Our New Year’s Message – 2017 Will be Yuge!

Billions of people will say goodbye to 2016 and welcome in 2017 tonight. We will all (well, mostly) drink champagne, make our New Year’s resolutions, and then wonder how long they will last. In some years, events occur that we instantly recognize as being destined to become part of the historical record: 2008 – recession and market crash; 2001 – 9/11 terrorist attacks; 1999 – tech bubble burst; 1986 – stock market crash; 1963 – the assassination of JFK. Other years do not get such star billing except when being discussed in hindsight.

We believe that 2017 shall go down as a defining historical moment in governance – it has the potential to be “Yuge”. Millions of years ago, when tribes were being formed amongst our knuckle-dragging ancestors, the most physically gifted took the role of tribal leader. If you aspired to become a tribal leader, you had one path – kill the current tribal leader. As the centuries went by, we started walking more vertically and tribal leaders transformed, by introducing the concept of reward in exchange for support, the position into a monarchy – a framework of governance and leadership that could be passed through to heirs. No longer could you simply hit someone on the head with a rock and become the new leader, now you had to defeat the King’s, or Queen’s, army.

That form of governance continued for thousands of years until the famed “shot heard round the world”. The American colonies decided to rid themselves of an allegiance to a crown they believed did not have their subject’s best interests in mind. Luckily for the world, the leaders of that armed insurrection were learned men and formed a constitutional republic that was uniquely defined by the orderly transfer of power based on elections. Enter the United States of America and the age of democracy.

Until 2017, America’s leaders had been plucked from the ranks of people that had previously been receiving a government paycheck – legislative or military leaders. Donald Trump has changed that dynamic for the first time since George Washington. Voters chose a President that has never worked in government, but successfully campaigned on a platform of bringing corporate boardroom skills to the Presidency. We have no illusions that running a corporation, no matter its size, is different that running a government. We also have no illusions that our current government is in dire need of the budgetary and negotiating skills that are found in America’s corporate boardrooms.

2017 will be remembered for being a key step in the evolution of governance. From tribal leader, to monarch, to experienced legislative or military leader, to corporate leader. This is an experiment. It could turn out good or bad and most likely be somewhere in-between. But on this first day of 2017, it should be recognized that this year will go down in history as the year voters gave the most powerful office in the world to a person without a history of working in government. The voters rejected tradition and gave the office to a person based on the promise of implementing their corporate leadership and skills. We wish Mr. Trump all the success he can bring us. And if successful, the world shall see more of his kind. But he will always go down as the first.

 

Our Picks for 2016 – If We Had a Time Machine

As we say goodbye to 2016, let’s take a look at some of the best performing Nasdaq small cap performances. The stocks below are our choices for what we would have bought if we could just borrow someone’s time machine. If you happen to have one, we promise that we will return it in better shape than we got it!

  1. Corbus Pharmaceuticals Holdings, Inc. (Nasdaq: CRBP) – This biotechnology firm leads our list with a whopping return of excess of 425% for 2016. Four analysts cover CRBP – all rate it “Strong Buy”. Consensus price target is $18.
  2. Oclaro, Inc. (Nasdaq: OCLR) – OCLR manufactures optical oriented internet infrastructure equipment. YTD returns are over 170%. Ten analysts cover OCLR – nine rate it as a “Strong Buy” while one rates it as a “Hold”. Consensus price target is $12.
  3. Hudson Technologies Inc. (Nasdaq: HDSB) – Hudson Technologies specializes in refrigeration. Cold must be good business – HDSN is up almost 175% YTD. All three analysts that cover the stock give it a “Strong Buy”. Consensus price target is $9.50.
  4. Energous Corporation (Nasdaq: WATT) – Energous develops wireless charging technology. Investors seem to like the idea as WATT is up over 130% YTD. All three analysts that cover WATT give it a “Strong Buy”. Consensus price target is $15.50.
  5. TTM Technologies Inc. (Nasdaq:TTMI) – TTM Technologies designs and manufactures circuit boards. It may not sound sexy, but investors loved TTMI in 2016 – sending it up almost 120%. Three analysts cover TTMI – two rate it “Strong Buy” and one rates it a “Buy”. Consensus price target is $15.00.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

HMN Financial Inc. (Nasdaq: HMNF) Stellar Results but is Anyone Watching?

HMNF Financial, Inc. – Nasdaq: HMNF

Shares of HMN Financial Inc. bucked the banking sector trend today and ended up over 6%. HMNF, traded on the Nasdaq, closed at $17.35 on Wednesday and closed today at $18.50 on heavy volume. Today’s rise in value was notable when positioned against the Thomson Reuters Financials Index that saw a 0.27% drop. However, HMNF has been doing well for years. Since it traded below $2.00 in 2012, the shares of MNF Financial Inc. have had a relatively steady climb upwards.

HMN Financial, Inc. is a stock savings bank holding company, which was incorporated in Delaware in 1994. The Company owns 100 percent of Home Federal Savings Bank. Home Federal, originally chartered in 1934, has a community banking philosophy and operates retail banking and loan production facilities in Minnesota, Iowa, and Wisconsin. The Bank has two wholly owned subsidiaries, Osterud Insurance Agency, Inc. which offers financial planning products and services, and HFSB Property Holding LLC, which acts as an intermediary for the bank in holding and operating certain foreclosed properties.

HMN Financial Inc. had impressive 3rd quarter results. From their press release:

Year to Date Summary

  • Net income of $4.7 million, up $2.8 million, compared to net income of $1.9 million in first nine months of 2015
  • Diluted earnings per share of $0.99, up $0.61, compared to diluted earnings per share of $0.38 in first nine months of 2015
  • Net interest income of $19.5 million, up $5.2 million from first nine months of 2015
  • Total assets increased $43 million, or 6.6%, in first nine months of 2016

Interestingly, no analysts cover HMN Financial Inc. An interesting observation when you consider the shares have increased 900% since 2012. There is a lot of inside ownership and little short sales on HMNF.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/29/2016
Ticker Symbol HMNF
Last Price a/o 4:00 PM EST  $                    18.50
Average Volume 3,400
Market Cap $77.9 million
Sales $5.8 million
Shares Outstanding 4.5 million
Share Float 3.52 million
Shortable Yes
Optionable No
Inside Ownership 31.36%
Short Float 0.06%
Short Interest Ratio 0.65
Quarterly Return 22.10%
YTD Return 50.22%
Year Return 50.22%

Fortress Biotech Inc. (Nasdaq: FBIO) Soaring in Pre-Market

Fortress Biotech, Inc. – Nasdaq: FBIO

Shares of Fortress Biotech Inc. are up over 50% on heavy volume in pre-market trading. FBIO, traded on the Nasdaq, closed Wednesday at $2.29, but Thursday pre-market trading has seen the shares hit $3.50. Investors appear to be flocking to FBIO based on reports that a cancer-stricken patient had responded favorably to a treatment developed by Fortress’s Mustang Bio Inc. unit using T-Cells. The reports suggest that the patient had not experienced improvement with traditional approaches.

Dr. Lindsay A. Rosenwald, Fortress Biotech’s Chairman, President and Chief Executive Officer, said, “We are excited to share this unprecedented research conducted by Mustang’s partners at City of Hope, which confirms the potential of MB-101 to be a breakthrough immunotherapeutic targeted against GBM, an almost universally fatal brain tumor. MB-101’s compelling clinical activity adds to the growing pipeline of therapies developed by our Fortress Companies that have the potential to transform the treatment of life-threatening diseases.”

Michael S. Weiss, Mustang Bio’s Executive Chairman, commented, “We are extremely encouraged by the response seen in this patient.  As the first patient ever to receive intraventricular delivery of CAR T cells for brain tumors, we see this as proof of concept that CAR T cells can be delivered safely and with remarkable effect to patients with GBM.  This robust response has prompted the expansion of our Phase 1 study to evaluate intraventricular administration in a larger cohort of patients.  Given the poor outcomes for patients with GBM, we believe if we see additional patients with this type of response that we can explore a possible accelerated approval pathway, similar to that proposed by some of the other CAR T companies, which are targeting different forms of cancer.”

The sole analyst that covers FBIO rates it a “Strong Buy” with a price target of $11. FBIO had traded above $12 in 2013 and Fortress Biotech has never had a positive year of EPS. However, 2015 was the first year Fortress Biotech reported any sales – $900,000. FBIO appears to be a favored target of short-sellers and investors should perform their own due diligence prior to making any investment decisions as biotech shares are notoriously volatile.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/29/2016
Ticker Symbol FBIO
Last Price a/o 7:22 AM EST  $                      3.45
Average Volume 90,600
Market Cap $104.84 million
Sales $4.2 million
Shares Outstanding 45.78 million
Share Float 29.28 million
Shortable Yes
Optionable Yes
Inside Ownership 0.80%
Short Float 12.45%
Short Interest Ratio 40.23
Quarterly Return -22.11%
YTD Return -17.92%
Year Return -17.03%

 

Kate Spade & Company (Nasdaq: KATE) Up on Rumors of Sale

Kate Spade & Company – Nasdaq: KATE

Shares of Kate Spade & Company continue to trend upwards after gaining over 20% during the regular trading session on unconfirmed reports of a company sale. Kate Spade & Company trades on the Nasdaq under the ticker KATE. Shares ended Tuesday at $14.51 and are over $18 in after-hours trading today.

Kate Spade & Company debuted on February 26, 2014, but the initial sparks formed far earlier in the minds of two imaginative and driven women. Liz Claiborne (in 1976) and Kate Spade (in 1993), each frustrated they couldn’t find what they believed women were looking for in the marketplace, took matters into their hands and founded their own companies.  Today, Kate Spade & Company designs and markets accessories and apparel principally under two global, multichannel lifestyle brands: Kate Spade New York and Jack Spade.

In 2014, KATE traded over $40/share. EPS has been inconsistent and in 2016 mustered only $0.17 on sales on $1.24 Billion. However, sales have increased each year since 2012. Fourteen firms follow Kate Spade & Company. Nine analysts have rated KATE as a “Strong Buy”, one a “Buy” and four a “Hold”. The consensus price target for KATE is $20.50.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/28/2016
Ticker Symbol KATE
Last Price a/o 4:13 PM EST  $             17.98
Average Volume 2.86 million
Market Cap $1.86 Billion
Sales $1.34 Billion
Shares Outstanding 128 million
Share Float 127.15 million
Shortable Yes
Optionable Yes
Inside Ownership 0.64%
Short Float 2.82%
Short Interest Ratio 1.26
Quarterly Return -19.70%
YTD Return -18.35%
Year Return -15.44%

Randgold Resources Ltd. (Nasdaq: GOLD) Mining Across Africa

Randgold Resources Ltd. – Nasdaq: GOLD

Shares of UK-based Randgold Resources Ltd. have gapped up four days in a row. Traded on the Nasdaq under ticker symbol GOLD, shares have risen almost 5% this week. Randgold’s exploration strategy is based on the discovery of world class orebodies within the major greenstone belts of West and Central Africa.

Rangold Resources core strategy is to discover world-class orebodies and develop them into profitable mines such as those they operate in Morila, Loulo, Gounkoto and Tongon. Their business model attempts to shield shareholders from the volatilities commonly found in the commodity price cycle.

Chief executive Mark Bristow said Kibali and Tongon had bounced back well from the technical issues that had plagued them in the first half of the year while the flagship Loulo-Gounkoto complex continued on its steady course. He said it was worth noting that despite the high level of activity, there had been zero lost-time injuries across the group during the quarter.

“Tongon got its mills back up at the end of June and Kibali ramped up production, boosting group throughput by 13%. Unit costs were also better, with decreased processing costs supported by lower strip ratios at Tongon and Kibali.  The higher gold price also contributed to the significant increase in profit,” Bristow said.

Four analysts rate GOLD a “Strong Buy” and two rate it as a “Hold”. The consensus price target fr Randgold Resources is $100.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/28/2016
Ticker Symbol GOLD
Last Price a/o 10:53 PM EST  $             74.82
Average Volume 1.13 million
Market Cap $6.8 Billion
Sales $1.12 Billion
Shares Outstanding 93.31 million
Share Float 92.55 million
Shortable Yes
Optionable Yes
Inside Ownership 3.90%
Short Float 1.88%
Short Interest Ratio 1.55
Quarterly Return -27.46%
YTD Return 18.49%
Year Return 18.21%

 

Arca Inc. (Nasdaq: ARCI) Worth Looking at Management Team?

Arca Inc. – Nasdaq: ARCI

Arca Inc. trades on the Nasdaq under the ticker symbol ARCI. Despite sales in excess of $100 million for the last five years, ARCI is extremely thinly traded. What may be of importance to traders is that the CEO has a history with Live Ventures Inc (Nasdaq: LIVE) – a firm that just reported a large earnings increase.

ARCA, Inc. has three business sectors that provide an array of appliance services and programs. ARCA Recycling, Inc. and ARCA Canada, Inc. provide turnkey appliance recycling and replacement programs for utilities. These programs offer integration, data management and customer service. ARCA Advanced Processing, LLC provides recycling services designed to guarantee that every appliance is fully de-manufactured and hazardous materials are decommissioned safely. ApplianceSmart, Inc. offers ENERGY STAR® appliances to utility-sponsored programs and consumers. ApplianceSmart is one of only four retailers in the nation, and the only independent retailer, that conforms to the recycling standards established by the Responsible Appliance Disposal (RAD) program.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/28/2016
Ticker Symbol ARCI
Last Price a/o 9:33 PM EST  $               1.07
Average Volume 44,100
Market Cap $7.67 million
Sales $103.5 million
Shares Outstanding 7.1 million
Share Float 4.06 million
Shortable Yes
Optionable No
Inside Ownership 35.87%
Short Float 0.10%
Short Interest Ratio 0.1
Quarterly Return 11.34%
YTD Return 2.86%
Year Return -5.99%

 

Ocera Therapeutics Inc. (Nasdaq: OCRX) Up Big in Pre-Market

Ocera Therapeutics Inc. – Nasdaq: OCRX

Shares of Ocera Therepeutics Inc are up over 25% in pre-market trading. Shares are traded on the Nasdaq under the ticker symbol OCRX. Ocera Therapeutics is a clinical stage biopharmaceutical company focused on the development and commercialization of novel therapeutics for patients with serious diseases in areas of high unmet medical need.

Ocera’s lead drug candidate, OCR-002, is an ammonia scavenger which aims to remove ammonia from the blood. Elevated ammonia is believed to be one of the primary causes of hepatic encephalopathy (HE). OCR-002 is the subject of STOP-HE, a Company-sponsored Phase 2b trial, a Company-sponsored Phase 1 trial, and two externally-sponsored Phase 2a trials. OCR-002 has received Orphan Drug designation in both the U.S. and Europe and has been granted Fast Track status by the U.S. Food and Drug Administration.

Four firms follow Ocera Therapeutics. All four of their analysts rate OCRX a “Strong Buy” with a consensus price target of $10. Analyst confidence may be rewarded as OCRX has experienced increasing, though negative, EPS every year since 2011. However sales have been minimal and interested investors should view OCRX and all biotech companies with extreme caution and perform their own due diligence.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/28/2016
Ticker Symbol OCRX
Last Price a/o 8:13 AM EST  $               3.00
Average Volume 266,900
Market Cap $50.95 million
Sales $0.1 million
Shares Outstanding 23.2 million
Share Float 22.7 million
Shortable Yes
Optionable Yes
Inside Ownership 0.40%
Short Float 0.74%
Short Interest Ratio 0.63
Quarterly Return -15.38%
YTD Return -29.49%
Year Return -30.60%

 

Smart Sand Inc (NASDAQ:SND)

Magellan Petroleum Corporation (Nasdaq: MPET) Continues Massive 2016 Gains

Magellan Petroleum Corporation – Nasdaq: MPET

Shares of the Magellan Petroleum Corporation were trading in the $5 handle in the first week of December. Today the shares, traded under ticker symbol MPET on the Nasdaq, traded as high as $10.40.

Magellan Petroleum Corporation, based in Denver, CO, is an independent oil and gas exploration and production company focused on CO2-enhanced oil recovery projects in the Rocky Mountain region. Magellan also owns significant exploration acreage in the Weald Basin, onshore UK, and an exploration block, NT/P82, in the Bonaparte Basin, offshore Northern Territory, Australia, which the Company currently plans to farm out and a 1.9% ownership stake in Central Petroleum Limited, a Brisbane, Australia-based junior exploration and production company that operates one of the largest holdings of prospective onshore acreage in Australia.

Magellan Petroleum conducts operations through three wholly owned subsidiaries corresponding to the geographical areas in which the Company operates: Nautilus Poplar LLC in the US, Magellan Petroleum (UK) Limited in the United Kingdom, and Magellan Petroleum Australia Pty Ltd in Australia.

It is noteworthy that MPET traded below $0.25 in January – making the shares one of the Nasdaq’ largest annual gainers for 2016. MPET is followed by two analysts – one rates it a “Buy” and one a “Hold”.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/27/2016
Ticker Symbol MPET
Last Price a/o 4:00 PM EST  $               9.88
Average Volume 135,370
Market Cap $56.09 million
Sales $-
Shares Outstanding 6.09 million
Share Float 4.66 million
Shortable Yes
Optionable No
Inside Ownership 13.10%
Short Float 14.80%
Short Interest Ratio 5.1
Quarterly Return 78.83%
YTD Return 1574.55%
Year Return 1361.90%

Canadian Solar Inc. (Nasdaq: CSIQ) Up Today

Canadian Solar Inc. – Nasdaq: CSIQ

Shares of Canadian Solar Inc. are up over 6% in today’s trading on heavy volume. The shares trade on the Nasdaq under the symbol CSIQ. CSIQ had traded under $5 in 2012 before going over $40 in 2014. Since then the shares have pulled back despite increasing sales. EPS for CSIQ hit their high in 2014 when Canadian Solar Inc. posted $4.40 EPS. Sales have been more consistent – increasing every year since 2012 and posting $3.47 Billion in 2015.

Founded in 2001 in Canada, Canadian Solar is one of the world’s largest and foremost solar power companies. As a leading manufacturer of solar photovoltaic modules and provider of solar energy solutions, Canadian Solar also has a geographically diversified pipeline of utility-scale power projects in various stages of development. In the past 15 years, Canadian Solar has successfully delivered over 17 GW of premium quality modules to over 90 countries around the world. Furthermore, Canadian Solar is one of the most bankable companies in the solar industry, having been publicly listed on NASDAQ since 2006.

In recent news, Canadian Solar Inc announced on December 19, 2016, that it has secured GBP 49.3 million (US$62.8 million) in a non-recourse term loan facility to refinance a portfolio of 10 solar power plants, with total capacity of 50 megawatts in the United Kingdom. National Westminster Bank (NatWest), a subsidiary of RBS Group, is providing the 18.7-year term facility. Part of the proceeds will be used to repay a construction loan of GBP 28.1 million (US$35.8 million).

Nine analysts cover Canadian Solar Inc. Two rate CSIQ A “Strong Buy”, six rate the shares as a “Hold”, and one has it at “Underperform”.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/27/2016
Ticker Symbol CSIQ
Last Price a/o 3:29 PM EST  $             13.12
Average Volume 1.67 million
Market Cap $722 million
Sales $3.3 Billion
Shares Outstanding 58.56 million
Share Float 45.3 million
Shortable Yes
Optionable Yes
Inside Ownership 31.00%
Short Float 16.12%
Short Interest Ratio 4.4
Quarterly Return -2.68%
YTD Return -57.42%
Year Return -57.96%