Stockapalooza — IMAX, AMC, GAIA, NFLX, CDLX, MoviePass (HMNY), SMSI, RDCM, & More!

Stock Research 4 Minutes

I look at far more things than I can write about. Here’s a quick list of things I think investors should find interesting from this week:

  • IMAX reported a nice quarter. For HMNY followers, there’s not much to see here, since MoviePass doesn’t pay for IMAX movies. However, the fact that they beat their numbers without help from MoviePass is a minor data point in favor of those who say that MoviePass isn’t having a measurable impact on the industry yet (see my posts on MCS and CNK for more on this).

    The conference call transcript is up on Seeking Alpha. As far as I know, every theater-related stock has posted great results. AMC reports tomorrow morning. Without saying what I think it’ll mean for the stock, I think they will complete the industry sweep of good results.

  • If you’re invested in HMNY, I hope you understand the concept outlined in this great read by a widely respected blogger. Spoiler Alert: The balance sheet matters.
  • Gaia (GAIA) posted very good results and a short-but-sweet call. CAC was down, LTV was up, growth is accelerating, and the company is expanding into new languages. Really couldn’t ask for much more. They can surely grow faster if they choose, but they’ve gotten here by being methodical. This quarter was no exception. This company is much more like Netflix (NFLX) than MoviePass is (and I’m sure even Mitch would tell you the same).

    The stock sold the news after buying the rumor on a rough day in the market, so I bought more. My thesis remains intact. I currently plan to stay long until the model breaks down or Mike Tyson punches me in the face (for those of you who remember his famous quote).

  • I beta tested the upcoming version of SMSI’s SafePath product and came away impressed with what they’ve done to improve the app they acquired last year. It has a smooth and intuitive interface to go along with all the functionality they talked about in the investor presentation months ago (see my earlier blog report for details). There are still a few minor bugs, but that’s what beta testing is for. I saw nothing that shouldn’t be easily remedied.

    For me, the coolest part was testing the parental controls.  This enables a parent to shut off the child’s access to applications. This is great for when they should be focusing at school, asleep in their rooms, or on punishment (as just a few examples). For the test, I allowed my apps to be shut off.

    When my testing partner pushed the button on his phone, the icons for all relevant apps (including Snap, Instagram, and Facebook) disappeared from my phone! Another push of the button and my icons reappeared. If they do a good job of selling and ramping this app into carriers, it could be special… but it’s still an “if”, so let’s not get too excited too soon.

    SMSI reports earnings on March 14.

  • AEHR announced another win today. We’re all just waiting to see if the floodgates open for their new product. All the pieces seem to be in place. It’s just a matter of time and patience. I think the risk/reward is fantastic. Just don’t forget the “risk” in risk/reward when considering it. All things considered, it’s a top position in my personal portfolio.
  • Recommended reading:
    1. Cardlytics write-up
    2. RADCOM write-up

Disclosures / Disclaimers: I am long AEHR, AMC, CDLX, GAIA, RDCM, and SMSI. However, I do not encourage or recommend for anyone to follow my lead on these or any other stocks, since I may enter, exit, or reverse a position at any time without notice. I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article.

The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.  I am not a financial advisor.  Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein.  Similarly, the disclosure above may state that I am long or short shares of the companies mentioned herein, but should not be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. That disclosure is true as of the time the article is placed in queue for publication, but it is possible (or even likely) that I might be buying and/or selling the stocks mentioned herein immediately thereafter or at any other time, regardless of (and possibly contrary to) the content of this article or this website’s timing of its release.  The disclosure will not be updated following submission of the article and may be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are.  I wrote this article myself and I receive no compensation for writing it.  All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

Long-time readers should note some significant changes in how I communicate in the public domain. The sole purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses. Accordingly, this document should not be construed as an endorsement of the companies or securities discussed herein. The disclosure below is critical to understanding the content of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.

Published by Mark Gomes

Mark Gomes is an Information Technology expert with over 20 years of experience. During his career, Gomes led the investment research efforts at numerous IT consulting organizations, including International Data Corporation (1994-1998), and AMR Research (1998-2004), which was later acquired Gartner Group. In 2004, Mr. Gomes founded Pipeline Data, LLC where he provided investment consulting to many of America's most well-respected mutual fund and hedge fund managers. In 2008, Mr. Gomes semi-retired and began donating his research to Seeking Alpha. He quickly built a reputation for accurately identifying inflection points and M&A candidates. Outside of the investment world, Gomes is a Masters Track & Field World Champion and multi-time world record holder. In 2012, he published "Faster Than Forty", which detailed his diet, lifestyle, and training techniques. Today, he serves as a volunteer track coach to children and adults in the Miami Beach community.

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18 thoughts on “Stockapalooza — IMAX, AMC, GAIA, NFLX, CDLX, MoviePass (HMNY), SMSI, RDCM, & More!”

  2. Agree, great stuff.

    I have been keeping an eye on AEHR strictly from the technical perspective (haven’t had time to do DD). Whew, almost as rough as HMNY now down under the 200dsma! It is hanging onto that 2.20 support. The big danger I see is if 2.2 breaks on the short term (2yr) the next support I see is waaay down at $1.5.

    MACD and RSI have turned ever so slightly bullish now, will keep an eye on it with my morning watch list.

    Thanks again!

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    1. I’d love to see that happen for purely technical reasons. The fundamentals are as good as when I found it and today’s deal is more meaningful (longer term) than the press release let on. Cheers!

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  3. wow what a coincidence that “every theater-related stock has posted great results.” even IMAX in the same year that MoviePass came out in a big way. You know what I think? That “halo effect” Mitch talks about is correct and it’s even trickled down to IMAX. Won’t go through all the mechanics of how that works but it does.

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    1. You should read my analyses of each earnings report… and then the theater transcripts if you don’t believe what I wrote. 😉

      I’ve gone through the mechanics in my writing and invite you to counter, though you just said you won’t. 😉

      Also, I’d issuing a challenge to a MP “champion” to debate me in a public forum. Let’s see if anyone has the big….. um, data… to counter mine. 😂😊

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      1. haven’t seen any data that you have. We are all looking at the same data but you write about them out of context and include bear assumptions which you don’t reveal when there could just as easily be a bull assumption. Stop doing things like “churn is 4% so Liftetime value is 2 years period – that’s a fact! It’s 2 years!”. No it’s not. This is a startup with things in flux and if you want to make that claim you should also say: “Customer service and the app is terrible and I believe it will continue to be terrible because I don’t have confidence in management because of X Y and Z”. Then and only then can you even start to make the claim that lifetime value will be 2 years. Once you present every “fact” in this way, I will be more open to engaging with you.

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        2. I’m sorry, Ben, but your weighting of data has earmarks of confirmation bias. You have ducked several of the most relevant issues (except the churn issue, which I now accept due to the annual subscription dominance, but that’s only enough to make it less of a disaster).

          You have also admitted to not looking over all of my data (which are facts, not opinions, so why you’d want to not know them is beyond me). Further, NOBODY has addressed the frequent user issue beyond “trusting” that it will resolve itself, when the first six months of data show that’s not happening.

          Simile, nobody has an answer for why institutions wouldn’t pay more than the equivalent of $3.50 per-share in the recent offering (the warrants have a Black-Scholes value of about two dollars each). This is something where Ted himself has admitted that he could have raised more money at that price, but nobody would give him more than that valuation.

          THAT IS NOT WHAT HAPPENS TO UNICORNS. Institutions are awash with capital in an environment of high valuations. They are LITERALLY scouring the planet for “opportunities like this”… but many have taken a look at this one and passed. I know, because I have spoken to many of them. I’m getting emails every week from institutions requesting a conversation with me.

          There’s a reason for that (and everything else I have said).

          Think about it (for you, not me… I don’t care if people agree with me or not… I do this to help people & as a retirement hobby)!

          Finally, you talk like customer acquisition at any cost is good. Tell me Ben, do you have no limit for acquisition in YOUR business? That’s not rhetorical. You have real experience there. In addition, I have posted information from professional venture capitalists that help to guide in this regard.

          I read and consider every data point you throw at me. Why? Because I’m not trying to be right. I’m trying to determine the truth.

          You can choose to do otherwise (due to work, family, lack of time, respect for my work, etc.) and that’s YOUR prerogative but suboptimal research only hurts yourself.

          The institutions aren’t making the same choice. Things that you don’t believe matter, matter (as clearly evidenced by the third-party VC blog posts I’ve shared).

          As for your survey data, everyone including the uber-bullish sell-side analysts and MP management are on record with data that refutes that data by a significant margin. To be honest, I don’t know why. I have confidence in your methodology, but things haven’t been playing out that way.

          Happy to continue the discussion, but can’t do that if you only look at selected data. Every institution with which I’ve spoke has looked at everything I have leading to great back and forth discussion. Cheers.

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  4. That’s everything Mark. That’s everything. Debating #s is not where this is at. We need to be debating management, competition, the need or lack of need for this solution for the industry, etc. So far you’ve been so proud of yourself for presenting some “facts” which you say prove the bear case. But they don’t. You should delete that whole Marcus piece… filled with terrible assumptions.

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    1. That’s because the number don’t favor you. Read the VC blogs I presented, since you won’t believe me.

      Institutions think this is a big fat dog and the reason for that is lost on you, because you have confirmation bias against the tried and true Silicon Valley type methodologies of how to build a business like this.

      You forget, much of my coverage universe consists of businesses like this (SAAS / Cloud).

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  6. Mark
    What is your opinion of the stock offering this morning and would you be a buyer of SMSI down here.
    Thank you
    Eric

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  7. I was happy this morning to pickup up SMSI @ 1.55. Just wish it would have filled my full order. I think the private placement is a good thing for the company.

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