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Posts from the ‘Supercom (SPCB)’ Category

Week 159: Blog Days of Summer

Portfolio Performance

week-159-yoyperformance

week-159-Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

I haven’t done a lot of writing since my last portfolio update four weeks ago. I have made only a couple changes to my portfolio, and added only one new position, Midway Gold, which I wrote about last week.

I remain reluctant to add positions.  As I stated previously (here and here) I remain wary of the market reaction to the post-QE era.  So far nobody seems to care, tapering has had no negative impact on stock prices, and we continue to march to higher highs.  Nevertheless I’m not convinced.  I don’t have a lot of insights into the specific mechanism by which quantitative easing leads to higher stock prices or how the end of it will cause them to go lower  but I know from experience that you can’t overstate the importance of liquidity, particularly where small and micro caps are concerned.  Now we’re in the process of draining a bunch of it and I just don’t think that is a great time to be too far out on the ledge.  Why take the chance when you don’t have to?

I’m also not having an easy time finding stocks that I want to buy.  I’ve spent the last four weeks rather diligently investigating new ideas.  I’ve probably gone through 100 names.  Nothing I have looked at has stood out as something I have to own.

In fact, I’ve come back to old names.  In particular, I’m currently betting the farm on Pacific Ethanol. Below is a list of my top ten positions.  Pacific Ethanol was a 20% position that has grown to 24% because of price appreciation.

07-21-14 topholdings Read more

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Week 155: Still Cautious

 Portfolio Performance

week-155-yoyperformance

week-155-Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

In my last update I stated that I had about a 20% cash position and wanted to increase that position heading into the summer.  We are now one month further along and my cash position stands at something less than 5%.

Nevertheless I do remain somewhat uneasy about what happens to the market post QE.   As I wrote about in my last update:

Twice the quantitative easing policies of the Federal Reserve have ended and twice the market has gone into a tailspin.

I came across what I thought was a very good interview of Richard Duncan on the website Valuewalk.  I read his first book, The Dollar Crisis, a number of years ago and I still pull the book out every year or so to go through the concepts another time.  I have followed Duncan ever since.  The video rather long, but in my opinion Duncan describes what current drives the market right now and summarizes why I am uneasy.

 

I view a number of the stocks I own right now as shorter term trades with (hopefully) immediate catalysts.  I have been reducing positions that I would consider likely to have a lower bottom in an event of a correction.  And I have been buying gold stocks.  So even though I have added a few positions and reduced my overall cash position, I feel like I am continuing to reduce risk.   I tweeted the following about my purchases of gold shares: Read more

New Positions in Supercom and PNI Digital Media

I took starter positions in a couple stocks in the last month.  The descriptions I wrote below took up a bit more space than I expected so I’ve relegated them to their own posts rather than include them in the monthly update.  In both of cases the stocks are micro-caps and not without their flaws, so I expect to be following my usual wait and see approach; take a small position, watch the story play out, and add to that position if it does.

Supercom (SPCB)

The idea for Supercom came by way of this SeekingAlpha article, which does a pretty good job of describing the idea.  I say pretty good because I think the article exaggerates the thesis somewhat.  And given the market’s own tendency to exaggerate when it comes to SeekingAlpha thesis with small cap stocks, that might be a reason not to chase this one.  I bought the stock at $4.68  and only 3 days later I’m up over 10%.

Supercom produces RFID’s for and electronic ID’s for public safety, healthcare and homecare, animal and livestock management.  They also produce electronic ID’s, used by countries to manage citizen identities.  The company recently acquired a close competitor, the Smart ID division of On Track Innovations.  The stock shot up in the summer after news of the transaction because of the expectation of synergies which should result in improved financials.  Below is a table that I stole from another SeekingAlpha report. It demonstrates the degree to which the combined company will benefit. Read more

Week 131: Flat on my Back

Portfolio Performance

yoyperformance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

week-131-Performance

Recent Developments

Its been a very quiet month and you can count the number of trades that I made on both hands.  I was away for some time, there were holidays, and I was laid up with back problems for over a week.

Being laid up and not able to do much of anything reminded me of the importance of giving myself time to think.  There are so many ideas to chase down, so many angles to look at, its easy to spend all one’s time doing and no time thinking about what else you might be doing.

It was that thinking that brought me to the idea about Pacific Ethanol, which I wrote about here.  Pacific Ethanol was a story that I had been reading posts on the Investorshub message boards for a while, but because I hadn’t really stopped to think about the idea, it remained just a stock that I didn’t understand that kept going up. Read more