Micro Caps for 2012
Micro Cap Club is an exclusive club for experienced micro cap investors to discuss and share ideas. Most investors shy away from this speculative space as they view it as un-investable. The result of this is the Micro Cap arena is one of the last bastions of market inefficiency. Finding the needles in the haystack that have viable business models, management teams, and share structures can yield far greater returns then most other investment vehicles. Here is a partial list of companies our members are following in 2012.
TechPrecision Corp. (TPCS) $0.90: The company makes large metal fabricated components for several industries including Alternative Energy, Nuclear, Med-Tech, Aerospace & Defense, and Industrial. TechPrecision is expected to grow revenues 50% next year to $60 million and earn 20c+ fully diluted after tax. It’s hard to find comps because there just aren’t many companies left that can do what TPCS does. The company’s goal is to be on a $100 million revenue run rate in a few years. Analysts estimate the company is worth 2x sales in a buy out and have an average 12 month target price of $4.25. The company recently gave a very detailed business update and outlook for next year.
rVue Holdings (RVUE) $0.22: Digital Out of Home (ie: DOOH or Digital Screens) advertising is the third fastest growing advertising medium in the US. RVUE is doing to this advertising vertical what Google did to Internet advertising. RVUE aggregated this disjointed industry by forming alliances with 175+ DOOH network operators while also developing a buying system w/analytics to make it easy for advertisers to directly target consumers. RVUE collects a percentage of ad dollars flowing through their network. The switch was turned on 60 days ago, and the company announced they have over $28 million in advertising proposals out for Q1 2012 as of mid-November. The DPAA states that 10% of proposals become campaigns, so it’s easy to model out. What RVUE is doing is a game changer for their industry. What used to take 6 weeks to deploy a DOOH campaign now takes 5 minutes.
Dejour Energy Inc. (DEJ) $0.52: Dejour Energy Inc. is an independent oil and natural gas exploration and production company operating projects in North America’s Piceance Basin (107,000 net acres) and Peace River Arch regions (15,000 net acres). Dejour has a NAV value of over $1.25 based on a fraction of their assets and is just starting to be picked up by savvy investors. Shareholders are waiting for the imminent release of news in respect to a test drill in the South Rangely prospect, the IP production results of the third well drilled at the Woodrush Field and the announcement of financing to further development of their Kokapelli Field (Gibson Gulch) project.
Spine Pain Management Inc. (SPIN) $1.15: Spine Pain Management is a fast growing, profitable, medical finance company. The company offers solutions to spine surgeons, orthopedic surgeons, and other healthcare providers for the treatment of musculo-skeletal spine injuries resulting from automobile and work-related accidents. During 2011, the company has added four additional center relationships. The company has given FY 2012 guidance of $10-12 million in revenues (100% growth) and $0.30-0.35 EPS (150% growth).
NAPCO Security Technologies Inc. (NSSC) $2.48: NAPCO is one of the world’s leading manufacturers of technologically advanced electronic security equipment including intrusion and fire alarm systems, access control and door locking systems. The Company consists of NAPCO plus three wholly-owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. The company is currently on a $70 million revenue run rate with a goal of hitting $100 million in revenues in three years. NAPCO is rolling out some new product offerings with recurring revenue streams like the one announced this week. At $100 million revenue run rate, NSSC will earn close to $1.00 per share.
Brekford Corp. (BFDI) $0.65: Brekford is a one-stop shop with its unique 360-degree approach to vehicle upfitting services, cutting edge mobile and video technology, and automated traffic enforcement services for homeland security and law enforcement agencies. The company’s red light and automated speed systems are the growth drivers of the business. A recently signed 5 year contract to provide speed limit systems for school zones in Maryland have almost doubled the Brekford’s revenues and pushed them nicely into profitability.
Planet Payment Inc. (PLPM) $2.76: Planet Payment is a leading provider of international payment processing and multi-currency processing services. We provide our services in 16 countries and territories across the Asia Pacific region, North America, the Middle East, Africa and Europe, primarily through our more than 45 acquiring bank and processor customers. In the 9 month period ended Sept 30th, Planet Payment’s revenues increased 40%. The $8 million increase in revenues during this period when compared to the previous period was enough to swing the company from a $(2.8 million) net loss to $600,000 in net income. Now that the inflection point of profitability is here, increases in revenues should be reflected more and more into the bottom line.
NXT Energy Solutions Inc. (NSFDF) $0.75: NXT is a Calgary based company whose proprietary airborne Stress Field Detection (“SFD®“) survey system provides a revolutionary survey method that can be used both onshore and offshore to remotely identify potential hydrocarbon traps and reservoirs. The company has $8.9 million in revenue backlog it will be monetizing over the next few months, and expects to sign up additional clientele by Q2 2012. The company’s goal is to also have a GORR (gross overriding royalty) on anything found using their technology.
World Energy Solutions (XWES) $3.00: World Energy Solutions is an energy management services firm that brings together the passion, processes and technologies to take the complexity out of energy management and turn it into bottom-line impact for the businesses, institutions and governments we serve. To date, the Company has transacted more than $20 billion in energy, demand response and environmental commodities on behalf of its customers, creating more than $1 billion in value for them. The company has a predominately fixed cost structure with significant operating leverage. In Q3 2011, revenues increased 21% to $5.6 million and net income increased over 500% to $855,000 or $0.08 per share.
Document Capture Technologies Inc. (DCMT) $0.30: DCMT is a worldwide leader in the design, development, manufacturing, and sale of USB powered mobile page-fed document capture platforms. DCMT provides more than 30 different products across multiple distinct categories, which are distributed globally through private label solutions to leading Tier 1 OEMs, VARs and other system integrators, including Brother, Burroughs Payment Systems, Digital Check, NCR and Qualcomm. In fact, NCR owns 33% of DCMT and they invested at much higher levels. In the most recent quarter ended, revenues increased 50%, and the company reported operating income of $285k versus a loss from the year ago quarter.
Medgenics Inc. (MDGN) $2.50: Medgenics is developing and commercializing Biopump, a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient’s own skin biopsy for the treatment of a range of chronic diseases including anemia (EPODURE in Phase I/II), hepatitis C (INFRADURE in Phase I/II), and hemophilia (HEMODURE). The company plans to develop and license its technology for other uses as well.
Bacterin International Holdings (BONE) $2.75: Bacterin develops, manufactures and markets biologics products to domestic and international markets. Bacterin’s proprietary methods optimize the growth factors in human allografts to create the ideal stem cell scaffold to promote bone, subchondral repair and dermal growth. Bacterin has been growing 100% per year the last few years, which makes it one of the (if not the) fastest growing biologics-medtech companies on the planet. Many of the behemoths of the industry ie: Baxter, Medtronics, Stryker, etc. have been very active acquiring companies in this space.
Verde Potash (AMHPF) $6.95: Over the next decade Brazil is expected to become an agricultural super power, thus making it one of the largest users of potash on the planet. Verde Potash was founded and is led by Brazilians. The company is developing the Cerrado Verde project in Brazil, a potash-rich rock (bed of slate rock) uniformly covering a 1000 km2 area from which the company plans to produce a unique potash fertilizer product called ThermoPotash. Unlike conventional potash projects, the Cerrado Verde is made up of high-grade outcrops which allow for a low cost strip mining approach. Verde announced a few weeks ago that they have successfully produced KCl using the company’s patented Cambridge Process from their potash rich rock resource. A PEA is expected in Q1 2012, and if it’s shown to be successful, Verde’s resource is large enough to supply all of Brazil’s potash demand. This would be a game changer not only for Verde Potash, but also for the potash industry.
Patient Safety Technologies (PSTX) $1.30: Patient Safety provides the Safety-Sponge® System, a solution proven to improve patient safety and reduce healthcare costs by preventing one of the most common errors in surgery, retained foreign objects. Since the company received FDA clearance in March 2006, over 60 million of the company’s Safety-Sponges have been successfully used in more than 3 million surgical procedures. The Safety-Sponge System is currently being used in approximately 100 institutions-hospitals (including six of the 2011-2012 US News and World Report Best Hospitals Honor Roll) and planned to grow to 230 by the middle of 2012.
The MicroCapClub (mc2) is an exclusive micro cap forum focused on micro cap companies (sub $500m market cap). The MicroCapClub was created and founded by Ian Cassel as a way to share ideas and to learn from other seasoned like-minded micro cap investors. Our goal at MicroCapClub.com is quality membership and quality stock ideas. If you are an experienced micro cap investor, feel free to Apply today.