Espial Group (ESP-T)

They haven't won many contracts lately. They had signed a deal with Rogers to make them look like Apple TV and more user-friendly, but lost that contract, then signed a few new contracts, but those revenues haven't come to fruition. He still holds it thought it's been going down. There's lot of cash on the balance sheet. He's waiting for them to sign more contracts. Frustrating. If things don't work it, the company might be sold. They've done poorly operationally.

This has not done much for the past couple of years. They have a great balance sheet. They have signed a couple of contracts recently and have recently beat analyst earning expectations. He thinks this is a great take-over target and he has a large holding.

It has a ton of cash on the balance sheet. Some think this will be taken out in 2018. They signed a couple of deals and the stock is up today. It is cheap. It will take some time. We need them to ramp up.

(A Top Pick May 12/16. Up 20%.) This has been in the news with a hedge fund trying to replace some people on the board. Feels there needs to be changes. The market cap is about 45% in cash. They have 2 companies that make up the majority of their revenue. He is hoping they can bring on some new customers.

They are trying to defend cable companies from OTT (Over the Top) markets. With their set-top boxes software, they tried to make it look more like Apple TV so it is easier to use. Just reported a very big quarter. The business is doing fairly well and the stock is very cheap. About 50% of the market cap is in cash. He is waiting for deployment of a couple of the contracts that they’ve signed, and hopefully will see it coming in the next few quarters.

(A Top Pick Oct 16/15. Down 40.26%.) Rogers was using their product, but decided they were going to do it themselves. Ended up writing off $500,000, and are now signing up with a US company. This company still has a great product. They are selling it into Europe. Thinks there is good opportunity going out for the next 3 years. A very small, competitive industry.

(Top Pick May 12/16, Up 1.44%) There was controversy with a contract they had with Rogers. They rolled out with a couple of other companies. The upside is quite strong and you will start to see other deals. It is a way to play the defense against cord cutting.

They were trying to help Rogers make set top boxes look like Apple TV. They have since cut cords. They have up to $1.50 of cash per share. He thinks there are activist shareholders looking to do something with this company. We need to see them start to do well operationally before buying.

So far it has been a bit of a disappointment. It is a show-me story. He is hoping for announcements in the near future.

(A Top Pick Sept 23/15. Down 40.35%.) Makes software that goes into set-top boxes for cable. Has a new platform that effectively allows you to do more than just connect with your cable company, but has the YouTube’s and a lot of the other apps that are in some of the smart TVs. A big client was testing in order to put these into the next line of boxes, but then put a stop to the program, which had a big impact on the stock. Valuation wise, he is sure that a lot of value managers are looking at this right now. Has over $1 in cash on the balance sheet, and are just rolling out their product in Europe with a couple of big cable companies. He is out of this, but is watching from the sidelines.

(A Top Pick Sept 28/15. Down 30.13%.) They try to help cable companies keep their clients from cord cutting. They were dealing with Rogers (RCI.B-T) and people suspected the contract was going to be cancelled, so the stock came off. Earnings growth has been kind of pushed out. They’ve signed a couple of contracts, and in the back half of this year will start to see them get deployed. Have about $1.60 a share in cash.

Owns a small position. They basically supply cable and telcos globally with the new interface. Started riding the ITP wave with a lot of the telecoms, and are now trying to help cable companies catch up to the telecoms, in terms of making it easier to navigate more user-friendly for video subscriptions, etc. Very contract driven. There is a long sales cycle before they land a deal to develop software for a large cable or a telco. The business will be a bit lumpy, but they are onto some very good contracts in Europe that are starting to kick in. Hopefully they will make some large announcements this year.

Looking for people to cut the cord. They look like Apple TV. This quarter there will be revenue generation so this is the right time. He owns a big chunk. There is deep value here, but people got impatient.

(A Top Pick Feb 23/15. Down 29.07%.) This company is trying to help cable companies from competing against Netflix and everybody that is going over the top. They have software for the set-top boxes. Actually reported a great quarter that beat all expectations, but in the quarter they announced that they weren’t sure if they were going to go forward with one of their clients, so the stock sold off quite a bit. Have about $1.25 a share in cash. Enterprise Value is probably only about $40 million, where he thinks they are going to do $10 million EBITDA, so it is only trading around 4X 2016 EBITDA. Once you start to see the quarters come through, you should start to see the stock move up again.

(Market Call Minute.) They lost a customer which really concerned him. Have very high customer concentration and until he finds out what is going on with that customer he would consider this as a Hold.