Comparison to 2008



A Comparison of the S&P 500 Currently vs. 2008/09


Many wonder how much further the market can fall. Below, we compare the S&P 500 on key metrics in today’s market versus what they were in 2008. There are many arguments for and against being at or near a market bottom. We will briefly discuss both sides based on this data so that you may have an informed opinion as to where the markets may be headed.

At or Near a Bottom: The ValueLine estimated P/E of equal weighted stocks is very close to 2008 levels. Since the ValueLine index is equally weighted, we are led to believe mainly large cap stocks have more room to the downside as the S&P’s P/E ratio over the last twelve months is higher than what it was in 2008. Furthermore, 10-year Treasury yields are currently well below 2008 levels, leading one to believe that bonds are overbought in today’s market.

More Room to the Downside: Although not mentioned below, the unemployment rate as of March 2009 was 8.5%. Currently, unemployment is expected to soar as high as 30+%. The majority of businesses in shopping centers and retail outlets are closed, something we did not see in 2008/09. Furthermore, from a lack of revenue due to the quarantine situation, businesses will be more likely to increase layoffs of workers who are stuck at home. An argument can be made that what we are heading into is a situation that could possibly be worse than what U.S. citizens faced during the Great Recession. From a valuation standpoint, there is much more room to the downside as the S&P 500’s P/BV, P/S, and P/E ratios are all still above what they were in 2008.


comparison 2008 img 1


Singular Research Staff
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Major Market Indicators (MMI) Report March 2020



Embracing the Corona Bear


The mighty 12-year bull run has come to an end from recessionary fears due to the global Corona virus epidemic. We face a market that is seemingly bottomless as there is increasing uncertainty to the economic damage the Corona virus will ultimately have on the world before a vaccine is created.


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Exhibit 1: MMI Market Indicators Assessment


The good news is the fed has sprung into action, fighting with both fiscal and monetary stimulus. The fed’s $2 trillion booster shot with a velocity factor of 1.5 will add roughly $3 trillion to fill the gap from the Q2 drop. With attractive valuations for the long-term, combined with off the charts negativity in our sentiment readings, the aforementioned policy moves should get this roller coaster back on track to recovery.


Sentiment: Bullish

Mind numbing volatility has blown out the VIX and VXN to 20-year record highs, exceeding 2008 levels. The bull-to-bear ratio has turned bullish at 0.60 bulls to 1 bear, as the Corona bear has ended the reign of the bulls. The put ratio has skyrocketed to 1.5 to 1. The Arms index also shows an extremely oversold market.


Technical Indicators: Bearish

With major equity indices cascading 20 to 35% in the last several weeks, there is virtually nothing positive to hang a hat on here. I will list the data only because it is so stunningly horrible. Last week, new highs were 53 and new lows were 1,908; weekly advance/decline on the NYSE was 521 to 1163; weekly advance/decline on the NASDAQ was 148 to 2544. In March, the S&P 500, the Dow Jones, the Russell 2000, and the Russell Micro-cap indices were 21.0%, 26.5%, 35.6%, and 37.6% below their 200-day moving averages, respectively.


mmi march 2020 img 2

Exhibit 2: IWC Russell Microcap ETF 1-Year Performance


Liquidity Indicators: Bearish

To note at press time, we are concerned about restrictions on share buybacks imposed by the federal government as a condition to receive bailout money. These restrictions would mainly impact the hospitality and transportation industries.


mmi march 2020 img 3

Exhibit 3: Delta Airlines (DAL) 1-Year Performance


Margin levels on the NYSE of 33% remain uncomfortably high relative to credit balances. During the March downfall, over $20 billion was taken out of domestic equity funds and ETFs. Meanwhile, over $3.7 trillion dollars sits in money market funds, representing over 14% of the total equity market cap. This money on the sidelines will provide ample fuel to launch the next bull market.


EPS Momentum: Bearish

In the interest of time, it is safe to say that EPS estimates will be receiving a negative readjustment due to the Corona virus epidemic. Although street analysts have yet to lower their 2020 estimates, we anticipate a 10% negative EPS adjustment down to $150 for the S&P 500.


Valuation: Bullish

Valuations are decisively positive on all three of our measures. Our absolute value indicator is now positive for the first time in over five years with the market trading at a mere 7% premium to replacement cost. Total market cap to GDP is now much more reasonable at 107%, which registers bullish. Finally, our relative value indicator shows an earnings yield at a 270 basis point premium to the BBB corporate bond yield.


Monetary Indicators: Bullish

We applaud the fed for its decisive move to flood the market with liquidity and slash interest rates. Our excess liquidity indicator is a positive 177 basis points above GDP. Fed interest rate cuts have repositioned the yield curve to a very positive slope with the one-year bill 100 basis points below the 10-year bond. As a further indicator of extreme fear, the values in our high yield fund indicator are now bullish at a 500 basis point premium to 10-year treasury bonds.

At present, we believe the Fed’s aggressive actions will reinvigorate the economy to post positive growth in Q3 and Q4, thus saving the presidency for Trump.


A Note on the Corona virus:

The end to the Corona virus is the great unknown factor here; however, we believe that, in the shuffling madness, investors are overlooking some important comparables and recent favorable trends. In fact, over the last 100 years, we have had three other pandemic markets. In the Spanish flu of 1918, the Dow Jones was off over 22% and deaths were estimated at 25 to 50 million worldwide. In 1968, the Hong Kong flu slammed the market with an estimated 1 to 4 million deaths while the S&P was up 10.8% for the year. In 2009, we were hit with the swine flu (H1N1) which resulted in an estimated 150 to 570,000 deaths and the S&P 500 was up 26% for the year. The 2009 comparable may not be as strong as the other comparisons as that was the year following Great Recession. No one knows what will happen but based on current daily growth rates of 11% per day, we estimate over 450,000 in mortality due to the Corona virus.


A Further Note on the Presidential Election this Year

In modern times, only one incumbent or incumbent's party has been reelected in a recession year. We believe if Biden were to win presidency, the market multiple would diminish by over 10% due to uncertainties relating to forward tax policies and regulations.

Keep washing those hands and happy investing. We see the S&P fair value of 3,375, +40% at press time.


Robert Maltbie, CFA
President, Singular Research
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Undervalued Microcaps (HNNA, BLX, AMRK)



Undervalued & Undercovered Micro-Caps Provide Compelling Opportunity


At Singular Research, we focus on small and micro-cap stocks that are undercovered on Wall Street. These stocks have a niche business model and have yet to be widely discovered. Many of the global threats in the stock market today do not affect these stocks. Currently, we cover three companies that are both, undercovered and undervalued, providing a great value investment with the right catalyst. Please see below for our review of Hennessy Advisors (HNNA), Banco Latinoamericano (BLX), and A-Mark Precious Metals (AMRK).


Hennessy Advisors, Inc. (HNNA)

$13.25 Price Target, Buy-Long Term, Current Price: $11.04 (2/20/20)


Hennessy Advisors, Inc is an investment management company. The Company's business activity is managing, servicing and marketing open-end mutual funds branded as the Hennessy Funds. The Company provides investment advisory services and shareholder services to the Hennessy Funds. Its investment advisory services include managing the composition of each fund's portfolio, conducting investment research, and monitoring compliance with each fund's investment restrictions and applicable laws.


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  • The company has a 5% dividend yield with ample free cash flow and net income to further support and increase dividends as necessary.
  • Company is undervalued on P/E, P/B, and P/S valuation metrics as the financial service sector is 24.0, 2.8, and 4.9, for those categories, respectively.
  • Catalyst: Stock market continues expansion, M&A activity increases, and global economies recover.


Banco LatinoAmericano (BLX)

$24.00 Price Target, Buy-Long Term, Current Price: $20.03 (2/20/20)


Banco Latinoamericano, a multinational bank, primarily engages in the financing of foreign trade in Latin America and the Caribbean. The company operates through two segments, Commercial and Treasury.


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  • The company has a near 8% dividend yield with strong free cash flow. BLX has increased its dividend an average 5.8% per year over the last ten years.
  • Company is undervalued on P/E, P/B, and P/S valuation metrics as the regional banks sector is 9.4, 1.2, and 4.8, for those categories, respectively.
  • Catalyst: Stock market continues expansion, trade ware disputes ease, and Latin American economies/trade recover.


A-Mark Precious Metals, Inc. (AMRK)

$9.75 Price Target, Buy Long-Term, Current Price: $8.98 (2/20/20)


A-Mark Precious Metals (AMRK) is a full-service precious metals trading company offering a wide array of products and services. Products include gold, silver, platinum, and palladium for storage and delivery in the form of coins, bars, wafers, and grain. Services include financing, leasing, consignment, hedging, and a variety of customized financial programs.


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  • The company has a 13% discount to Book Value per Share.
  • Management is transforming the company into one with more stable revenues and earnings. The last two quarters have both surprised to the upside as their plan appears to be working.
  • Company is a play on turmoil in domestic and global economies and whether the Corona virus can successfully be contained.
  • Catalyst: Global economies slow and the Corona virus’ toll on China is worse than predicted, thus increasing volatility in the stock market.


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Major Market Indicators (MMI) Report February 2020



Bulls vs. Bugs


(As of press time markets have strongly rebounded with the S&P 500 +3.0%)

While the Corona virus has provided and an injection of exogenous risk, the market continues to grind higher. Our MMI reading has moderated but is still a bullish +56.7. Liquidity and EPS momentum are still negative. Market sentiment, technical indicators, valuations, and monetary policy are all providing positive readings. We maintain our price target for the S&P 500 at 4,000.

Is fear of missing out rising? Witness Tesla as a precursor.


mmi feb 2020 img 1

TSLA 3x in 3 months


Market Sentiment: Positive

The Corona virus sell off pushed the VIX and VXN above 20, a volatility spike that is positive. The bull/bear ratio also turned positive as the bears outweighed the bulls. The ARMS index reading of 1.83 on the NYSE confirmed the oversold nature of the market. Similarly, the put to call ratio spiked to 0.74.


Technical Indicators: Positive

The NASDAQ led the way with an advancing/declining volume indicator of +1.79. To further support a strong technical stance, the weekly advance/decline breadth indicator had a reading of +1.94. All major market indices remain solidly above their 200-day moving averages.


mmi feb 2020 img 2

S&P 500 (2/2019-2/2020)


Liquidity Indicators: Negative

The John Q Public investment conundrum continues as individual investors liquidate equity and rotate into bond funds. Over the last four weeks, $18 billion has come out of equity funds and $36 billion has flowed into bond funds. Our NYSE margin indicator is negative at 25% equity. Buybacks and M&A activities are still on a hiatus. While the equity issuance marketplace is starting to grow with over $11 billion slated to hit the market in February.


Valuation Indicators: Positive

Only the Equity to GDP ratio is negative at 1.57 (vs. 2.1 in the year 2000). We believe individual investors have yet to fully participate in this phase of the bull market and are likely to dial up their equity exposure as their bond portfolios lag without further rate cuts to boost returns. Our 4,000 S&P 500 target is predicated on continued multiple expansion, providing 20% upside and EPS growth in 2020 making up the difference at nearly 9%. The earnings yield is still attractive at 5.2% versus 3.7% provided by BBB corporate bonds. Contrast this result with the 2000 dot-com bubble where the earnings yield was 3.4% versus 8% on investment grade corporate bonds.


Earnings Momentum Indicators: Negative

S&P 500 earnings are expected to be down 1.3% for the fourth quarter of 2019. This has been revised upward from a (1.6)% forecast one month ago. Earnings surprises, so far, have come in at 65%, with 45% of the reports in, slightly below the historical average. However, forward estimates for the upcoming quarter and 2020 year-end estimates have been revised slightly lower. The current consensus forecast for the S&P 500 2020 earnings is $178.24. This result would represent an earnings increase of slightly under 10%.


Monetary Policy: Positive


mmi feb 2020 img 3

M2 growth last 12 months +5.9%


The fear of the Corona virus has caused the yield curve to flatten. Also, the high yield spread to treasuries is negative at (348) basis points. However, the term spread comes in at 95 basis points and our excess liquidity indicator is +167 basis points. Forward rates hint at a possible rate cut in the next 6 months due likely to the Corona virus fears. These readings still put the Fed solidly in the bulls’ camp.


Asset Class Performance Summary


mmi feb 2020 img 4

IVE (value) vs IVW (growth)--1000 bps positive spread to growth


Large cap growth continues to outperform large cap value by 550 basis points this year. Mexico is up 4.09%, followed by Gold up 3.88%. The two laggards are energy (12.36)% and China (7.94)%. 55% of stocks are above their 200-day moving average while 42% are above their 50-day moving average. This economic indicator index was flat last month.


We wish you a great start to the new year and hope for a quick recovery in the stock market.


Robert Maltbie, CFA
President, Singular Research
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Three Uncovered Stocks From the Chart Room




In this analysis, we have identified three uncovered stocks that we believe are attractive based first upon our technical analysis.  We then analyze each company’s fundamentals and examine whether the company is truly one with a potential upside.  We use group comparable and industry projected EPS growth rates and apply a relatively higher than average discount rate to adjust for higher risks of micro-cap, less liquid stocks


LGL GROUP INC (LGL)   Current Price: $14.76 (1/21/20)   Price Target: $18.40

The LGL Group, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of frequency and spectrum control products in the United States and internationally. The company operates in two segments, Electronic Components and Electronic Instruments. The Electronic Components segment offers XTAL, clock oscillators, VCXO, TCXO OCXO, and DOCXO devices; and radio frequency, microwave and millimeter wave filters, diplexers, and solid-state power amplifiers. It also provides filter devices, which includes crystal, ceramic, LC, tubular, combline, cavity, interdigital, and metal insert waveguide, as well as digital, analog and mechanical tunable filters, switched filter arrays, and RF subsystems. This segment's products are used in infrastructure equipment for the telecommunications and network equipment industries; and electronic systems for applications in defense, aerospace, earth-orbiting satellites, down-hole drilling, medical devices, instrumentation, industrial devices, and global positioning systems

lgl group inc 012020


PURE CYCLE CORP (PCYO)   Current Price: $12.65 (1/21/20)   Price Target: $13.45

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development Activities. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of master planned mixed-use community; and oil and gas leasing business.

pure cycle corp 012020


MRI INTERVENTIONS, INC (MRIC)   Current Price: $5.27 (1/21/20)   Price Target: N/A

MRI Interventions, Inc. operates as a medical device company primarily in the United States. The company develops and commercializes platforms for performing minimally invasive surgical procedures in the brain and heart under direct, intra-procedural magnetic resonance imaging (MRI) guidance. It offers ClearPoint system, a neuro-navigation system designed for placing catheters, electrodes, and laser fibers to treat various neurological diseases and conditions, as well as for performing biopsies.

mric 012020

Singular Research Staff
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Singular Research Director’s Letter: January performance 2020


Singular Research’s January 2020 Director’s Letter


In January, markets went lower as there were many troubling headline stories. Trump impeachment talks carried on throughout the month with a near end in sight favoring a Trump acquittal. Threats of war with Iran heightened and quickly eased as a drone strike killed General Soleimani. And lastly, the introduction of the Corona virus ended the month with a threat to bring major economic turmoil to China and the rest of the world. Domestically, the January Purchasing Managers Index (PMI®) registered 50.9 percent, an increase of 3.1 percentage points from the December reading of 47.8 percent. The PMI® returned to expansion territory for the first time since July 2019. Similarly, the Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.8 percent in January to 112.1 (2016 = 100), following a 0.3 percent decline in December and a 0.1 percent increase in November. The unemployment rate increased fractionally to 3.6% (3.5% in December), one of the lowest rates since December 1969.


singular monthly performance jan 2020


For the month of January, the Singular coverage list underperformed the S&P 500 by 253 basis points and outperformed the Russell 2000 by 57 basis points, respectively. For 2019, the Singular coverage list outperformed the S&P 500 and the Russell 2000 by 904 and 1,367 basis points, respectively. As the U.S./China trade war shows positive signs combined with better than expected earnings results from domestic corporations, investors may be favorably looking to 2020’s growth prospects. For January, growth stocks returned 4.8% more than value stocks.


singular top 5 performers for jan 2020


BYND was our top performer in January after the company became the top candidate to supply plant-based burgers to McDonald’s. Growth prospects for BYND remain strong as more and more restaurants and fast food chains adopt plant-based meat. Investors cheered NVEE for their acquisition of Quantum Spatial. RUBI also had a good month as the company announced the acquisition of Telaria which would create the world’s largest independent, sell-side advertising platform.


singular worst 5 performers jan 2020


HSC was our worst performer for the month as the company announced weaker than expected preliminary fourth quarter guidance. The stock has been hit hard in the past couple months as investors remain cautious over the company’s transition from Industrial to Clean Earth. ANIK had a rough month as investors were not thrilled of the company’s acquisitions of Parcus Medical and Athrosurface. In late January, the company’s President and CEO, Joseph Darling, passed away. Investors have remained cautious of growth and profitability at GEOS as a result of the recent decline in the price of oil (lowest level since December 2018).


singular jan 2020 new initiation


For January, we initiated coverage on Beyond Meat, Inc (BYND). Beyond Meat is a producer of plant-based meat products that enable consumers to experience the taste, texture, and other sensory attributes of animal-based meats. As plant-based meat becomes mainstream in society, we believe BYND has the growth capacity and research capabilities to become the industry market leader. We wish to thank our clients for their support and belief in our process. To learn more about Singular Research and register for a 14-day trial offer, please follow the link below.


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Robert Maltbie, CFA
Singular Research, President
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Singular Research Director’s Letter: December performance 2019


Singular Research’s December 2019 Director’s Letter


In December, markets trended higher as the first phase of a trade deal between the U.S. and China was reached.  Similarly, the Fed has opted out of an interest rate cutting stance, as they believe the U.S. economy is resilient and sound.  However, investors remain cautious as manufacturing data and business confidence indicators say otherwise.  The December Purchasing Managers Index (PMI) registered 47.2 percent, a decrease of 0.9 percentage points from the November reading of 48.1 percent.  This reading is the lowest PMI reading since June 2009 when the index was at 46.3 percent. Similarly, the Conference Board Leading Economic Index® (LEI) for the U.S. was unchanged in November at 111.6 (2016 = 100) following a 0.2 percent decline in both September and October.  On a positive note, the unemployment rate remained stable at 3.5%, one of the lowest rates since December 1969.


singular dec 2019 monthly performance


For the month of December, the Singular coverage list underperformed the S&P 500 and Russell 2000 by 250 and 235 basis points, respectively.  For 2019, the Singular coverage list has outperformed the S&P 500 and the Russell 2000 by 904 and 1,367 basis points, respectively.  As the U.S./China trade war shows positive signs combined with better than expected earnings results from domestic corporations, investors may be favorably looking to 2020’s growth prospects.

 top 5 performers dec 2019


GEOS was our top performer in December after the company reported fiscal Q4 revenue growth of approximately 40%.  The company appears to be on track for a strong recovery in 2020 as demand for their rental equipment increases.   ALG, ACU, and ZEUS were all strong performers for the month as easing trade talks with China have provided revenue clarity and relief for investors.

 worst 5 performers dec 2019


ROKU was our worst performer for the month after the CFO, Steve Louden, stepped down.  Investors remain cautious of ROKU’s growth prospects amidst weakening gross margins and increased competition.  We believe the company still has a first mover advantage and will continue to surprise investors to the upside in 2020.  HNNA reported a weak fiscal year-end with adjusted revenue and net income for 2019 decreasing 21.8 and 33.6 percent from the prior year.  The company is navigating through industry headwinds and has done so while increasing their dividend and repurchasing six percent of their total outstanding shares.  Lastly, AMRK decreased roughly 13 percent as a result of a mutual fund selling approximately 200,000 shares.  Because of this sale, we believe AMRK’s stock price is undervalued and does not truly represent the operational improvements underway at this time.      


dec 2019 new initiations


For December, we initiated coverage on Comtech Telecommunications Corporation (CMTL).  Comtech Telecommunications is a leading provider of secure wireless communications systems for both commercial and government customers worldwide. The products include satellite earth station modems, troposcatter systems, and wireless 911 systems.  The company is looking to take advantage of the transition to 5G and has made several 2019 acquisitions that have positioned the company for strong growth in 2020 as a market leader.  We wish to thank our clients for their support and belief in our process.  To learn more about Singular Research and register for a 14-day trial offer, please follow the link below.  

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Robert Maltbie, CFA
Singular Research, President
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Singular Research New Initiations Composite Up 46% in 2019


Singular Research New Initiations Composite Up 46% in 2019


Our New Initiations 2019 composite average is up 46% through 12/10/19, outperforming the Renaissance Capital IPO, LD Micro, Russell Micro-Cap, Russell 2000, and S&P 500 indices YTD.  Our 2019 New Initiation’s composite constituents and their respective performance since their 2019 initiations are listed below.  New subscribers will receive immediate access to all new upcoming initiations.  

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singular new initiations 2019


Top 3 Performers

                For 2019, our new initiations composite was led by ROKU (+264%), LUNA (+90%), and GDNP.V (+62%).  ROKU, the leader and first mover in the growing consumer transition from traditional cable television to streaming television over the internet, experienced exponential growth as active accounts, total streaming hours, and average revenue per user grew 36, 68, and 30% YoY, respectively.  LUNA completed the accretive acquisitions and integrations of General Photonics and Micron Optics and reported their 8th consecutive quarter of double-digit revenue growth.  Our November initiation of GDNP.V had YoY revenue growth of 217% in the third quarter of 2019. 


Bottom 3 Performers

                Our worst three initiations for the year were GSKY (-56%), FSTR (-17%), and FND (+1%).  In the second quarter, GSKY, a point-of-sale lender, reported they would be seeking strategic alternatives and suspended their guidance.  As a result, we became less confident in their business and dropped coverage due to a lack of visibility.  FSTR, a leading manufacturer and distributor of products and services for transportation and energy infrastructure, has shown signs of weakness from the upstream market in their Tubular segment.  This weakness has further been enhanced from a timing of revenue order recognition which has made their revenue appear weaker than normal.  We believe FSTR’s management can overcome these issues and have a 34% upside on the stock.   And, lastly, our short position on FND, a multi-channel specialty retailer, has not worked in our favor and the stock has mostly traded sideways since our initiation in April.    


Most Recent Initiation

            On December 17, we initiated coverage on Comtech Telecommunications Corporation (CMTL) with a Buy rating.  CMTL should benefit from a favorable business environment for advanced communications, strong order backlog, and exposure to large, growing markets.  Fiscal 2020 is expected to be the fifth consecutive year of increased revenue and the fourth consecutive year of increased adjusted EBITDA.  We have a $43.50 price target on the stock which is a 20% upside from current levels.

We hope you have a great holiday season.  For more information on our new initiations and to subscribe, please email This email address is being protected from spambots. You need JavaScript enabled to view it. or call us at 818-222-6234.


Thank You

Robert Maltbie, CFA
Singular Research, President
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