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POLA--On a tear today which I'm afraid I just killed by dumping a portion of my "much too large" position between 5.25 and 5.30. My cost is 5.24 so feel lucky after recent earnings to unload some at a very modest gain. I plan to sell more but will still hold a more normal sized position.
CUBI--Must have been one big seller driving it down because it has only traded up recently.
SBLK--"Tanking" this morning after Q3 earnings which look much improved YOY. R59--What's your take?
HCLP--Encouraging SA piece. Makes me want to add to my position. What does the sentence mean about the sponsor not receiving distributions until they reach $.55 per quarter?
CAPC--I added today at .45 on a partial fill. I think they're on a good track to become a much more valuable company. The two main risks I see are whether Chinese competition mimics their products and destroys their margins and growth (e.g. LSCG) and the more general concern that the market collapses and microcaps in particular including CAPC get decimated despite any great numbers they might most the next few quarters. Of course, the latter concern applies to most stocks posted on this board.
POLA--Hweb, I heard that same ambiguity on the call, and you're probably right that over $7 million in Q4 revenue is overly optimistic. Even a significant sequential Q4 increase in revenues and backlog along with enough tangible evidence/guidance that sales are rapidly escalating into 2018 should be enough to push the stock back up. Do your congratulations apply to me for buying in the low 4's if I also bought in the 6's and 5's?
POLA--I know most of you are "non believers" because they have stumbled ramping up new customers and sales to Verizon have slowed. Management's credibility no doubt has suffered in terms of their ability to execute on bullish sales forecasts. However, just because a sales ramp has yet to materialize doesn't mean it won't happen, and based on the conference call, Q4 could very well see a significant increase. While Q3 sales were a disappointing $3 million, they said on conference call that Q4 sales would "very likely" exceed the $7.2 million in Q4 last year. They said they had already shipped $2 million in Q4, had $1.7 million in backlog as of date of conference call and were getting additional orders in clusters from their newest US Tier 1 customer following their recent order for Puerto Rico. They also said they have well over $100 million in international RFPs they're bidding on, most of which are in their final stages. Of course they have to win business at decent margins, but the market opportunity is very large.
If they can post turnaround revenues and backlog for Q4, I think that will drive the stock price more than earnings. At $7 million in revenues for Q4 I estimated approximately 10 cents in earnings although their margins are fluid and hard to guess and Q4 can often have bonus and other expenses that can ding earnings.
You'll notice that the stock has been bid up almost feverishly in the last few days despite a down market. I think a number of institutional holders are still believers and are increasing their positions. My average cost is 5.25, and am over-weighted as I kept averaging down. I plan to lighten up if/when I can get out at cost.
SLBK--Sinking today. I'm I missing news?
AMS--I own it but feel a little stuck in it because of the low volume and apparent lack of operating momentum. They were negotiating for a number of new locations and made it seem like they were close to at least a few being finalized--then radio silence for months. May have all been just aspirational hype.
OT--Anybody else having trouble accessing etrade?
POLA--FWIW on the conference call as part of the prepared remarks and then in response to two follow up questions, they said they were confident that revenues in Q4 would exceed last year's Q4 of $7.3 million compared to just reported $3 million in Q3. They now have over $100 million in RFPs from around the world. But we may not know whether they achieve that until as late as 3/31/18 unless they choose to PR sooner.
The CEO and majority owner wasn't impressive and seemed confused and unprepared by pretty basic, non threatening questions. He even apologized and attributed it to jet lag. The CFO seemed much more with it and bailed his boss out several times.
POLA--Yes, a bad quarter indeed. Never have seen a PR with a with a higher ratio of optimism to results.
Looks like a good day to be in shipping stocks
Of course, the three examples I gave (AMS, POLA and ESCC) in an earlier post of stocks that could be running into year end tax loss selling pressure were all up today.
AMS, POLA and ESCC--With so many stocks up this year there may be higher than normal tax loss selling pressure on the relatively few like these that are down.
TSLA--I had assumed it took months to take delivery of a TSLA. When I saw that the tax credit is on the chopping block to expire this year, I called my local TSLA dealer and learned they have plenty of S and X Models in stock, and you can even get a delivery by year end if you make a custom order that needs to be assembled. Makes sense that they would redeploy assembly lines to the Model 3.
Since CCEL is over a 5% holder and filer, I think they would have to file if their last filed position increased or decreased more than one percentage point. In any case don't see how pushing the price around in any way messes with Red Oak. All that matters is whether Red Oak can find a buyer willing to pay more than CCEL for the recurring revenue. Based on some of CCEL's share purchases, they seem willing to pay at least .006 per share for control. If someone else doesn't step up Red Oak eventually will have to sell to CCEL, but CCEL can only wait unless they choose to do a hostile tender which is expensive and risky.
TSLA reminds me of AMZN in its early years. Huge ambitions, massive capex and growing losses even as revenues ramped. Many doubters along the way. Ultimately Bezos built one of the most valuable companies in the world, and Musk seems a similar visionary with plenty of capital market support. That said I've never invested in either as my investment horizon isn't that long.
POLA--5.01 -.26 Under selling pressure leading up to earnings next week. Despite most recent bullish PR,seems to be little confidence they have jump started sales. Action doesn't bode well for earnings. I keep averaging down but am over my skis so won't buy anymore.
HCLP--Down after hours. Maybe EPS disappointed.
HCLP--Expecting 2.7-2.9 million tons in sales in Q4 compared to 2.45 million just reported. That's a very healthy sequential increase.
HCLP--Price rising despite light volume as some apparently want in before after hours earnings announcement.Makes selling at least some before market close more tempting. Haven't sold any yet.
HCLP Cliff --I can't PM and I'm sure have already taxed the Board's interest in UBTI and IRA's so this is last post. UBTI was originally created to tax 501(c)(3)s for generating income unrelated to their tax exempt purpose (eg IRS went after income from gift shops and restaurants at tax exempt museums). It was then expanded to cover other income including apparently MLP income to IRAs.I'm imagining the IRS couldn't stomach no tax at either the MLP or the IRA unit-holder level, so got a law passed to impose one.
HCLP IRA UBTI Cliff--Wow, below is what I got back from IR regarding UBTI. It's actually a huge issue much more serious than I thought. ALL of your pro rata share of income (independent of distributions) is subject to UBTI over the $1000 exemption. If HCLP earns $2 per share annually (for sake of example) then owning over 500 shares would throw you over the exemption if you held it for the full one year period and got your full pro rata allocation of that income. Unless you fall under the exemption, it's hard to see how it makes sense to hold an MLP in your IRA. Cliff, thank you for bringing this issue to light.
Response from IR:
In summary, all MLP income allocable to a charitable institution or a tax-deferred vehicle like IRAs is Unrelated Business Taxable Income (UBTI). UBTI is a concept for tax exempt organizations such as charities, but extends to IRA and other tax deferred vehicles. So the "unrelated" is with a view to a charitable organization and does not have a direct correlation to a retirement account.
That said, all of the income from HCLP is UBTI as the income from the partnership is unrelated to the business purpose of the IRA. It is reported on the Schedule K-1 provided to the investor each year.
For more detail, all taxable income (and UBTI) allocations are individualized based upon the unique investors. Factors include (i) date of purchase, (ii) price at purchase, (iii) date of sale, and (iv) operations of the partnership during the ownership period. There is no way to state a general amount of UBTI for partners, other than to say all the taxable income allocated on a K-1 is expected to be UBTI.
There is a $1,000 de minimus rule and therefore the entire IRA must be analyzed to determine actual tax liability. How much would be taxable to an IRA depends on the factors described above and other holdings in the IRA. One cannot look to an investment HCLP alone.
Hope this helps,
Marc
Per my previous posts I think Red Oak must be working on a sale because they're neither trying to promote the stock price nor energize the company's operations. I agree that a sale seems to be the only endgame for them. Their interests are aligned with all shareholders in working to get the best price. Nonetheless, they may not want to communicate anything that might push up the share price before a firm transaction is announced. The bigger the delta between the agreed sale share price and the share price just before announcement, the better the deal looks which lessens the potential for shareholder lawsuits. We know CCEL was interested and buying shares in the open market at more than 2x Red Oak's cost. We know the $2.5 million in annual recurring revenue is valuable. It's perplexing why a sale is taking so long. Maybe one or more transactions have fallen through? Maybe there's only one buyer left and the negotiations have reached an impasse? Eventually they will have to either announce a transaction or provide an update. It's understandable they don't want to disclose a deal is pending as that could give a buyer more leverage in negotiations. I don't believe Red Oak is just sitting on their hands with no exit in sight.
DEST--Sold half of my remaining position so now only 25% of original shares. Keeps going up but hard to value. Should probably sell it all but enjoying the ride.
HCLP--A little disconcerting that stock under selling pressure before Oct 31 earnings announcement. Does the "inside" money know something? It could just be consolidation from run up since mid August. I have limit order pending to buy more at 9.50 which wasn't hit even though that was low of day.
AMS finally starting to perk up. Good news coming or just a rising tide carrying all ships?
HCLP IRA UBTI Cliff, I emailed HCLP IR and will post any reply re UBTI estimates. One thing I remember from a prior tax year when I had some UBTI generated by a partnership investment, the GP sent me a form to fill out where I had to undertake either that (i) I had aggregate UBTI from all investments of less than $1000 or (ii) I had more than $1000 and would report on my tax return. I believe the IRS regulations required them to get that undertaking from me.
K-1 in IRA and UBTI--True Cliff although very hard to generate $1000 in UBTI from single investment and don't think IRS has mechanism for aggregating UBTI from multiple trades. Of course, it could surface if you were thoroughly audited.
HCLP and other stocks with K-1s--If you invest through an IRA account, I think you can ignore any K-1s received as you're only taxed on IRA distributions.
DEST--Sold half of my small position for 100+% gain in 5 weeks. Hard to value but think it could go higher. New interim CEO serious about cost cutting and balance sheet is manageable. $30 million market cap still seems low for market segment leader with almost $400 million in annual sales.
CCEL reported a strong Q yesterday after market close
POLA--Thanks Skillz. That's very helpful and I really appreciate it.
POLA--Backsliding after spike last week on bullish PR. Skillz, recognizing POLA probably isn't on your shortlist given hard to predict revenues and earnings, what does the TA look like after this pullback?
POLA--While the initial order of 57 generators to Puerto Rico doesn't really move the needle, the PR is encouraging because:
--it confirms a new Tier 1 wireless customer in addition to Verizon
--As 1300 cellular sites are down in Puerto Rico there should be potential for waaaaay more than 57 generators
--at the end of the PR they indicate receiving other hurricane related RFP's for the prospect of additional orders.
While increases in revenues and backlog ultimately will be the bottom line drivers of the share price, the hurricanes served to jump start and accelerate POLA's sales to new customers which had stalled out. If they can execute well and build on these new relationships, it will put them back on a growth path.
Without looking past all of the misery caused by the hurricanes, they have ended up helping POLA. The best time to sell backup generators is after massive power outages.
APWC--Annual meeting is in two weeks. Even though their parent owns 75% of their stock, some vocal SHs pressured them into establishing a dividend policy which provides for an annual dividend of excess cash flow but essentially still at the discretion of the Board. They had a good year in 2016 and audited financials have been finalized. There's no evident reason why they shouldn't declare some dividend for 2016, and they may want to do so prior to the Oct 20 annual meeting or risk getting an earful from unhappy SHs. If they do, it probably will be a modest amount given the history so probably won't move the share price much.
POLA--Surging today on twice average volume. Two hurricanes can only help stimulate their generator sales to corporate buyers. Revenues and backlog this just ended Q should be much improved when reported in November.
SVVC--I bought some at 8.01 even though it seems like a liquidity trap. It reminds me of APWC with a huge NAV/SP gap and where management has dithered for years and done nothing to either effectively promote the SP or get cash back to SHs.
PCMI--Sold half my position (which was over weighted because I kept averaging down) at my average cost of 13.40. Plan to be more patient with the rest as still seems cheap albeit not without risk.