Singular Research's Best of the Uncovered Webinar 12/9 at 6am PDT

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Thursday, December 8 at 6 am PDT

 

 

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Please save the date for our 16th annual "Best of the Uncovered" webinar on Thursday, December 9. This webinar is for our clients and select qualified institutional investors.

 

Presentation Schedule

(Time (PST), Ticker, Company Name, Presenter Name)
6:00 AM, HBIO, Harvard Bioscience, Inc., Mr. Michael A. Rossi, CFO
6:45 AM, EBS, Emergent BioSolutions, Inc., Mr. Robert Burrows, Chief Investor Relations Officer
7:30 AM, LUNA, Luna Innovations, Inc., Mr. Scott A. Graeff, Pres. & CEO
8:15 AM, SALM, Salem Media Group, Inc., Mr. Evan D. Masyr, Exec. VP & CFO
9:00 AM, BBKCF, BIGG Digital Assets, Inc., Mr. Mark Binns, CEO & Director
9:45 AM, MMAT, Meta Materials, Inc., Dr. George Palikaras, Ph.D., Founder, CEO, Pres, & Director
10:30 AM, FSTR L.B., Foster Company, Mr. John F. Kasel, Pres, CEO, & Director
11:15 AM, --, Singular Research Special Situations, Mr. Christopher J. Sakai, CFA
12:00 PM, ACU, Acme United Corporation, Mr. Walter C. Johnsen, Chairman & CEO
12:45 PM, SCKT, Socket Mobile, Inc., Mr. Kevin J. Mills, Pres., CEO, & Director
1:30 PM, DRSSF, Arianne Phosphate, Inc., Mr. Brian Richard Ostroff, Pres. & Director
2:15 PM, CXDO Crexendo, Inc., Mr. Douglas Walter Gaylor, COO & Pres.
3:00 PM, BMTX BM Technologies, Inc., Mr. Robert Hutcheson Ramsey, CFA, CFO

LUNA Innovations: Managements Focus On Shareholder Value Is Superb

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LUNA Innovations: Managements Focus On Shareholder Value Is Superb

LUNA Innovations Inc. develops and markets fiber optic sensing, and test and measurement products worldwide. The company has two operating segments. The products and licensing unit sells the company’s commercial fiber optic test and sensing equipment and the technology development segment performs contract R&D for U.S. government agencies.

 

November 19, 2021

Price (as of close on Nov 18, 2021)

$9.38

Rating

BUY

Price Target

blocked

 

 

LUNA Innovations Inc. (LUNA)

The Company reported weak third quarter 2021 results impacted by ongoing supply chain challenges globally. The planned divestment of the slow growing, low margin LUNA Labs business is a positive. blockedblockedblockedblockedblockedblocked     

luna nov 2021

 

Q3:21 Highlights

➢ LUNA announced plans to divest their LUNA Labs business. As of the beginning of Q3, the business has been moved to discontinued operations.

➢ Q3:21 revenues were $20.3 million, up 32% versus Q3:20, largely attributable to the acquisition of OptaSense in December 2020.

LUNA reported a 31% YOY increase in gross profit to $12.5 million. Gross margin decreased by ~100 bps YOY to 62%.

➢ Adjusted EBITDA decreased to $2.1 million, compared to $3.1 million for Q3:20.

➢ LUNA noted that the Company continues to be challenged by supply chain issues which is impacting revenue growth despite strong demand.

➢ For the full year, LUNA revised its 2021 revenue outlook to factor in LUNA Labs as a discontinued operation and supply chain headwinds. Revenue and adjusted EBITDA are now expected to be between $85-$88 million and $6-$8 million, respectivel

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PRIMARY RISKS

➢ The Company operates in a space which is prone to rapid technological changes. New technology or the emergence of new industry standards could render existing products obsolete.

➢ Difficulties with integrating acquisitions could adversely affect operating costs and expected benefits from those acquisitions.

 

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Emergent BioSolutions: A Great Value Proposition Emergent BioSolutions (EBS)

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Emergent BioSolutions: A Great Value Proposition Emergent BioSolutions (EBS)

Emergent BioSolutions (EBS) is a global specialty life sciences company that develops and commercializes vaccines, drugs and devices that address public health biodefense threats. The Company is a preferred provider of biodefense products and services to the U.S. government under multi-year contracts. Its portfolio includes the only FDA-approved anthrax vaccine and smallpox vaccine and NARCAN nasal spray for treating opioid overdose. The Company’s products are sold mainly in the U.S. as well as internationally.

 

November 8, 2021

Price (as of close on November 5, 2021)

$33.11

Rating

BUY

New 12- Month Target Price

blocked

 

Emergent BioSolutions

EBS shares tumble after termination of CIADM contract. JNJ COVID vaccine and other vaccines and products remain on track. We maintain our Buy rating, . blockedblockedblockedblockedblockedblockedblocked

 

ebs nov 2021

 

Q3:21 Highlights

➢ Termination of US government contract for pandemic preparedness reduces revenues to be realized under related task orders by $180 million while accelerating recognition of $60 million of deferred revenues.

➢ This contract termination has no impact on manufacturing of the JNJ COVID vaccine, which is a commercial order. EBS resumed manufacturing of the COVID vaccine in July and has to-date produced over 100 million doses.

➢ EBS secures a COVID vaccine manufacturing contract with Providence Therapeutics valued at $90 million over five years.

➢ The company’s CDMO business secured $118 million new business during the September quarter and ended the quarter with backlog of $1.0 billion.

➢ Sales of ACAM2000 smallpox vaccine rose $79.7 million as the company commenced deliveries under a contract option valued at $182 million. Sales of NARCAN nasal spray rose 50% to $133.3 million and EBS increased full-year guidance for this product to $400-$420 million from $305-$325.million earlier.

➢ Phase III trials began of the company’s chikungunya vaccine candidate and of its COVID-HIG therapeutic candidate for outpatient treatment of those at risk of severe forms of COVID.

➢ We updated our revenue and adjusted EPS estimates to reflect September quarter results and reduced guidance. We maintain our BUY rating blockedblockedblockedblockedblockedblocked

 

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Acme United Corp: Management's Supply Chain Preparation Helping Lead Record Sales And Earnings In 2021

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Acme United Corp: Management's Supply Chain Preparation Helping Lead Record Sales And Earnings In 2021

Acme United Corporation is one of the largest worldwide suppliers of innovative cutting devices, measuring instruments and safety products for the school, home, office and industrial markets. The company has facilities in the U.S., Canada, England, Germany, Hong Kong and China.

 

November 11, 2021

Price (as of close on Nov 10, 2021)

$36.60

Rating

BUY

Price Target

blocked

 

Acme United Corp. (ACU)

ACU reported strong Q3:21 results with revenue up 11% YOY and net income up ~30% YOY. The management noted that it anticipates record sales and earnings in 2021. The supply chain challenges will continue in 2022, however ACU noted that it is well prepared given inventory stock-up over the last 18 months. We increase our target price blockedblockedblockedblocked    and maintain BUY on the stock.

 

acme nov 2021

 

Q3:21 Highlights

Q3:21 revenues were $47.9 million, up ~11% from Q3:20. The performance was strong across US (+12% YOY) and Canada (+6% YOY), while Europe was flat YOY.

Gross Margin for Q3:21 was 35.5%, which was up 100 bps compared to 34.5% in Q3:20.

Operating profit up 39.4% YOY on account of higher revenue and improved gross margins.

Net income for Q3:21 was $2.0 million vs. ~$1.5 million in Q3:20. The diluted EPS was $0.50 in Q3:21, vs. $0.46 in Q3:20, an increase of ~8.6%.

The company anticipates record sales and earnings in 2021.

We marginally adjust our earnings estimate factoring in the latest management commentary. We increase our target price to blockedblockedblockedblockedblockedblockedblockedblocked

 

PRIMARY RISKS

ACU’s results can be negatively impacted by weak economic activity; rising commodity input costs; timing of customer orders; foreign exchange fluctuations; and competitor pricing.

Failure to integrate acquisitions could adversely impact business operations.

 

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Singular Research's Private Client call with Olympic Steel (ZEUS) Wednesday 12/1 at 9am PDT

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Private Client call with Olympic Steel (ZEUS) Wednesday 12/1 at 9am PDT

 

REGISTER NOW

 

Join us for a private client webinar with CEO Richard Marabito and CFO Rich Manson of Olympic Steel (ZEUS) on Wednesday, December 1 at 9 am PDT.Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin, pipe, and tubular products.Olympic Steel, Inc., a leading national metals service center, announced record quarterly financial results for the three months ended September 30, 2021. Net income for the third quarter totaled $44.5 million, or $3.87 per diluted share, compared with a net loss of $1.5 million, or $0.13 per diluted share, in the third quarter of 2020. The Company reported sales totaling $668 million for the third quarter of 2021, compared with $300 million in the third quarter of 2020.

After registering, you will receive a confirmation email containing information about joining the webinar.

 

Educational Development Corporation: Recent Stock Price Decline And Management Incentive Alignment Indicate Potentially Attractive Entry Point

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Educational Development Corporation: Recent Stock Price Decline And Management Incentive Alignment Indicate Potentially Attractive Entry Point

Educational Development Corporation (EDUC) is a publishing company specializing in books for children. EDUC is the American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from around the world. Both Usborne and Kane Miller products are sold nationally by direct sales consultants, as well as in book, toy and specialty stores.

 

November 24, 2021

Price (as of close on November 24, 2021)

$9.41

 

Rating

BUY

 

12- Month Target Price

blocked

 

Educational Development Corporation (EDUC)

Educational Development is a publishing company specializing in books for children. It has a strong balance sheet and cash flows and pays consistent dividends. It has had strong revenue growth over the last 7 years. We expect this trend to continue. The stock has fallen recently, and we believe now is an excellent entry point. We are initiating with a BUY rating and a blockedblocked.     

 

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Investment Thesis

➢ Educational Development Corporation is a profitable publishing company which has demonstrated impressive revenue growth of nearly 1000% over the last seven years.

➢EDUC benefited from the stay-at-home environment. Active consultants increased significantly during 2020 (fiscal 2021) This caused a dramatic increase in sales during this year. While sales are expected to fall as children are back to school, sales remain up dramatically from fiscal 2020.

➢We believe the overall positive growth trend has been impressive and should continue. EDUC’s stock price has fallen due to an overreaction in its revenue falling during the return to more normal environment. We believe this is an overreaction and is a buying opportunity.

➢EDUC is undervalued at just 8.32 times our 2022 adjusted EPS of $1.13 and only 7.71 times our 2023 EPS of 1.22. Our price target is based on a conservative 15 times P/E relative valuation blended with a DCF model price.

 

Primary Risks

➢ EDUC’s recent fall in sales has been expected due to the change in the stay-at-home environment. If this fall is larger than expected or continues, it could have negative implications for the stock.

➢The increase of active consultants and sales was impressive from 2020 – 2021. We expect the number of consultants to fall this year – but remain elevated. If consultants return back to the levels of FY2020, this will impact future growth expectations.

 

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Esports Entertainment: Recent Acquisitions Further Symbolize Managements Strategy

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Esports Entertainment: Recent Acquisitions Further Symbolize Managements Strategy

Esports Entertainment is an online gambling company that offers esports entertainment, esports wagering and igaming and traditional sports betting. The company offers odds wagering, fantasy and pools on various esports events on its licensed and secure Vie.gg wagering platform and owns and operates an online sports book at SportNation.bet. In late 2020 Esports Entertainment became the first esports-focused gaming business to acquire a US gambling license.

 

November 18, 2021

Price (as of close on November 17, 2021)

$6.13

 

Rating

BUY

 

12- Month Target Price

blocked

 

Esports Entertainment (GMBL)

Esports Entertainment revenues improve 86% sequentially and rise $16.2 million YOY. The Company guides for 490% revenue growth and FY:22 revenues exceeding $100 million. blockedblocked.     

 

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Q1:22 Highlights

➢ GMBL operates esports gaming platforms and event venues and owns proprietary esports infrastructure and technology. The Company is securing marquee partnerships with professional sports teams that are bringing new players to its gaming sites and supplementing its digital assets with on-site Helix game centers.

➢The Company’s Q1:22 revenues improve 86% sequentially to $16.4 million and gross margin improved 200 basis points to 61% from 59% one quarter ago. Operating loss narrowed to $8.6 million from $10.5 million one quarter earlier.

➢GMBL recently closed the acquisition of Bethard, which provides gaming licenses in Sweden and Spain and another $30 million in annualized revenues. The Company has closed six major acquisitions in the last 12-14 months and will focus in FY:22 on integrating, cross-selling and realizing synergies from its acquired businesses.

➢The Company anticipates securing its New Jersey gaming license before year-end and plans to pursue gaming licenses in Ohio and the Canadian province of Ontario in 2022.

➢GMBL is guiding for FY:22 revenues exceeding $100 million and positive adjusted EBITDA in late FY:22.blockedblockedblockedblockedblocked.

 

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Salem Media Group: Continued Specialization In Christian And Conservative Content Serving Them Well

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Salem Media Group: Continued Specialization In Christian And Conservative Content Serving Them Well

Salem Media Group is America’s leading Christian and conservative multi-media company. The Company operates through Radio Broadcast, Digital Media and Publishing segments. It owns and operates radio stations in many of the top 25 media markets, and produces several of the largest nationally syndicated radio shows on the air today.

 

November 8, 2021

Price (as of close on November 5, 2021)

$3.88

 

Rating

BUY

 

12- Month Target Price

blocked

 

Salem Media Group (SALM)

Revenue growth across Broadcast, Digital Media and Publishing segments. Land sales add $0.29 net of tax to Q3:21 EPS. We reiterate our Buy rating and increase our price target blockedblocked.     

 

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Q3:21 Highlights

➢ Total revenues increase 8.8% YOY to $66.0 million reflecting growth across the Broadcast, Digital Media and Publishing segments.

➢Broadcast revenues improved 9.3% YOY to $49.6 million and station operating income rose 9.2% to $12.1 million.

➢Digital Media revenues rose 8.5% YOY to $10.6 million. However, segment operating income declined 10.8% to $2.4 million due to higher marketing costs and acquisition-related expenses. Publishing revenues increase 5.6% YOY to $5.7 million and operating income was $0.5 million.

➢Recurring operating expense increased 8.1% to $55.2 million. Revenue gains, higher operating profit and a $10.6 million gain on a land sale resulted in operating income of $15.8 million, versus $4.8 million last year and adjusted EBITDA of $10.8 million, up 12.5% YOY. Net income was $22.1 million or $0.81 per share, up from 0.3 million or $0.01 per share one year earlier. The land sale contributed $0.29 to Q3:21 EPS.

➢Salem ended Q3:21 with $23.8 million of cash and $208.6 million of long-term debt, down from $213.8 million in December. Increased EBITDA and reduced debt resulted in a decline in leverage to 5.5x from 8.6x one year ago.

➢Digital revenues are experiencing double-digit growth and helping to boost marginsblockedblockedblockedblockedblocked, which values SALM at 7x our FY:21 EBITDA estimate.

 

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