singular Research List was down 3.69%.

As we noted at the outset, February market movements were driven primarily by earnings results in our opinion. As our table shows, the top performing company on the Singular List was INTL FC Stone (INTL). The company announced earnings results for the second quarter of their fiscal 2015 which easily outpaced our estimates. The business looks to be firing on all cylinders while a recent acquisition will help round out the company’s offerings. As noted during the earnings call, management assumes no synergies in developing its acquisition criteria. Thus, any potential cross-selling gains will be icing on the cake. Looking at the rest of our Top 5 performers, BLX was also up following its earnings report while NNBR benefited from a positive analyst day outlook.

dir-ltr-201500302b

As with our top performers, our worst performers in February saw their monthly returns driven primarily by their respective earnings reports. Both EAC and FHCO declined as their earnings reports failed to impress. SELL-rated VMC posted better than expected results, driving shares higher.

dir-ltr-201500302c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : February 2015

Bouncy Ride Continues

January saw the market under pressure as participants focused on the year ahead and the impact of factors such as commodities prices, European Union issues, and currency impacts.  US companies with substantial overseas operations, typically larger companies, must grapple with the impact of a stronger dollar which makes their products less attractive to foreigners on a price basis while also reducing the translated US dollar revenues when the books are closed.  Conversely, smaller companies tend to have less of this exposure, not because they don’t desire to expand their reach overseas but often simply due to their lack of ability to do so at their current size and scale.  This dynamic is a key reason many pundits look for small caps to outperform larger caps in 2015.

An additional factor influencing share prices is that of commodity prices, specifically oil and natural gas.  Natural gas prices are a key cost for many businesses, especially industrials, as natural gas is used to run things like furnaces.  With the gas decline occurring a bit after the oil decline we expect the financial impact to be felt more in Q1 and beyond.  Oil prices have a significant impact on the price of gasoline and we have all seen the dramatic drop in gas prices as oil fell.  This has translated into more money in the pocket of consumers although that has yet to manifest into growth in retail sales as December figures surprised to the downside, which likely played a part in the lack of direction in the market in January.  For many, declining gasoline prices appeared to be a cinch to spur retail sales.  Where this hasn’t been the case, the market finds itself a bit confused.

For January, the S&P 500 was down 3.1%, the Russell 2000 was down 3.2% and the aggregate Singular List was down 5.5%.  For the trailing twelve months, the S&P was up 11.5%, the Russell 2000 was up 3.1%, and the Singular Research List was down 4.2%.

As most small caps don’t begin to report earnings until later in the cycle, January was a light month in terms of corporate news with respect to the Singular Research coverage universe.  As our table shows, the top performing company on the Singular List was Comstock Resources (LODE).  The company announced an expanded operating permit early in the month along with additional favorable news in concert with its earnings at the end of the month.  Our analyst is optimistic that the company will reach profitability in Q1:15, which is earlier than previously expected.

As with our top performers, our worst performers in January were also from a variety of industries and with a range of reasons for the declines.  In particular, ADES continued to experience significant issues with its financials as the company changed auditors yet again.  With no end in sight to the ongoing issues here we terminated coverage.

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage.  There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge.  We thank our clients for your support of independent equity research.

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer

Singular Research Director’s Letter : January 2015

S&P 500 Finishes Near an All-time High

After what seemed to be a year ripe with plenty of volatility the large cap segment of the market finished just off its all-time high (using the S&P 500 as our proxy). Small caps, represented by the Russell 2000, trailed larger caps by over 600 basis points. However, looking ahead to 2015 we feel this dynamic may be poised to change for a variety of factors. One we cite in particular is that small caps, on a relative basis, have less exposure to softening foreign demand and currency headwinds. If the US economy continues to expand then we see small caps having the runway to advance and outpace large caps this ear.

We return to highlighting our MMI indicator which, as shown in the chart below, displays strong correlation with the Russell 2000. As a reminder, an index score for our MMI indicator of 60 or higher is considered bullish; 50 to 60 is neutral; and under 50 is bearish. In the chart below we plot our weekly MMI readings since early May 2014 versus the level of the Russell 2000 index. After falling through September, our indicator bottomed early in October before rallying, finishing the year in the bullish zone, adding further conviction to our stance on small caps for 2015.

directors-letter-20150105a

For December, the S&P 500 was down 0.44%, the Russell 2000 was up 2.68% and the aggregate Singular List was up 2.94%. For the trailing twelve months, which also marks the full year 2014, the S&P was up 12.5%, the Russell 2000 was up 5.0%, and the Singular Research List was down 1.7%.

With December typically a light month in terms of corporate news, our top five performers saw a variety of catalysts for their respective moves higher. As our table shows, the top performing company on the Singular List was Trecora (TREC). We, along with many investors, had been awaiting the filing of pro forma figures related to the company’s acquisition of SSI Chusei. With those figures finally published investors pushed shares higher as they gained more comfort in their forward projections.

directors-letter-20150105b

As with our top performers, our worst performers in December were also from a variety of industries and with a range of reasons for the declines. The rout in Oil continued with Natural Gas prices also sagging significantly during the month, with softening global demand pegged as a catalyst. Reading through this, investors also sold off other commodity names, negatively impacting LODE on our list.

directors-letter-20150105c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.

Sincerely,
Jeremy Hellman, CFA
Director of Research/Chief Operating Office