HLF looks too cheap in the mid 7s. Looks like a turnaround is in effect there, based on their last earnings report from yesterday. Coming up on a seasonally weak quarter for earnings, but given what they've put up so far, I think analysts are going to have to raise their numbers going forward. Stock and company are hated of course, for its MLM structure and the products they sell. Its trading at ~4x my estimate for FY24 eps, with growth likely in FY25 from its cost cutting measures and growing distributor numbers and easy comps from this year. Too much debt on their bs, but they generate decent cash flow from ops and they have FCF to pay it down (or repurchase more stock). Committed to repaying 1B of debt over next 4 years.

NOA. On the call: Backlog (ending Q3): 3.1 B (up 300MM seq)
Had already announced: Increasing qtrly dividend by 20% from 0.10 to 0.12 CAN; Buyback of 5% of shares starting soon. Oil sands in Canada activity levels are subdued but stable. Outlook in FY25 for this segment is probably similar to FY24. Some upside possible in civil construction. Noted that miners are in a strong LT commodity cycle for copper, iron ore. Only weak spot in end market is in EV demand. Expecting a positive working capital swing in Q4, so FCF should be much better in that quarter. See WC needs moderating in FY25 so FCF should be "more consistent" next year. Seeing a very busy 2025 given contract wins already awarded. Will not guide yet on FY25.

NOA report looks good. As you mentioned, they beat the analyst estimate for Q3 and guided in line for Q4. Just have to keep our fingers crossed on the weather in Australia!

I don't see why this can't get an 8x forward PE. At the midpoint of guidance for FY24 adj eps (4.05 CAN / 2.92 USD) 8x = 23.36/sh. Now bid AH at 18.50

TZOO beat the Q3 estimates entirely on a sharp reduction in advertising exp, which makes sense since they are transitioning to a whole new subscription model. That likely will continue in Q4 and probably the reason behind the expectation for higher profitability. Revenue growth is nil. That's going to have to change, which it should next year IF the subscription model pans out.

Wish I could say I still held those shares i had back then....but sold them a while ago. The interesting thing I'm watching is how many of those "free" members will stay with Travelzoo when it converts to a subscription model on Jan 1. Also, how much will their operating expenses change? Very hard to see through to earnings next year, although I see two analyst estimates for FY26 at 2.23 (up from 1.25 next year)

The momentum is too strong for me. I would be shorting it up here for a short term reversal trade (trading at 17.56 as I write this.) The RSI I track is simply off the charts and begging for a reversal to lower levels

USAP. My sense is that this was probably favored by management since they get to keep all their jobs and the company will basically be operated on a stand-alone basis with the benefit of privately held company financing. The one thing I had been a bit nervous about was the impact of the Boeing strike on Q4 for USAP and next year, especially if it continues to drag on into the end of this year. The aerospace industry and its suppliers are booming and I suspect there is still excess demand for the high quality steel that USAP or CRS produce even if Boeing is a bit of a ST drag.

BTW, look at the forward PE that CRS has been awarded by investors. Its at 24x FY25 eps. USAP sold itself for ~10.2x FY25 eps that looked conservative to me. They chose to use a trailing EBITDA multiple as being a "reasonable" selling valuation. Long winded way of saying I agree with your take Nelson!!

PEV. Beware this, it includes a large one time bargain gain in the operations for the Q.
https://seekingalpha.com/pr/19869161-phoenix-motor-reports-record-9_4-million-revenue-and-14_8-million-net-income-for-first

That included a one-time bargain gain of $33MM. Here's the Q:
https://seekingalpha.com/filing/9120020

Even if you add back an impairment charge of 4.3MM, the company still lost 8.9MM pretax. That's a far cry from the reported GAAP number.

Just sold the last of my HALO position in afterhours on Friday. Probably means its going to spike up on Monday! HALO was a perfect buy in the 30s, as it had lots of potential winners in its pipeline, but investors were worried then about its LT growth rate amid possible patent expirations and some of their potential blockbuster associations having some disappointing results. Its one of several reasons that biotech pharma can often sell at such low adjusted PEs relative to their growth rate.

HALO management did a great job with explaining its 5+ year vision, and that presentation was close to marking the bottom. That and they have executed really well in the last 2 earnings reports, with beat and raise quarters.

Its a great company and well managed IMHO, but HALO has hit my FV. If I were looking for undervalued biotech now, I'd recommend kicking the tires on HRMY, INDV, and AYTU. There's hair on all of them of course, but that's why they're cheap.

KINS. Just a reminder that there is an active ATM capital raise going on here....

"At-the-Market Offering
In May 2024, the Company entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which the Company currently has the ability to issue and sell shares of its Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an “at-the-market” (“ATM”) program. During the three months ended June 30, 2024, the Company sold 56,109 shares of its Common Stock at a weighted average price of $4.84 per share and raised $167,629 in net proceeds under the ATM program. As of June 30, 2024, the Company had remaining capacity to sell up to an additional $16,128,423 of Common Stock under the ATM program."

Q2 10Q

DESP. I do follow it, and saw the last earnings report. IMHO they have a poorly constructed non-GAAP presentation, and I don't agree with their non-GAAP earnings results. I don't agree with: not excluding the tax benefits (I wouldn't have included them AND I would have applied some kind of tax rate) and excluding the pref dividend expenses (I think they should be included unless you adjust the FDS count). Having said all that, they did show decent growth and good improvement y/y with their adjusted pretax margins. Its been selling off on the disappointing top-line guidance, and the local economic outlook for travel in South America. Growth is there, but not at the previous expectations. My adj fd eps for Q2 would have been 0.18, not 0.36/sh. I haven't looked at the Ev / EBITDA ratio which is another confirmation of relative value.

Bottom line, I'd be more interested at 9 or below. My sense of FV is about 25% higher than that.

Nelson, well played on HRTG! Congrats on the big gain in just a few weeks!! I just missed getting on board when it went into the low 6s. If you think past price:book value ranges will hold again, I'd be a heavy seller too at these prices!

https://seekingalpha.com/symbol/HRTG/charting?compare=HRTG&metric=priceReturn%2Cpb_ratio

If you are just looking at forward PEs, still cheap on an absolute basis, but probably fairly valued given that its an insurance company, and that income statement has all kinds of moving parts to it....

Nelson, what are your thoughts on KTCC post Q4 CC? They had some interesting things to say about potential cost savings in FY25, but what confused me is that a chunk of that came in Q4?

This part of the conversation confused me:

Bill Dezellem

Brett, would you please start by sharing with us what proportion of the $10 million of annual savings, or what, roughly $0.70 cents per year. How much of that will be achieved in fiscal ’25?

Brett Larsen

Through the fiscal year 2025 most of it, if not all of it, Bill, we're expecting that those cost savings to occur in the year.

Bill Dezellem

And some did fall into the Q4 -- how about just falls into fiscal ’25?

Brett Larsen

I would say the majority of it fell into our fourth quarter since most of that severance occurred during our third quarter, there was some limited amount but the majority of it was felt in our fourth quarter.

Bill Dezellem

Okay, that is helpful and so that explains why we see revenues down pretty meaningfully, but gross margin increasing completely counter to what we would normally expect.

Brett Larsen

Absolutely.

-------------------------
First, what does cost savings from layoffs in Mexico have to do with GM (which did increase nicely, but I'd assume that came from sales mix and price increases)? And if they had a chunk of those savings in Q4 (lets say $2.5MM savings on pretax), what does that mean for the adjusted pretax margin going forward? Is their SGA already showing the benefits of those cost reductions?

With this company, I know that "Murphy's Law" should be expected.....but it does seem cheap here based on the Q1 guide

BMBL has a lot going on under the surface. You're right that the GAAP numbers look good, but that is largely because they've stopped issuing stock options. I went through the exercise of calculating a non-GAAP number and on that basis, my calc shows their pretax margins declined y/y. Using standardized tax rates and NCI led to a decline in adj net and a drop in adj eps y/y. That and the drop in revenue forecast has put investors into a sell first mode and keeps me on the sidelines. On an EV / Ebitda basis its starting to look a little more attractive; at a price of 4.75, its now getting close to 5x. Its being really stretched to the downside and could rebound a bit in the coming days....but from what level?

Goes into the too hard pile for me. If I were to nibble, I'd start buying in the low 4s, with a FV of about 5.50

Its not my largest position, but its in my top 5. I've generally cut exposure (not just to CRNT) over the past year and have kept my position sizing conservative with each position I do have. Its less than 2% for me. I'd say sell on the rallies and be opportunistic. I added to CRNT when it hit the 2.30s, and will gradually sell it out as it (hopefully) gets back up toward 3 again.

You may already know this, but in my notes for CRNT, back in early 2024 they did discuss a LT revenue target of 500MM in 2026, which was a year earlier than they had expected (but that includes the Siklu acq). Thats a solid 2 yr organic CAGR of 12-13% for revenues in 2025-26 if they can execute.

Nelson, I'd say more like 0.14/sh in 2H, but that's using 7.5% pretax margin (adj for one-times) and a full 20% tax rate. I've also got them closer to 0.11 (using my version of non-GAAP) in the 1H of 2024.

I would point that they did 0.20 in FY23, and I have them at 0.10 in the same period (2H) for last year....so they are on target to showing very good y/y fd eps growth. Again, my disclaimer is that use a 20% minimum tax rate. It didn't matter for reported eps last year, as my non-GAAP number matches what the company reported and what we are using for the comparison.

IMXI another one that missed and guided down slightly so market is punishing its shares, down 19%. Has bought back a lot of shares, so still showing increases in eps y/y. Easy comp in Q3, things get a little tougher in Q4....no guide yet on FY25. They handle a lot of money transfers between Latin America and the US. Demand seems stable, but not much growth at present. Pretax margins have fallen slightly, but the company has also bought back 10-11% of the company shares in the last year, so still able to show y/y fd eps growth. Trading at ~8x FY24 updated estimate, so maybe fully valued.

Yes, the numbers do appear solid for CRNT. I agree with your take on the one time gain in the quarter (it should have been backed out). This actually was discussed on the call, and the reason they kept it in was because they didn't back out the loss taken previously..... Isn't that what non-GAAP presentations are supposed to be doing when looking at non-recurring/one time items?

Tax rate was light too, but even if you adjust for that they still would have earned 0.07/sh in Q2.

Can they improve the margins a bit more? The estimates get a little tougher to beat going forward, and I think they might only be capable of 0.25 (adjusted for those credit recoveries) in FY24. Thats if they can only match what they did in Q2 in terms of pretax margins, and also using a 20% pf tax rate. I would put FV closer to 3, but I try to be conservative.

ODP (Office Depot) could be a candidate for a quick day trade (if you like to buy the panic). It reported disappointing numbers for Q2 and guided down for FY24. RSI levels are through the floor, stock is down 33%

Midpoint of guide ( 4.63/sh), and stock is now trading at 25.50, so <6x. Also trading at less than 5x EV / Ebitda.

More fuel for the consumer led recession/slowing economy theory.

I'm with you on CRNT. I think the fact that its based in Israel has been weighing on the stock lately....

HRMY 32.75 (+5.9%) reported this AM. Strong quarter of results, as they beat on top (slight) and bottom line numbers (larger). I use Non-GAAP for eps, even though it appears that analysts are using GAAP. Heavily shorted stock at ~14% of FDS. The primary short thesis has started to crumble; the petition to label Wakix as unsafe (filed by a short seller in the stock) has been denied by the FDA with no chance of appeal. They continue to advance applications for Wakix in younger patients, which is their primary drug and is used to treat Narcolepsy.

Pipeline looks interesting too:
"Beyond WAKIX, we have expanded our pipeline and diversified our portfolio resulting in three promising orphan rare CNS franchises in advanced stages of development, each with the potential to generate $1 billion to $2 billion in peak sales. "

“......we are executing on our late-stage pipeline across three orphan/rare CNS franchises, which we expect to deliver at least one new product or indication launch every year over the next five years, with multi-billion-dollar revenue potential extending beyond 2040. We also delivered another strong quarter of revenue growth for WAKIX, confirming our confidence in WAKIX being a billion dollar plus market opportunity in narcolepsy alone, while gaining the approval and launching WAKIX in pediatric narcolepsy.”

If they can successfully diversify product sales beyond Wakix, it will remove another plank in the short thesis. I expect the shorts to heavily "defend" the 35 price level; if it closes above that......

Guidance for FY24 revenues was reiterated at 700-720MM. I would estimate that non-GAAP eps estimates will be raised based on their pretax margins recorded in Q2 and YTD, even with a higher effective non-GAAP tax rate of 26% (v y/y tax rate of 21%).

Agreed on GTLS. Added in the low 120s. Also added USAP, MCB, ADFJF.....so many stocks on sale and so many earnings reports to go through.

For what its worth, I think FCF is one of the most volatile fundamental measurements because it incorporates changes in working capital (i.e. changes in current assets and current liabilities). NOA discusses FCF for Q2 here:

"Free cash flow was an outflow of $1.5 million as both changes in working capital balances and increases in capital
work in progress resulted in approximately $30 million of free cash flow being deferred into subsequent quarters.
The primary drivers of free cash flow being adjusted EBITDA of $86.9 million, sustaining capital additions of $37.3
million and cash interest expense of $13.6 million generated $36.0 million in the quarter. Sustaining capital additions
were solely incurred on routine capital maintenance of the heavy equipment fleets in Australia and Canada with no
replacement equipment purchased in the quarter and the levels largely reflecting depreciation of $39.6 million. "

This actually is an improvement for FCF in Q2 2024 vs y/y of outflow of $Can 4.7MM. And the reason for the increase in adjusted pretax margins are the adding back of expenses associated with changes in FV of contingent obligations AND a write off of assets held for sale. Both seem very justified to me to add back. NOA is showing improvement in EBITDA and pretax income, adjusted for non-cash or one time expenses. Also, they are showing improvement in the margins of those metrics on improving revenues too. Comps coming up are easier too.

NOA report for Q2 has a little bit of everything, and whether you like it depends on if you see the glass as half empty or half full. First, don't forget to convert all the numbers to USD (they report in Can $).

The guide is actually down from what they provided in Q1, but the 2H trend should show very strong growth in adj eps. The company had a lot of weather related issues in Q2 in Canada, but things are going very well in Australia (their recent acquisition):

"The second quarter brought more favorable weather in Australia but the oil sands region experienced both forest fires and heavy rains. Site access was initially restricted in May as forest fire protocols were put in place. Those eased as the rains came, but with rainfall at more than double the expected amount for May and June, site conditions deteriorated. Operating sites were inaccessible for fourteen days of May. These first half challenges, combined with the lengthy time involved in transporting and commissioning haul trucks from Canada to Australia, have unfortunately reduced our full year expectations. While clearly disappointing, I am encouraged by our underlying run-rate as the operations teams have been able to confirm that our second half projections remain exactly in line with original expectations. With a challenging first half behind us, we are building towards what I expect will be a very strong 2025."

Also, I caught something in the financials. The company uses the basic share count, not diluted when providing adjusted eps. So, I'd adjust for that too. (Probably has to do with different accounting standards/conventions; NOA is a 6K filer and has ops in Canada and Australia.)

Bottom line, the new guidance for FY24 would indicate fd eps at the midpoint of 3.27(CAN)/2.36 (US). That is up significantly from a year ago, which was 2.28 (CAN) /1.64 (US). And they are indicating that the 2H strength should continue into 2025. The 6K filing has some more details in the Q2 shareholder letter:

"We are bidding several active tenders which have scopes commencing later this year and early 2025 in a variety of projects: winter reclamation work in the oil sands region, early indications showing meaningful increases in volume; mine support work in Ontario; and copper and coal mines in New South Wales and Queensland. Specifically in the oil sands region, we are confident in the stabilized level of contracted work and see this business as solid, providing both growth potential and strong returns through operational excellence and cost reduction.
Our Australian operations continue to be a shining star in our business, with stable weather and the commissioning of certain growth assets resulting in an impressive 10% increase in overall volumes from the first to second quarter. We expect similar demand and results in Australia in the third quarter with another uptick in Q4 heading into an even better 2025 when growth capital and contract wins provide full year contributions. MacKellar, DGI Trading, and Western Plant Hire are operating in a market of strong demand, long-term commitments, and blue-chip clients. I recently toured our Australian operations and was impressed with the quality of our operations, the improvements being made in internal maintenance, the progress of ERP roll-out and systems improvements, and the overall skills, effort and commitment of the operations and administrative teams.

USAP. One last note; on the call they noted that inventories were higher because they were building supply on hand once they shut down for planned maintenance. These shutdowns are rolling (or at least planned well in advance to upgrade/maintain performance in the forges and factories). That can have an impact on sales in the quarter they occur, but it appears they will be able to lessen or even completely mitigate that because of inventory on hand.

I wouldn't advise jumping in with both feet at these levels (39+) if you are looking to start a position because it's quite overbought and probably susceptible to some profit taking in the short run.....but I thought that about CRS too and its been steadily marching higher post earnings and after a big 11% jump on earnings day.

Does anyone know what % of sales at ADF (in Canada) are to aerospace/defense?

Thanks Hweb! On the call, the company addressed the sequential and y/y decline in backlog. The reasons for the decline is twofold:
a) Weakening demand from heavy equipment companies, but this is expected to pick up by end of 2024
b) High lead times in premium alloys business. This has started to come down (i.e. lead times are now 45-50 weeks, down from 70-80 weeks a year ago.) USAP has been working with their premium alloy buyers to schedule in buys whenever slots open up. CRS mentioned this same dynamic at play, so I think any decline in backlog from this area is a bit phantom in nature. Demand is not decreasing at all.

USAP management has said they still aren't firing on all cylinders because of the lack of production/capacity for their premium alloys. Once (if?) demand in heavy equipment resumes, then this will further add to sales and earnings. SGA will be constant at 8.5MM/quarter in 2H. Int expense will be coming down due to refi and because of continuing debt reductions. One of the more bullish calls I've heard, outside of CRS, another competitor.

I think this company can be earning 3.60+ in FY24. Slap a 20x multiple on that, and you can see the potential for further price appreciation.

USAP (Universal Stainless Steel) in with a strong Q2 with 0.90/sh (GAAP), beating estimates by 0.38. Stock trades at 35 up about 6% in premarket. Another competitor, CRS, reported an equally strong quarter and had a very bullish CC a few days ago. Looking to expand its capacity in its premium alloy segment, with additional capacity coming online in stages....likely by mid 2025. Only fly in the ointment is the backlog, which is down sequentially and y/y, but it appears to be high relative to their current quarterly sales. I'm hopeful this will be addressed on the call at 10AM today.

CRS trades at 23x its FY25 estimate. USAP trades at 14x a 12 mo forward blended eps estimate of 2.53. USAP might be able to show seq increasing sales and eps for the rest of this year (from their last CC). I'd guess that the FY24 and FY25 numbers will be increased, and I think the stock is still undervalued given the incredible strength in demand in aerospace for premium alloy steel.

INDV. My estimate for FY24 adj eps is now closer to 1.70/sh (Analysts are around 1.77/sh). Even at a conservative 8x, that would put the stock at 14 - 14.20. And that doesn't even factor in the growth in FY25. FY24 was a difficult year so far, and they still are basically flat with last year through Q2. The problems this year: Medicaid rule changes knocked off a bunch of their patients who weren't able to buy Sublocade to treat their opioid addiction, and the hack of Change Healthcare also slowed patient prescription growth. As they move past these issues, I think the growth will return, perhaps as soon as the 2H of this year. Throw in the accelerated $100MM share repurchase, AND the anticipated $50MM in savings next year since they won't be continuing the sale of one of their drugs (Perseris) and I think you have a strong recipe for growth.

I do think 2.00+ in eps is very likely in FY25. Conservatively, that would put the stock at 16, but it could also trade much higher than that.

Covering my IWM (R2000) short here (19.20s). I had cost averaged into RWM around 18.90

KINS....just remember that they have an active ATM stock sales plan that is currently running. So, its likely the company is selling some shares into this rally.

https://d18rn0p25nwr6d.cloudfront.net/CIK-0000033992/578a4125-670e-47ed-8e90-cad852bfc76a.html

$16.7MM potential in sales, which IF maxed out at current prices is probably ~30% dilution. I doubt they would be able to sell that much at current prices esp given its trading volumes....so dilution would likely be far less than that. The company's forward statements are very bullish and its arguably still cheap.....but I'd advise following Hweb and take some off the table

I'm starting to nibble on a little small cap "insurance" by buying RWM at 19. The price is the inverse of the R2000 (IWM).

The RSI levels are at extreme oversold levels; I'm looking for a snapback by the end of this week.

INDV hit hard this AM by a reduction in its guidance for FY24. Looks like the operating income will be slightly up vs FY23, but this management team is now in the penalty box. There were concerns after the Q1 report, but those were just a beginning of what will be a tougher year ahead than expected. Seems like a bit of an over-reaction (-39% premarket), but when you've got a bunch of investors/traders who hate the prospect of having to wait 3-4 quarters for growth to resume, its usually sell first. My own expectations are that adj eps will now be roughly flat vs FY23, but that is also because of a higher tax rate (24%) v 19% last year. The stock repurchase program will continue and that will help, but I don't expect much of a meaningful growth catalyst until we lap this quarter next year. Stock is now trading at 6x adj earnings.....which is a similar valuation to where some other specialty pharmas I follow trade.

CRNT with positive news in a 6K filing this AM:

The Company announces that it has reached an agreement to collect a debt from a South American customer (the “Settlement Agreement”). Such Settlement Agreement relates to a debt for which the Company fully recorded a credit loss provision in Q4 2022 and to an arbitration proceeding against the Company and its subsidiary as previously reported in a 6K form filed on December 4, 2023 and our 20F form for 2023 filed on March 21 2024. Under the Settlement Agreement, we expect to receive a total of $12M in three installments. The first tranche of $4M was received by the Company on May 24. 2024, and the two remaining installments are expected to be paid subject to several conditions.

According to the agreement, the arbitration proceeding against the Company has been terminated and the customer has waived all its claims against the Company and its subsidiaries.
==========

Seems undervalued at current price levels, esp given the large contract that is due to kick in starting in 2H of this year. A good one to accumulate IMO on choppy price activity if it stays in the 2.50 - 2.70 range

I agree with you on GPN looking a bit oversold and cheap at these price levels. Still a lot of relative weakness today.

Clearly some larger investors are giving up on it. I started a position yesterday and will be looking to add on further weakness.

I still really like INDV. For those that are interested, here is their investor day presentation (very detailed):
https://www.indivior.com/resources/dam/id/1358/Analyst%20Teach%20In%20Presentation%20VersionvF.pdf

The key for them in the intermediate term is getting more patients on their proprietary Sublocade drug, which is injectable and longer lasting than its other offering Suboxone, which competes against generics and is meant for daily, self-administered use. The quick pitch is that Sublocade is more effective as a treatment for opioid addiction since it's not needed daily and it has shown higher effectiveness at keeping people from relapsing. (I wonder if they would consider using HALO as a way of administering it?). Its also far easier to administer to people who are in prison, since its not a daily dose. A lot of their customers/patients have been incarcerated or are on the fringes of society. Addiction (esp opioid) is one of the few issues today that has bipartisan support in terms of finding the funding to help those in need of assistance with effective treatment.

One of the interesting things about this 6K filer is that they file all transactions in their own shares (repurchases) on a daily basis. Wish that this were the case for 8K filers! They are planning on making the US listing their primary listing very soon. They got approval from the shareholders to do this and so were in the US yesterday pitching their story to US investors/analysts.

Nibbling on a beaten down stock today.

NOA. This is a company that provides construction services to miners of coal/ore/oil/precious metals. Last quarter's earnings report was uninspiring, but they do have a near record backlog of 3B (Can $). Upcoming y/y comps seem very beatable, and if they achieve the midpoint of their guidance, they could earn close to $3.29 (USD). The stock trades at 19.70 and is approaching a strong area of price support near 19. It has traded in a channel between 19 and 26 over the past year and I think it could revisit those 52 week highs by the 2nd half of 2024. Trades at Ev/EBITDA ratio of 5x, and the company is projecting FCF of 165 - 185MM Can for FY24

GCT....There is another short report out regarding the company's use of undisclosed related parties to artificially pump up sales and earnings:
https://grizzlyreports.com/gigacloud-technology-inc-another-china-hustle-inflating-key-metrics-using-undisclosed-related-party-shell-companies/

Stock is down about 7% currently, but it was down a lot more at the open

Thanks Nelson! I've been camped out bidding at 3.90 after KINS last earnings report....might have to raise that bid a bit. There was a lot of overhead selling after the Q4 report and the lack of liquidity will probably bring out some long term holders looking to reduce their holdings.

CRNT report was fine; I expected some dilution and added expenses from their last acquisition. They actually did a little better then I expected with GMs coming in stronger. Its the non-GAAP vs GAAP problem; on a non-GAAP basis their adjusted pretax margins increased y/y. Anybody simply using GAAP would probably be a seller.

I still think they can earn roughly 0.28 on a non-GAAP eps basis, and that assumes a proforma tax rate of 20%. I'm holding, thinking the sp will hit the 3.30s later this year.

The report you and I should be talking about is USAP....love that sector and its last report! CRS has hit my FV and I sold it. Too soon! USAP is much cheaper right now vs CRS, and that USAP CC was super bullish.

I understand about the concerns about non-GAAP earnings. That's why I usually pair it with EV / EBITDA. If EBITDA isn't growing, and its ratio to EV is high then I stay away. So many higher growth companies/tech companies use options and have intangible amortization that can make earnings look low, but on a pure cash flow basis they are cheaper than they look on a GAAP earnings basis and thus attractive to potential acquirers. Value "traps" can look cheap on a PE basis but they might have higher EV/EBITDA ratios because of debt or sneaky converts and NCIs. If adjusted EBITDA and pretax margin isn't growing y/y, that's a red flag.

Speaking of sneaky converts, I reread the FVRR 20F, and they can't force the convert holders to take shares as payment in 2025. In fact, they have to pay them in cash (which is a good deal for the convert holders.) So the Ev / EBITDA ratio is a lot higher than I first calculated, probably closer to 12x. They do have plenty of cash available to pay it off, but it will cut their cash balances by more than half if they don't refinance some of it. I've lowered my price target on FVRR

Continue to like IMXI at 21-22. Trades at 10x FY24 eps, with LT growth closer to 12-13%. Last quarter's eps growth was really helped by a large stock repurchase executed by the company that will continue to provide some tailwinds to eps growth in the upcoming quarters.

https://finance.yahoo.com/news/intermex-reports-first-quarter-results-120000877.html