PORTFOLIO POSITION REVIEW: ONE BY ONE
It has been awhile since I put together one of these. Now is the time since I'm beginning to get the feeling that it may be time to begin shifting things around a bit. I also feel that we are very close to a point in time where I will either be moving into an even heavier cash position (at 50% right now) or I'll be moving into a 100% invested position. Either way, the second half of my year will likely depend on decisions made over the next several weeks.
No pressure at all. None.
Here are my thoughts on current positions:
GSIG - Absolute frustration here. The only consolation is that I bought into the company when it was in bankruptcy during late 2010 at $2 and change, eventually riding it up to above 10 before selling in early 2011. Perhaps it is my reluctance to let it go because of that profit that has kept me around. But when I look at the fundamentals here, I can't argue with it as an investment. It has all the attributes I like: Great management, low float, restructured, undiscovered and under-appreciated. From a value perspective it is trading at less than 10 times forward earnings and continues to generate cash on a quarter by quarter basis. Additionally, the company has taken the fiscally conservative approach of reducing debt at every opportunity they get. While this doesn't allow them to leverage up and go for the gusto so to speak, it is a prudent move given the history of the company.
The price action just stinks, however. It has been caught in this extraterrestrial sideways range for about a year and a half. It will eventually be a $20 stock. I just am not sure if I have the patience to stick with it when there seem to be more expedient opportunities out there.
ATNY - The past few days have been difficult here. Earnings were released and obviously have been given a thumbs down by the market. The major issue with the earnings release is that the restructuring taking place with one of their divisions seems to be taking longer than expected and is proving to be more costly, as well. Not a good combination for a levered company sitting on only $18 million cash. The good news is that the restructuring costs do not effect their cash position. Additionally, it seems that the market is bothered by the negative spending cycle taking place in the defense sector generally. There is a budget crisis that effects defense spending, leaving huge amounts of uncertainty for investors to weigh. There is also the winding down of wars in Iraq and Afghanistan that effect spending in the sector. All in all, not a bright picture for the company.
What is keeping me around is the fact that the company will emerge a leaner entity that will manage to effect growth through acquisitions that have already taken place. This strategy will pay off. Especially when considering the players involved here. Please read the research report to see the full story of those backstopping this company along with valuation info.
SPRT- Performing absolutely wonderfully and looking great on a pure price action basis. There isn't much to say here except: Let your profits run. Bought back into this one roughly one month ago at 2.60. My second go round with the stock after buying it earlier this year at 2.60 and selling at 3.15. It is currently sitting at 3.20. I have no plans of selling.
The original research report on SPRT from January is here.
SPNS - The most recently established position in the portfolios. It is volatile intra-day because of the illiquid nature of the trading. Sometimes I have seen it sport a spread of .30-.40 cents, which is monstrous for a $4 stock.
I like what I'm seeing here, but will be hesitant to add until volume picks up. The original research report is here.
I may be adding another position to this mix in the days to come. As always, I will update on Twitter first and then here later in the evening.
