100% Q&A LIVE on YouTube! — Tuesday @ 12:30PM ET

Stock Research 3 Minutes

If you’ve missed my Live broadcasts on Marin Software (MRIN), be sure to check them out before sending questions my way. Most of the most common questions have been answered (often more than once) in the videos.

You can see the first one here (discuss MRIN in greater depth at the 28 minute mark) and the latest one here (I discuss MRIN in greater depth at the 15 minute mark). Finally, I did an in-depth Q&A session on MRIN (at the 33-minute mark) during today’s Live broadcast.

As always, be sure to read my disclosures / disclaimers below. Cheers!

 

It’s official. My last two LIVE YouTube videos are now among my most popular to date. People are doing their research on Marin Software (MRIN) and asking questions. StoryTrading.com even launched a WhatsApp group to enable investors to discuss the fundamentals.

So, let’s give everyone the weekend to do their fundamental homework. Then, Tuesday at 12:30PM ET, I’ll host a LIVE 100% Q&A session on YouTube to answer everyone’s questions about MRIN, SMSI, TPCS, GAIA, USATP, etc…

 

Details

As usual, we need enough people (40) to make it worthwhile, so spread the word and tune in!

If you miss the live broadcast, be sure to check it out later. Cheers!

If you missed my last two Live broadcasts, be sure to see the first one here (discuss MRIN in greater depth at the 28 minute mark) and the latest one here (I discuss MRIN in greater depth at the 15 minute mark). As always, be sure to read my disclosures / disclaimers below. Cheers!

 

More Research:

 

To get my posts in real-time, just follow/subscribe to my free blog.

If you only want to receive my most critical reports, simply sign up for my MailChimp mailing list instead. If you’re on that list, you will only get key articles and occasional recaps of all the work I’ve recently done.

Disclosures / Disclaimers: This is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore 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. 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.

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.

The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

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.

Published

40 thoughts on “100% Q&A LIVE on YouTube! — Tuesday @ 12:30PM ET”

  1. Mark, It just hit me why SMSI has been going down since the merger was announced. Supply and demand. Of course the 2.7 million shares that were created in the purchase, there is no reason to assume that ISM wants to be such a large investor in SMSI. Some of those shares hit the market immediately. I don’t know how long it will take them to sell all that they want to sell, but likely they are not done. Obviously they are taking a loss on the shares since they are valued at $2.12 I believe according to the purchase agreement, but I guess they are willing to sell within a certain range and will not stop until they are done. As an investor in SMSI I assumed at first they would hold on to the shares but even if they feel that SMSI’s prospects are bright, they may have other uses for the cash and maybe they are not into speculating in microcap stocks in the first place. For some reason I was thinking like an investor (is Smith more valuable after the merger) and not like the acquirer of 2.7 million shares of a “competitor’s” company. Obviously they are not going to compete on the acquired product so I put “competitor” in quotes. I still think ISM should hold on to the shares for a year, but I can see now that is extremely unlikely even though i think it will be worth more then than now.

    Like

    Reply

    1. Respectfully disagree. Those shares aren’t even registered yet… and there’s no info to suggest whether ISM wants to hold or sell those shares.

      In my 25+ years of investing, one of the top things I’ve learned is to not assume ANYTHING without backing it up with facts that I collect from the field.

      If I cannot collect supporting facts, I make no assumptions around the subject (because more often than not an assumption is no better than a 50-50 bet… and I’m not here to make 50-50 bets).

      You’re 100% right about one thing though – the stock is moving on supply and demand. A stock always is. From what I have observed with SMSI lately, a lot of that SEEMS to be related to movement in the Russell microcap index.… but that’s just an assumption 😉

      Like

      Reply

  3. Hello Mark,

    Just wanted to comment regarding ESW’s holdings with MRIN. You stated on your broadcast that they were a significant owner. You are correct, however, they have sold a good chunk of their holdings at the end of December. Also, I noticed that back in Oct of 2017 they were buying shares of MRIN at much higher prices than they last sold (ranging from $12.50 to $13.99).

    I understand that insider “buys” are more significant than insider “sells” but was still curious of what you thought of these transactions? I think it’s concerning that they sold into the Google news. In fact it seems like it was their selling that brought the price back down.
    https://www.nasdaq.com/symbol/mrin/insider-trades

    Insider Relation Last Date ▼ Transaction Type OwnerType Shares Traded Last Price Shares Held
    ESW CAPITAL, LLC Beneficial Owner (10%) 12/28/2018 Sell direct 66,828 7.0298 579,000
    ESW CAPITAL, LLC Beneficial Owner (10%) 12/27/2018 Sell direct 301,607 7.3188 645,828
    ESW CAPITAL, LLC Beneficial Owner (10%) 12/26/2018 Sell direct 256,693 7.3306 947,435
    WALCOTT WISTER Officer 12/17/2018 Automatic Buy direct 2,000 3.0500 68,033
    WALCOTT WISTER Officer 10/15/2018 Automatic Buy direct 2,000 3.2400 66,033
    WALCOTT WISTER Officer 08/15/2018 Automatic Buy direct 2,000 4.3000 64,033
    WALCOTT WISTER Officer 06/15/2018 Automatic Buy direct 2,000 6.0500 62,033
    KINNISH BRADLEY Officer 04/07/2018 Disposition (Non Open Market) direct 1,564 6.5000 2,326
    KINNISH BRADLEY Officer 04/07/2018 Option Execute direct 3,572 0.0000 3,890
    WALCOTT WISTER Officer 02/15/2018 Buy direct 2,000 9.3500 60,033
    WALCOTT WISTER Officer 01/25/2018 Buy direct 2,000 10.0000 58,033
    ESW CAPITAL, LLC Beneficial Owner (10%) 10/26/2017 Buy direct 361,172 12.5000 1,204,128
    ESW CAPITAL, LLC Beneficial Owner (10%) 10/20/2017 Buy direct 42,088 13.9999 5,273,152
    ESW CAPITAL, LLC Beneficial Owner (10%) 10/19/2017 Buy direct 3,970 13.9948 5,231,064
    ESW CAPITAL, LLC Beneficial Owner (10%) 10/17/2017 Buy direct 5,712 13.9902 5,227,094

    Like

    Reply

    1. I discussed this in-depth during my prior broadcast. A change of control provision of the Google deal essentially forced ESW to sell its position down to a lower level.

      They sold down to exactly 9.996%.

      In other words, giving up their controlling stake was the quid pro quo for GOOG giving MRIN the deal.

      Like

      Reply

    1. No worries! Just skip to the relevant section of my videos. I discussed MRIN during each of my last three (about halfway thru each one).

      Links are in my recent blog posts.

      “If you missed my last two Live broadcasts, be sure to see the first one here (discuss MRIN in greater depth at the 28 minute mark) and the latest one here (I discuss MRIN in greater depth at the 15 minute mark). As always, be sure to read my disclosures / disclaimers below.”

      Liked by 1 person

      Reply

  8. Sorry I didn’t get to see the broadcast live. I wanted to ask about aehr. I think your last comment was sit and wait and see, the stock is a coinflip depending on whether or not they get new orders. I’m down 60% since buying in, so my 1% position is now a .4% position. I tend to always make the wrong decision in this situation, so generally speaking, would you double down and get back to a 1% position or wait for good/bad news?

    Like

    Reply

    1. Sounds like you’ve missed a lot of my broadcasts. Long ago I advocated the exit of all speculative positions (back when the market was just starting to roll over). I’ve repeated that many times since. My Dec 24 content was a short term turning point in that view, but I’m now off that view again (for now).

      At this level though, if I had a position, I personally probably (<<< caveat words because I DON’T and am 100% NOT giving investment advice) would sit on whatever small position I had left.

      I actually bought a tiny tiny tiny bit of it this week because the risk/reward is STARTING to look attractive… but I very much feel that move to be premature.

      Start watching the vids. I do them because I can’t answer questions like this for the thousands of people who follow me. No offense. Just tough love from someone who wants to see you increase your financial success. 💯

      Like

      Reply

  9. Hi there Mark,
    The Jan HEAR puts worked out perfectly! Thanks!!!
    I liked the logic of timing expiration with Xmas/New year.
    Was wondering how do you generally decide on time to expiration?
    For example, selling the NDEV 10 calls, target expiration on mars? June? longer?
    what’s the criteria?
    Thanks again!

    Like

    Reply

    1. Options are the one area where you can use gut feel as much as anything. Just consider the outcomes and check the delta/vols (to see which options are paying the highest premium).
      Of course, short term options pay more relative to the time to expiration, but I don’t get too greedy because anything can happen in the short term. Cheers!

      Like

      Reply

  11. Hey Mark,

    Is it even possible to valuate USAT until the company confirms and then releases the updated/corrected financials for past 2+ years? Am curious as to how the analysts could provide updated PT’s for USAT (https://thefly.com/news.php?symbol=USAT) – did they make a range of guesses for revenue in their model? Also, the SEC filing stated that MOST (and NOT ALL) of the prematurely recognized revenue were later accounted for in subsequent quarters – which raises the question of how significant was the portion of revenue NOT recognized in subsequent quarters.

    p.s. I fully recall and understand your reasoning for why USATP is a better bet and safer than USAT.

    Like

    Reply

    1. It’s definitely harder to value USAT without the completed restatement, but the information they gave us allows for getting nicely into the ballpark.

      Personally, the announcement was enough for me to immediately buy some USAT. That’s more of a valuation-based trade, though — I remain a much bigger fan of USATP.

      Like

      Reply

      1. Saw this today on the wires regarding USAT.

        USA Technologies would be worth $10-$15 per share in buyout, says Barrington Due to conducting an internal investigation related to certain contractual arrangements, shares of USA Technologies declined from $15.30 on September 10, 2018, to a close of $5.26 on January 18, 2019, Barrington analyst Gary Prestopino tells investors in a research note. The analyst views USA Technologies as a “unique asset” in the unattended retail market with “leadership through offering a value proposition.” Given what has occurred since the commencement of the internal investigation, coupled with a “significant credibility gap” stemming from the investigation and the need to rebuild the senior executive team, USA Technologies shareholder value would be maximized by a sale to either a financial or strategic buyer taking the company out of the public realm, Prestopino contends. He believes the company’s takeout value to either a financial or strategic buyer would range from $10 to $15 per share. Prestopino does not currently have a rating on USA Technologies.

        Like

        Reply

  13. Mark, TPCS had a pretty big swing today, hitting 94 then back up 1.03. Any news or thoughts on this? Thanks for all you do on this forum, it’s very informative.

    Like

    Reply

    1. Why? Has anything changed with the fundamentals? News? Nope! On any given day/week/month, there’s a mix of buyers and seller, which sets the short-term direction.

      Other than that, a stock only occasionally has news, earnings, SEC filings, and anything related to that (in this case gvt sub & aircraft carrier purchase plans).

      For TPCS, none of these things change on a daily, weekly, or month basis.

      Ditto for AEHR. No genius timing on my part. The stock reached the ballpark of what I start to view as fundamentally attractive, so I bought a little.

      Personally, I’d rather it go DOWN, which would justify a decision to by more than a tiny bit… but I can’t control where the stock goes, so I stay disciplined & buy the right amount at the right valuation (NOT based on technicals, tho charts are a good visual tool).

      #ClassDismissed

      p.s. Thanks for the kudos! ALWAYS appreciated 😊

      Like

      Reply

  14. Mark, where can I find your latest forward looking earning per quarter spread sheet for SMSI. I have seen it before but do not remember where to look. Thanks Eric

    Like

    Reply

  16. Mark, what is your thoughts on a previous stock of yours, PXLW. They turned profitable last quarter and seemto have signed some OEM’s in Japan and China. Appreciate your input as the stock is down to 3.
    Eric

    Like

    Reply

    1. No idea at all. Last I checked, because the HD 4K wave didn’t take off, I became “permanently” neutral-to-bearish on their prospects. I’ve seen nothing in the macro environment to change that view. 4K might finally take off, But so much time has passed, the components have become commoditized. My gut tells me they can be profitable, but not thrive.

      Funny though, despite all that, someone who stayed with the stock all this time still didn’t lose money vs. my initiation price.

      That’s the beauty of risk/reward. Even if your thesis doesn’t play out, the penalty may not be stiff. You may even win anyways (witness stocks like GLUU).

      It’s worked like that as long as I’ve been doing it (20+ years), but most people don’t have the patience. Just look at where stocks like ATTU and QADA are… but also how long it took for them to get there.

      We already see people giving up on MRIN and we’ve barely seen the first pitch of their first inning… but that’s also been consistent over the years.

      I feel bad for those who can’t bring themselves to do it the right way — they’d become millionaires too. It’s easy.

      Alas, everyone must walk their own path. Aside from the the pity I feel for folks, it never stops being fun to watch. Humankind is fascinating. 😁

      Like

      Reply

  17. Thanks Mark for your insight. I actually held onto some shares of PXLW for a few years and sold it last year around 7 after it had dropped to 1, so I continue to watch it.

    Like

    Reply

    1. No worries. Holding on can be a challenge, but also letting go. The key is to know the story you bought into and get the stock at a very attractive risk/reward price.

      As long as that story doesn’t die, I tend to stay patient (when I don’t, I often regret it later). When the story does appear dead (like 4K TVs clearly not taking off during the holidays a few years ago), it’s usually best to reallocate the $$$ to a better opportunity.

      But as we’ve seen with stocks like GLUU and PXLW, if you wait long enough, some new catalyst can make the wait worthwhile. This is all enabled by getting in at an attractive risk/reward price.

      That alone gives you many ways to win (execution, M&A, pure luck) and not too many ways to lose (because failed execution often leads to M&A if the stock is cheap enough).

      Remember, just the cost of being public will knock $1-2M from the cost structure for an acquirer. That alone is worth $10-20M of market cap!

      Apply that notion to a company like MRIN (which has a few suitors that would like to buy them) and you can see that we’re effectively buying the stock for free.

      Like

      Reply

      1. Mark, I know the mention of MRIN being a take over Target has popped up more than once. My limited understanding of the Google deal was that one of the parameters of them giving MRIN the R n D money was that they don’t get acquired. If that’s the case wouldn’t that be a deterrent ? Am I mistaken?
        Thank for all your time and effort.

        Like

        Reply

        1. No, but gives GOOG the upper hand for ultimately being the buyer, since they’re willing to invest so much $$ over the next few years.

          Personally, this is one of the most brilliantly crafted arrangements I’ve ever encountered. I’m a fan of creative dealmaking and this one borders on art.

          Liked by 1 person

          Reply

  18. Mark, I was just looking at research out on MRIN. Ford Equity Research on 1/25, The Street on 1/27 and Research Team on 1/29 all have downgrades reiterated and sell on the stock. But on close reading of the research nothing is mentioned about Google. Don’t these services keep current with what is happening with these type of companies?
    Eric

    Like

    Reply

Leave a reply to Eric Cancel reply