Benj Gallander GSE Systems Inc GVP-A COMMENT Sep 26, 2017

This is into training in the nuclear industry, as well as training in the oil/gas industry. Have no debt and has cash in the bank. Did contracts with Hyperspring for 4 years and then they acquired them. Because of this, their revenues have gone up 98%. They have also gone up organically. Thinks nuclear is going to come back into favour again. Losing a little bit of money, but have a new CEO who has said he has found $5 million in savings. He can see this tripling from here.

(A Top Pick Feb 3/15. Up 25.05%.) Software for manufacturing companies. Also, big in the nuclear industry where they do a lot of training. Revenues went up 91% last year, and a lot of that was because of a takeover company. This has been rotating between Black ink into Red ink, and he thinks it can be Black ink going forward. A company with no debt and insiders own over 40%.

(A Top Pick May 7/15. Up 73.68%.) Nuclear simulators. They just got an engineering contract that increased their backlog by 60%. They have zero debt. New CEO has found $5 million in costs that they can get out. Insiders own a fair percentage of the company. Thinks it can double from here, but he has it as a Hold. His target price is $5.24.

(A Top Pick Dec 1/15. Up 72.11%.) This does training for nuclear simulation, chemical companies, oil/gas companies. Has a clean balance sheet with no debt. Their backlog, year-end to year-end, went up 75%, a huge increase. Assuming they price things well going forward, it should do very, very well. He can see this doubling from here.

(Top Pick Jan 20/16, Up 68%) No debt with insiders owning about 26%. They train workers in the nuclear, oil and gas industries. He sees more expenses coming out. He thinks they price their backlog pretty well. He sees the valuation going up another 100% from here.

(Top Pick Jan 20/16, Up 58%) It has had a great run. Nuclear and chemical facilities training. It is a beautiful little company with zero debt and lots of money in the bank. 42% inside ownership. They are a leader in the field.

This is his pick in the uranium sector. They do staffing, including staff training, in the uranium and oil/gas sector. They have a clean balance sheet and management who really know what their doing. They are doing small add-on takeovers that have been going very well.

We would be exceptionally cautious and would not recommend a company at only $8M market cap. It has a decent revenue base, but has only been profitable twice in the past decade. It has a bit of debt and very low cash flow, and is going to need more capital. This $3 stock was $38 six years ago. The one analyst one it expects a loss of $1.30 per share next year. Micro caps can be volatile, but with its size, losses and outlook, we would not want to own this.
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