BSM Technologies (GPS-T)

Uses their GPS system to figure out where trains are, and to more accurately schedule trains and service vehicles for people working on the rails. Reported on Aug 14 and earnings were down 10%. That was against a 32% increase in sales. In the coming quarter, earnings are expected to be down 75% year-over-year. Great technology. He is still waiting for the traction that is expected.

He likes this company and has recently started covering it. They have a hedge fund that is backing and supporting them. Essentially, the company does GPS technologies in fleets, etc. They’ve cited a number of large companies that could be coming on board down the road. Growing at a pretty good clip. If you are patient with this, it will do well for you.

Telemetric business. They have an activist shareholder involved. They have been meeting expectations and working on converting some clients that fell off because of the loss of a certain cellular signal. He thinks at some point they will be taken out.

(Top Pick Feb 28/17, Up 7%) There is some execution risk still, but he thinks they will eventually get there. The real big driver for this is data capture. There is a huge secular demand growth in North America. The penetration rate is going to double over the next couple of years. They have enough scale now. It could get taken out over the next 2 years.

GPS hardware to assets on wheels, such as trains. It allows companies to track movements to generate efficiencies. They’ve gone through 2 acquisitions, and have pretty much doubled their customer base. He likes the growth. There is a bit of overhang potential where they have about 10,000 customers that are on the 2G network right now, which are expiring. There is a risk they don’t renew those customers, but the company has well telegraphed that. Longer-term, he likes the company. A lot of growth potential behind it. There is an insider investor behind it that is astute at selling companies like this, so they may be getting set up for some bigger special opportunity type of trades. This is worth owning.

A Canadian software/hardware company which operates in the telematics space. Very much a secular growth story. They provide hardware which goes into trucks, such as UPS, and tracks how efficient a truck is being on fuel, following its routes correctly, as well as safety things like seatbelts being buckled, etc. Sends the data back to the head office to assess. There is a lot of competition, but they operate in several niches that insulates them from the general competition. (Analysts’ price target is $2.00)

(Market Call Minute.) Not really that keen on this. They are a hardware company masquerading as a SASE and are just selling as a commodity.

Basically they help to figure out where your stuff is. Their specialty is in Canada and moving down into the US, is in the rail industry. A lot of it has been in the supply trucks that run on the rail system. Their challenge has been that they have spent a ton of money in expanding. Analysts are wondering when there will be a return on that money. Earnings forecasts are fairly modest at $.01 for 2016, and are forecasted to grow by $.02. $.02 against an $0.84 stock price gives you a 34 PE multiple, and the company is not free cash flow positive.

They acquired a couple of different companies to offer a broad product offering to rail. Earnings growth is expected to decline and then rebound. They are spending money to expand into the US. You have a fairly fully valued stock.

(A Top Pick Dec 10/13. Down 38.56%.) Sold her holdings. Kept disappointing on earnings.

Software solutions. It is doing fine and is in the state of pause. Continues to win contracts. Currently this has the “quiet times” doldrums type descent. This is probably an opportunity to Buy.

Fleet management tracking. Likes this, and it is on his Watchlist. Has pulled back into very reasonable valuation at 7X EBITDA. Recurring revenue. Made a couple of acquisitions recently, so there has been some pressure on the stock from owners of the acquisitions.

(A Top Pick Dec 10/13. Down 34.17%.) A good company but they had a small miss on the earnings, and this kind of growth company is not in favour any more. There are 2 large shareholders that are exiting the stock, which put a ton of pressure on it. Still believes in the fundamentals.

Have about 65,000 mobile tracking devices to keep track of trucks and other pieces as well as fixed assets. Their specialty is construction, rail, utilities and energy industries. Earnings estimates have gone down about 17%. The stock is down about 40% from its high in January. Earnings reported in May were down significantly, but it looks like estimates are now starting to bottom out. Cash is about 30% of the $90 million market cap. Its Enterprise Value to Earnings forecast for next year is 7.9X which looks pretty attractive relative to its 45% of earnings growth. They are putting a big push into the US for the ability to end up looking at where rail devices are. Acquired a new company in Western Canada which also focuses on where locomotives are.

On his Watch List and he might be buying soon. The oil/gas seismic is part of their business, but they have had more of a growth in the trucking area where they have a solution for fleet management and tracking. This adds a lot of efficiencies.