Tuesday, November 20, 2018

Is Daqo A Two Trick Pony?


Summary

After reaching our target price in less than four months, Daqo Energy stock dropped to our initial entry point during the last semester.
On the positive side, DQ has delivered on its capacity expansion guidance and production cost while aiming to double production to 70,000 MT by 2020.
On the negative side, in May new Chinese regulation limiting subsidies came out triggering the drop of polysilicon prices below international prices.
Taking into account the actual global cost curve of polysilicon, the planned 150,000 MT-industry capacity expansions and the future global demand, I do not believe current polysilicon prices to be.
I recommend buying DQ for a target price of $59.00 USD/share, offering a 1.4x upside from current levels.

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Tuesday, September 25, 2018

Overstock Wrongly Trading As A Cryptocurrency


Summary

A new reference point values tZero at $32 per share, a 15% premium over OSTK shares. In addition, you would receive the retail business and Medici for free.
The market has been pricing OSTK shares according to bitcoin prices.
Medici and tZero are using the same technology as bitcoin. But neither Medici nor tZero is bitcoin.
I recommend buying OSTK shares offering a 180% upside to my fair price of $76.
My worst scenario offers a 20% margin of safety to the current price. If tZero experiences mass adoption, OSTK is a multibagger.


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Monday, July 30, 2018

Why I Believe Highpower International Revenues Should Surprise In The Coming Year


Electric vehicles and smartphones should keep the demand for lithium batteries high for the next 15 years.
Lithium and cobalt prices are not the critical factors that should move the stock price.
There is a leading indicator suggesting significant revenue growth.
We recommend buying the stock with a target price of $12.25, an upside of 322%.

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Wednesday, June 27, 2018

Becoming A Venture Capitalist Through Overstock


Summary

Blockchain is an interesting technology that may end up disrupting many industries.
Overstock owns Medici, a venture capital fund focused on blockchain technology.
Most of the value is linked to the success of tZero, however, there is value in the other 12 startups.
Using a probabilistic approach, Medici is worth $48/sh. implying a value of $82/sh. for Overstock shares.

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Wednesday, June 6, 2018

Sypris Keeps Delivering

Summary

Industry-wide shortage of Multi-Layer Ceramic Capacitors (MLCC) stagnated the revenues of the Electronics segment.
Margin improvement. Management continue to deliver on their promises.
Save for the MLCC shortage, positive momentum is supportive of all three industries.
Under conservative assumptions, the intrinsic value of Sypris Solutions Inc. shares is $2.50 (55% upside).
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Wednesday, May 30, 2018

5 Contenders For Overstock.com's E-Commerce Business


Overstock lacks the funds, moat and size to compete in the e-commerce space against giants such as Amazon.
I see five potential acquirers of the e-commerce unit. Kohl´s could be an acquirer of this business at $34/sh. But Amazon is a wildcard.
At current prices, investors are obtaining Medici Ventures for free. Medici owns stakes in 13 very interesting and promising blockchain startups.
In the next article, we will attempt to value Medici Ventures.
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Wednesday, May 23, 2018

Amira, Please Don't Ghost Us - Let's Talk


Good operational results with double-digit revenue growth of 12% and flat gross margin of 12%.
Working capital still consuming all the cash, I believe current financing strategy is not sustainable.
Share exchange for the remaining stake in Amira India seems beneficial for ANFI shareholders.
Mixed messages through CEO actions, on one side he guarantees the 239MM USD debt, on the other he eliminates the compensation committee.
The lack of communication with the market makes ANFI an even riskier and more volatile investment but with a very attractive risk/reward profile (1:4-5) with a target price of $11.00/share.


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Is Daqo A Two Trick Pony?

Summary After reaching our target price in less than four months, Daqo Energy stock dropped to our initial entry point during the las...