4/17/2014

7 value based nano cap ideas under $20M market cap, positive YOY revenue growth with strong BS



All with positive YOY revenue growth, strong BS.




This post was an initial attempt to find “cheap but good” stocks that recorded positive YOY revenue change, net asset cheap, below 20 million in market capitalization with stock price under performance versus the market.  There are more solid ideas under 20 million but the following ideas should get deep value nano cap investors something to look at or investors looking to hedge risk. I expect to more fully explore value based nano caps in future posts. Oops ... just noticed FSI does not have YOY positive revenue change.






















TSR, Inc. (TSRI): provides contract computer programming services to commercial customers primarily in the New York metropolitan area, New England, and the Mid-Atlantic region. Services include technical staff on short-term or long-term basis. The company serves Fortune 1000 companies, founded in 1969.

Price per share = $3.40 , EV per share = 1.35, GP per share =  3.75, EV/GP = .36Cash Per Share:  2.13Qtrly Revenue YOY Growth:15.30%, 52-Week Change:  0.29% , % Held by Insiders: 52.85% ,% Held by Institutions: 8.30%,5 Year Average Dividend Yield: 8.60%

Clean capital structure with a long history of distrusting generous cash dividends to shareholders.1.50 per share in cash was distributed to shareholder December 2012. Nano cap value investors Zeff Capital still hold 158,965 shares


FlexibleSolutions International Inc. (FSI): environmental technology company involved in research, development and manufacturing of products that increase crop yield, improve oil and gas operations, reduce the environmental footprint in cleaning and water treatment, save water and save energy. Source Corporate Website

FSI offers HEATSAVR, a chemical product for use in swimming pools and spas that forms a thin and transparent layer on the water surface; ECOSAVR, a disposable dispenser designed for the residential pool and spa market; and WATERSAVR to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals, and irrigation ditches, as well as for lawn and turf care, and potted and bedding plants. The company also offers WATERSAVR—BTI that combines evaporation control with an environmentally friendly method of killing mosquito larvae. In addition, it provides thermal polyaspartate biopolymers for oil fields to reduce scale and corrosion in various water systems; for the agricultural industry to reduce fertilizer crystallization before, during, and after application, as well as to prevent crystal formation between fertilizer and minerals present in the soil; for irrigation to prevent early plugging of drip irrigation ports, reduce maintenance costs, and lengthen the life of equipment; for detergents as a biodegradable substitute for poly-acrylic acid; and for use in personal care products, such as shampoo and cosmetic products. Flexible Solutions International Inc. was founded in 1991 and is headquartered in Victoria, Canada. Source Yahoo

Real estate owned…56,780 sq. ft. facility in Peru, Illinois used to manufacture TPA line of products as well as a building and 3.3 acres of land in Taber, Alberta, Canada.

Market Cap: 9.14M , Enterprise Value:  12.27M
Trailing P/E:5.03
Price/Sales: 0.55 , Price/Book: 0.76
Enterprise Value/Revenue 0.78 ,Enterprise Value/EBITDA: 18.90
Profit Margin (ttm):11.53% , Return on Equity (ttm): 17.15%
Qtrly Revenue Growth (yoy):    -10.80%
Gross Profit: 4.53M , Book Value Per Share: 0.87
52-Week Change:-28.45%
Shares Outstanding:13.17M , Float:  6.85M

% Held by Insiders:  47.93% , % Held by Institutions:  12.30%


April 11, 2014: "Sales were lower in Q1, 2014 than in Q1, 2013. Flexible Solutions’ top line revenue decreased from $4.50 million (Q1, ‘13) to $3.81 million (Q1, ‘14), down 15% year over year.The exceptional cold weather during the quarter reduced uptake by certain agricultural customers. We expect sales in Q2 will recover some of those missed in Q1."


Forward Industries Inc. (FORD): Forward Industries designs, markets, and distributes carry and protective solutions primarily for hand held electronic devices. The company offers carrying cases and other accessories for medical monitoring and diagnostic kits; and other portable electronic and non-electronic products, such as sporting and recreational products, bar code scanners, smartphones, GPS and location devices, tablets, and firearms. It also designs, markets, and distributes carry and protective solutions for hand held electronics devices, including soft-sided carrying cases, bags, clips, hand straps, protective plates, and other accessories made of leather, nylon, vinyl, plastic, PVC, and other synthetic materials. The company was founded in 1954 and is headquartered in West Palm Beach, Florida. Source Yahoo



Why to consider on a watch list…. Tiny profitable nano cap with strong financial position, 33% held by insiders (Yahoo source). No long term debt with cash per of share .80, GP per share .79, 52 Change -15.82%,Qtrly revenue growth (yoy): 20.70%

Data per Yahoo 04/18/14:
Market Cap: 13.52M, Enterprise Value:  7.28M
Enterprise Value/Revenue:0.23 ,Price/Sales:0.42, Price/Book: 1.38

Enterprise Value/EBITDA: 6.04 , Return on Assets: 4.76%
Qtrly Revenue Growth (yoy): 20.70% ,Gross Profit : 6.38M
EBITDA :  1.21M
Total Cash: 6.57M ,Total Cash Per Share : 0.80
Total Debt : 0.00 , Current Ratio (mrq):    3.07
Book Value Per Share:  1.19
52-Week Change: -15.82%
52-Week High: 2.14 , 52-Week Low:    1.41
Shares Outstanding: 8.20M , Float:  5.83M
% Held by Insiders:  33.08% , % Held by Institutions:  13.40%


Command Security Corp. (MOC): “provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. The company offers its security services to customers through Security division and Aviation Safeguards division. Its Security division provides armed and unarmed uniformed security personnel for access control, loss prevention, mobile patrols, traffic control, security console/system operators, and fire safety directors, as well as offers personnel for reception, concierge, and front desk/doorman operations. This division serves governmental, quasi-governmental and financial institutions, healthcare facilities, colleges and universities, residential communities, commercial real estate, industrial, distribution, logistics, and retail customers. The company’s Aviation Safeguards division provides a range of uniformed services for domestic and international air carriers, including security for airlines, aircraft, passengers, and cargo; and baggage screening, wheelchair escort services, special escort services, and skycap services. This division serves 100 domestic and international airlines, airports, airport authorities, and the general aviation community at approximately 20 international airports and 5 regional airports. It also offers administrative services, such as billing, and collection and payroll services for police departments. Command Security Corporation was founded in 1980 and is headquartered in Herndon, Virginia.” Source Yahoo Finance


Taitron Components Inc. (TAIT):

* Note Dual class ownership, negative YOY revenue change, Qtrly revenue change -34.80% 


“Taitron Components Incorporated operates as a distributor of brand name electronic components, and supplier of original designed and manufactured (ODM) electronic components. The company distributes discrete semiconductors, including transistors, diodes, rectifiers, and bridges; optoelectronic devices, such as LEDs, infrared sensors, and opto couplers; and passive components consisting of resistors, capacitors, and inductors. The company also provides ODM components, which are manufactured electronic components based on its own engineering specifications under the TCI private label brand through manufacturing partners. In addition, it offers value-added engineering and turn-key services focusing on providing contract electronic manufacturers (CEMs) and original equipment manufacturers (OEMs) with ODM services for their turn-key projects. The company serves smaller and medium-sized distributors, CEMs, and OEMs. It operates in the United States, Mexico, Brazil, Taiwan, China, Canada, and internationally. Taitron Components Incorporated has strategic alliances with Teamforce Co. Ltd.; Grand Shine Management Limited; and Zowie Technology Corporation. The company was founded in 1989 and is headquartered in Valencia, California.” Source Yahoo




Technical Communications Corporation (TCCO):“For more than 50 years, Technical Communications Corporation (NasdaqCM:TCCO) has specialized in superior-grade secure communications systems and customized solutions, supporting our CipherONE Optimized Network Encryption best-in-class criteria, to protect highly sensitive voice, data and video transmitted over a wide range of networks. Government entities, military agencies and corporate enterprises in over 115 countries have selected TCC's proven security to protect their communications.” Source corporate site


Price per share = $6.47
Market Cap: 11.90M , Enterprise Value: 6.00M
Price/Sales: 1.64 , Price/Book : 1.01
Enterprise Value/Revenue: 0.84
Qtrly Revenue Growth (yoy): 57.10%
Gross Profit:4.14M 
Total Cash (mrq): 6.19M , Total Cash Per Share:3.37
Current Ratio:16.02 ,Book Value Per Share : 6.33
52-Week Change:3.19%
52-Week High(Nov 18, 2013):9.97 ,52-Week Low(Aug 12, 2013):6.00
Shares Outstanding: 1.84M, Float:1.45M

% Held by Insiders: 20.94% , % Held by Institutions:  5.50%




Surge Components Inc. (SPRS):
* Note Dual class ownersip, although appears to have the best price versus intrinsic value of all 7 stocks. 

“Founded in November 1981, Surge Components has grown into  a world class supplier of Capacitors and Discrete Semiconductors. Surge’s capacitor  product portfolio includes Aluminum Electrolytic Capacitors, Film Capacitors, and Ceramic Capacitors.  In the Discrete Semiconductor portfolio, the company’s  strengths include General Purpose, Recovery,  Schottky, and Transient Voltage Suppressor diodes, and a full line of Bridge Rectifiers.” Corporate website

Current price = .75
Market Cap : 6.79M,Enterprise Value: 2.96M
Trailing P/E: 5.77 Price/Sales:  0.28
Price/Book:0.69 , Enterprise Value/Revenue:0.12
Enterprise Value/EBITDA: 2.05 
Profit Margin: 4.92% , Operating Margin: 5.49%
Return on Assets: 6.50% ,Return on Equity: 12.98%
Qtrly Revenue Growth (yoy):  33.60%
Gross Profit (ttm):  6.96M ,
52-Week Change: 7.14%,EBITDA (ttm):  1.44M
Total Cash (mrq):  4.29M ,Total Cash Per Share (mrq):  0.47
Current Ratio: 3.05 , Book Value Per Share:  1.13

Shares Outstanding: 9.06M ,Float:  5.66M




3 comments:

Unknown said...

Thanks. Did you do more work on these? SPRS looks v cheap, more thoughts on it?

Unknown said...

Did you do more work on these? SPRS looks v cheap, more thoughts on it?

ShadowStock said...

i agree that SPRS very interesting, no position. No obvious moat moat. The capital structure needs to be looked at more closely, ie more than on class of stock. Hummingbird used to own the stock (sprs) before Sonkin liquidated the fund. John