July 2021 Update – $OSS.v, $REPH, $PSD.to, $STC.v, $FTG.v, $XTC.to, $VLN.to, $RELL, $SVT, $FXC.to, $MCR.v

TIKR

I use TIKR to quickly look through ideas and check comparable companies. Would recommend. Referral code below.

They have created a global screener which is great. I recommend playing around with it. Lots of data.

https://app.tikr.com/register?ref=smob7c

Thoughts on Market Activity

Not much to report. The fear of runaway inflation seems to have cooled off to some degree at least for the short term. The delta variant (and uncertain vaccine effectiveness), vaccine hesitancy, staggered global reopening, and the summer doldrums have let to some choppiness over the last month.

My personal underperformance continued this month and for the full quarter. The main culprits are overweight positions in Sangoma Technologies and Viemed. The remainder of the portfolio has outperformed the indexes on the aggregate. Both will have news out soon and it will be nice to get an update.

What I’m Reading

I have been focusing on some more leisure time with family and strength training. Looking for book recommendations.

I am continuing my social media break (mainly Twitter). I continue to only use the app to check DMs. I’m convinced there is value in the app, but I will need to get better at cultivating a timeline that is valuable or considering any time on the app as entertainment and limit it accordingly.

Posts this month

None – sorry ☹

Developments on Companies Mentioned

  • OneSoft Solutions – $OSS.v
    • Share price has been weak lately
      • I think investors are getting impatient and looking for some very material announcements regarding revenue growth and getting to break even
  • Recro Pharma – $REPH
  • Pulse Seismic – $PSD.to
    • Big quarter
      • Rev up to 19 mil
      • Biggest quarter in several years
    • Paid off a bunch of debt
      • Paid of high cost subordinated debt
      • Paid back some of their revolving facility
      • At end of June they only have 4 mil in debt left
  • Sangoma Technologies Corp – $STC.v
    • Provided a business update for Q4
      • Rev of 167 mil
      • Ebitda to exceed 30 mil
      • This bodes well for integration of Star2Star
  • Firan Technology – $FTG.to
    • Reported Q2 fiscal 2021
      • A little weaker than I expected
        • Toronto facility had higher than normal absenteeism due to Ontario gov having a program to increase paid time off
        • Other locations also down
        • Tough simulator comps for this year
      • A bit of currency headwind
    • Still monitoring
  • Exco Technologies – $XTC.to
    • Reported fiscal Q3 with an easy comp last year
      • Outlook was positive
      • Expect capex to exceed $40mil in 2021, which means almost $15mil in Q4
        • Continued to see increased capex in 2022 and likely 2023
      • They set out some 5 year targets
        • 10% rev growth
        • Higher EBITDA and Net Income as well
        • $1.90 EPS in 2026 with no acquisitions
        • New programs, market growth, and market share gains
  • Velan – $VLN.to
    • Reported q2 fiscal 2022
      • They guided for a weak quarter but it was still weaker than I expected
        • Supply chain issues
      • Backlog highest since 2012 and working capital is ramping to meet demand
      • Continuing to hold and give them a couple more quarters to execute before drawing conclusions
  • Richardson Electronics – $RELL
    • Very strong fiscal Q4
      • Guidance was also strong
      • Sounds like lots of opportunities across the 3 different business lines
      • Will be interesting to see if they maintain this momentum
    • Received a patent for wind turbines
      • This is the ULTRA3000
      • A direct one for one replacement of GE batteries and chargers and can be installed with no modifications
  • Servotronics – $SVT
    • Noted this in the 10-K – The Company determined that its previous disclosure regarding management’s evaluation of the effectiveness of internal control over financial reporting was inaccurate as such evaluation was not based on a suitable, recognized control framework in accordance with Exchange Act Rule 13a-15(c).
    • Gotta love microcaps
  • FAX Capital – $FXC.to
    • Nothing new to report but trading at about 0.77x book which is a discount to peers
  • Macro Enterprises – $MCR.v
    • Gate City bought another 2.7% of the company
      • Now owns 15.3% of the outstanding

Feel free to reach out.

Dean

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