Motorola Exclusive licensing Agreement North America and Entire World.
A huge Motorola Brand Product rollout for 2018~ Motorola VDSL2/ADSL2+AC1600 Gateway, Moto AC2600 Router, Moto Cellular Sensor, 3 New Moto Cable Gateways, Moto Cellular Ethernet Modem, Moto Cellular Router and Moto Mesh Products.
Zoom Telephonics, Inc. designs, produces, markets, and supports communication products under the Motorola and Zoom brands. The Company's worldwide licensing agreement with Motorola includes cable modems and gateways, DSL modems and gateways, cellular modems and routers and sensors, range extenders, home powerline network products, and MoCa adapters.
Zoom telephonics ZMTP~ symbol
Fully reporting with the SEC~
52 week range~ $1.71- $2.89
Fully diluted shares outstanding ~16.3 million
Management controls 28% and institutions control 27%
The public float is around 7 million common shares
Revenue exploded from $18 million ending 2016 to $29.4 million ending Dec 2017. Losses narrowed dramatically from .21 to only .09. Note: most of loss for 2017 was from sales tax owed to Amazon for products sold via website.
Excluding the adjustment for the Amazon-related sales tax liabilities, net loss was only .04.
Please review most current presentation~
Upon review of this document investors will understand why we are so excited about the short as well as long term future for zmtp shares.
A new 13G filing discloses a seller that has weighed on the stock and actually has created a flatline share price for a long period of time. It appears the "trust" that has been selling is almost out of paper !
During the past 2 years the company has seen revenues grow by 60+%/year and the stock has floundered . Upon review of the presentation mentioned above it will be evident that with a whole slew of new products and worldwide reach that revenue for 2018 could easily surpass $40-$45 million and show a very healthy income/fully diluted shares.
Note: This trust that we mentioned had 1.3 million shares and as of Dec 31st 2017 the share count had dropped to a mere 84K. This large overhang is gone and will only add to potential upside for zmtp shares during 2018 and beyond.
As Zoom's reach extends worldwide, the introduction of many new products and stronger worldwide economic growth will only enhance zmtp's ability to create attractive returns for the shareholder.
Zoom's business model is attractive. ZMTP's operation requires minimal fixed assets: product manufacturing is outsourced to third-party manufacturers in Asia and sales are executed via third-party digital retailers (like Amazon) and third-party brick -and-mortar retailers (like Best Buy, Wal-Mart, and target). Zoom is responsible for product design, testing, qualification, and marketing, as well as for the oversight of its distribution network.
Upon review of the 4th Q revenue alone for the Q exploded up 72% compared to the 4th Q of 2016. Gross profit was $3.2 million vs $1.4 million for the same period. Excluding the adjustment for the Amazon-related state sales tax liabilities, net income was $444k or $.03/sh.
We believe that there are so many positive catalysts that ZMTP has ZERO downside risk and upwards of 200% upside during 2018.
We have the "trust" that had artificially beaten down the share price for over 2 years and at this point has reduced the holdings from 1.3 million share to nil. We have had "rocketship" revenue growth during the past 2 years of 65+% and when you review the most recent presentation that is highlighted above we can easily conclude that rapid growth will continue. We have broad worldwide sales for ZOOM productions and now a huge stable of product being introduced late 2017 and 1st and 2nd Q of 2018 that are going to accelerate and elevate revenue growth and net income/sh. Since the tax liability is behind the company and caused an extraordinary loss during 2017 it is obvious that strong income is in the cards. We are now entering 2nd Q of 2018 we believe that ZOOM will easily reach $40 million during 2018 and estimate that the company can earn between .20-.25 for calendar year 2018. The company is growing by 60+% and if we assign a conservative PE of 25 then a share price of $5 to $6.25 should easily be in the cards. At present we a have PSR of 1.1 ( severely undervalued valuation. A value of 3 is considered fairly valued). A PSR of 3 would yield a $7.00 share price.
The company has NO long term debt, a $3 million dollar line of credit that has been untapped and attractive cash flow. It does not appear that they are in need of additional working capital which is very positive for current shareholders because of resulting dilution. It is very possible that this company is getting ready for NASDAQ listing (just seems to be the right time for this emerging growth opportunity).
We rate Zoom Telephonics(zmtp) with out strongest buy rating with a $6-$7 target within 12 months.
Stocks recommended during the past 25 months-April 1, 2018
OPXS------.70-------$1.05 --Strong Buy
OPXXW----.15---- .38 --Strong Buy
Both pay .02/common & warrant April 19th 2018-quarterly dividend.
The recent signing of the 2018 Budget will increase defense spending by $700 billion, the largest increase in 15 years! OPXS revenue during the next few years will skyrocket because of Abrams tanks,Stryker vehicles, LAV's and Bradley Vehicles. Recently the Saudi's signed a $1 billion defense purchase that also includes $300 million in spare parts for military vehicles (includes the vehicles mentioned above and of course others).
One of these days this stock will break to the upside.We still believe that a strong earnings uptrend is forming and rapid growth will follow starting in 2018 thru 2025.
March 27, 2018 OPXS announces another $1.62 million contract for premium optical devices.
The warrants expire Aug 2021, the exercise price is $1.50 and they are non-callable. Offers investors amazing leverage.
ESMC---- .10--------.30 ------BUY
STRI-----.26------.30. ---Strong Buy
The company may benefit from tariffs on solar panels manufactured in China. China basically destroyed the US solar panel market. Maybe a strong tariff on Chinese products within this industrial segment will boost sales for companies like stri .
Merged and changed name to Dropcar- DCAR completed a 1 for 5 reverse split stock is currently $2.10
MKRYF-----.10-------..03 -----declares BK
Management destroyed this junior oil and gas company and basically lied to the investor. There is little we can do when we are lied to.
BSGM-----$1.33--$1.63 ------- BUY
HEMA-----.35---$5.80 --STRONG BUY
Could very well be the best earnings report we have seen in our micro cap world. Sales zoomed to $20 million from $14 and earnings from operations exploded to $3.4 million from $799K. The company also had an income tax benefit of $1 million. Net income for 2017 equaled some .42/sh! The balance sheet has $9.2 million in cash vs $2.3 million and zero debt. The company is also moving into a larger facility in a few months.
HEMA has also formed a new partnership with Charles River Laboratories International, Inc(CLR~$106)! This company has a $5 billion dollar market cap. We anticipate explosive growth to continue and even accelerate during 2018 and beyond. The first 1/2 might have some extra ordinary expenses due to the move, but overall we believe that HEMA can achieve revenue of $30-$35 million during 2018 and $50 million by 2020! As revenue spikes we can conclude that earnings will follow and earnings of .50 for 2018 is not out of the question. We have raised our target near term to $10 by the end of 2018. Of course the company could always be bought out. We rate HEMA with a strong buy recommendation. You never step in front of a speeding train!
Management is currently suing for $7.5 million that was stolen from them - relating to 2 Mexican contracts. We believe that they will recover the theft
VII-----.41------.41 -Strong BUY
The only thing holding this stock back is the recent offering. So we must work thru the overhang! The company recently announced a major contract in Mexico and the stock ran, but the overhang smacked it! Dead in the water for now, but a life preserver is not needed~only patience! We continue to buy the dips into the low and mid .30's.
Just announced that CETX bought 46% of VII from a private party. Most likely from fund that held this position. Smart move by CETX ( recommended @ $2.62 within last newsletter.) According to noted think tank~ video surveillance market was valued at $30 billion in 2016 and is projected to reach $76 billion by 2022, at a CAGR of 15.4% between 2017 and 2022. Extremely positive purchase by CETX because they are not going to sell! Again~ rated with a strong Buy
LPAD-----.80----$1.03 bought out
Go to their website http://www.arrowheadpharma.com Don't forget the big picture! TRiM tm Platform enables Amgen Partnership. Amgen strikes $674 million cardiovascular RNAi pact with ARWR. Some planned FDA apps. ARO-AAT FIH planned Q1 2018, ARO-HBV (HepatitisB) FIH planned Q1 2018, ARO- APOC3, ARO-ANG3 and ARO-Lung1 all 3 planned CTA Q4 2018. ARO-LPA and ARO- AMG1 these 2 partnered with Amgen dealing with Cardiovascular Disease. Please go visit the website and review the 2 presentations ~ Feb 27 and March 1 2018. ARWR could be a $100 stock. Their science and application make sense and AMGN would not be a partner with them if they did not see something unique. Regardless of the recent move we believe there remains exponential upside for the patient investor. Of course they could get bought out by AMGN or another cash rich Biotech.
March 27, 2018 ARWR announces the dosing of subjects in phase 1/2 clinical study of ARO-HBV , a potentially curative therapy for patients with chronic Hepatitis B virus infection.
Jefferies places a Buy recommendation with a $10.00 target. (They sure are going out on a limb!)
March 28, 2018~ ARWR ARO-AAT, a subcutaneous RNAi-based therapeutic for alpha-1 antitrypsin- related liver disease, demostrates liver exposure- response and efficacy in preclinical studies--PS-147 This abstract PS-147 in under embargo until Saturday April 14th 2018. This abstract has been selected to be highlighted during official EASL Press Office activities that will be made public on the day of their presentation at the congress. This piece of information is beyond bullish for the company..
BK filing~common share holders will get wiped out.
VUZI-- $6.35---$5.55--Strong Buy
Recent "bear raid" by coordinated "short sellers" Truly amazing that the worthless SEC has not re-instated the "uptick" rule. Marc Cuban behind much of this raid. Remember Marc ? HE stated that he was shorting the market if Trump got elected! He stated that the market would go down 5000 points Instead we are up 4000 even with the recent correction. VUZI recently raised $30 million dollars in 2 days. Toshiba has bought product from them. There are many Fortune 100 and 500 companies testing their products.
Bottom-line: Don't know why America wants failure! If we wanted failure we would not have had desktops, laptops, micros, tablets and smartphones. VUZI is the logical direction of computing.
VUZI named "Best AR @CES 2018 by TechRadar. At the show Vuzix showcases Alexa-enabled Vuzix Blade Smart Sunglasses @ CES.
Super year-end results~ Achieved highest revenue in 10 years. Revenue of $30 million for year and net income/sh of .05. The fourth Q reached rev of $8 million and net income/sh of .08. Surge was awarded "Supplier of the Year" by Honeywell Corp~ the company's largest customer. The company continues to develop new products driving increased sales. SPRS is expanding a global position in Asia with a growing portfolio of new business. The company is also building a global sales forces.
If the 4th Q is any indication of the near term trend then SPRS could easily earn .30+ during 2018 and the stock price is not going to sit @ $1.00 . This situation like many others have been overlooked and eventually the herd will tire of "FANG" and start to look for cheap and undervalued domestic as well as international growth.
Rhodium-the metal $1480/oz-----$2020/oz ---Strong Buy
Even though since our initial recommendation @ $1480/oz we believe additional upside is going to happen and that $3000.00/oz is not a pipe dream. The demand is outstripping the finite supply of this super rare metal.
CETX------$2.62 -----$2.86--strong buy
Recently announced that it is launching a new Early Access Partnership program for its recently announced augmented and virtual reality Workbench XR manufacturing software.
Workbench XR is intended to help assembly workers in manufacturing environments utilize both VR and AR headsets as well as connected "smart tools" to assemble products faster, reduce errors, and improve the quality assurance process.
This stock was very cheap when we initially recommended a few months ago as our "stock pick for 2018" ~ this development just adds the cherry on top in 3D. We continue to rate CETX with a strong buy rating near term and long term.
Movie Pass MP- The shorts don't believe that this company has a chance in Hell to survive! Again, with out the "uptick" rule the "shorts" continue to destroy American business.
SNDE & SDCJF (same company) The same old story~ Oil company that needs to replenish the coffers to start a growth phase. Of course the shareholders of old are smothered. Recently we have seen a dramatic increase in WTI because Trump may leave the Nuke deal with the Iranians. Trump may also put sanctions on Iran for cyber attacks on strategic computer system nationwide. If we pull out of the Nuke accord ( should have never been signed by the tail that wagged the head) then a 600k barrel/day sanction goes into affect. The Saudi's may also continue to hold back oil from the marketplace to keep prices firm. Also this past week there was a 2.6 million barrel drop in Oil inventories. All of this adds to firming. John Bolton a super Hawk will be Trump's National Security Adviser. The dove always promise big things, but never gets any thing done. The can just gets kicked down the road to hell!
Sundance entered into agreement to acquire 22k net acres and 1800 boepd in the EF for $221.5 million. Company is raising $260 million. The capital raise and refi will fund the acquisition and provide $136 million of liquidity to develop the assets. Pro forma Sundance will be a leader in the EF with 57k acres and production of 10,300. The company estimates that production during 2019 will reach between 20-22k boepd. We have not added up to the shares outstanding after offering but it will be jaw dropping! We anticipate a reverse split sooner than later because you cannot have zillions and zillions of shares floating around for a company that projects 20k boepd during 2019. We remain committed to the company even though we have already bled to death!
Our market view: Many Fund's year -end is Sept 30th not Dec 31st. Many Funds want a pay day and towards the end of the first Q is an ideal time to sell huge winners and of course "dogs" that managers do not want anyone to see that they would actually own.
The "shorts" love a market that looks to be in trouble so they can destroy companies for one reason or another and want to see that specific company fail. We also have the weak holders and day flippers that add to the mayhem. The buyers see these huge down days so they just "pull" their bids and buy tiny bits from the nervous herd.
If this was not enough we have "tariffs" that Wall Street is not sure of. We also have the changes within the WH staff and of course the Russian fairy tale that is getting very tiring.
We believe that this corrective mode is very healthy for the market and once earnings start to star on the headlines that this market will settle down. The lower tax rates are sure to show great numbers during this first Q and beyond. We see little inflation and still historically low interest rates. We also have a new FED President ( Powell)~ this also leads to market nervousness . Sure the "fang" stocks ran hard during the past 12 months and these are some of the most damaged investments.
We just don't see an end to this Trump rally. America seems to be on a fresh and exciting path that we have not seen in decades!
We have a weak dollar which is bullish for American goods. We have some $5 trillion of non-taxed corporate earning that is going to come home soon. This money will be very beneficial for Corporate America because it will be put to work. The severe regulations that had been placed upon Corporate America have been slashed. Oil is cheap and NG is a bargain. The USA is entering a new era of prosperity.
This Nuclear deal with Iran is Terminal, which will be bullish for oil stocks ( sanctions may take as much as 600k barrels/day off the market). For decades we have kicked the nuclear can down the road and it has only brought us more trouble. This Nuclear deal was just an appeasement. We had become like the EU under the prior Administration. This so -called Nuclear can has surfaced in North Korea that also has been kicked around since the Clinton years and it is now or never to confront and disarm it before it is too late.
One more thing!
Chicago Bridge & Iron Company (CBI~$14.40) The company near term will be merging into MDR ($6.09). In this case the "tail" (mdr) will be wagging the "head" (CBI). Both companies are not getting the most "fav" reviews by the herd! Both have been howling "dogs" & when the merger was announced "all hell broke loose"!
After the dust settled the stock ran from $14 to $21.54 by Jan 23, 2018. Since that time CBI had been steady because it actually is a great infrastructure play as a combined company. Both have and had debt issues and project overruns and management boondoggles.
During the past month we have experienced greater volatility in the Wall Street Casino and CBI has been crushed! As we entered the end of March CBI has trended back down to around its 6 month low of $14.00 and we believe as early as next week this stock will react in a positive manner and head higher as oversold MDR recovers. As mentioned the tail wags the head.
The funds dumped it because they did not want it on their books. The "shorts" love this kind of situation so they pile on and weak holders and flippers all get in the act. The real buyers wait for the bargain basement price and then pounce!
We like the upside potential for the short term in consideration of the severe price crush as of late!
WE MAY BUY, SELL AND OR HOLD AT OUR OWN DISCRETION .We currently own shares in all stocks mentioned..
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