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Post by JHam on May 10, 2020 6:42:06 GMT
I just opened a position here on Friday at $1.44. The thesis is simple. They are a software company with only one real competitor, and after years of treading water just posted 24% revenue growth in Q1. They work with some huge companies like Raytheon, Lockheed Martin, and even the DoD. Their core business is manufacturing components like baseplates out of their patented metal/ceramic solution that are used in motor controllers for high powered electric applications such as electric trains, subway cars, wind turbines, and hybrid and electric vehicles; baseplates and housings for use in radar, satellite, and avionics applications, as well as in modules built with wide band gap semiconductors; and lids and heatspreaders used with integrated circuits for use in Internet switches and routers. Current price: $1.40 o/s: 13.21M o/s (7.35M float) Market cap: $18M $6.5M in revenues is a 24% increase from Q1 last year which gives them an operating profit over the last 6 months of about $1M. The CEO said they do not expect COVID-19 to affect their business much of at all. They are retaining their biggest customers, 2 of which are for 2 years, and all 3 have higher prices with higher volumes. They won't be completely phased in until the end of Q2 which means we won't see the real good numbers until Q3. Their biggest business is in Asia and EU, with lots of contracts for Chinese high speed rail and trains. Just like with CPAH (ironically one letter difference in the ticker), I think the market is totally asleep on this one. $1.40 for a company that just reported a 24% increase in growth, let alone profitability for the first time in the company's history? Another silly undervalued stock imo. It jumoped well above $2 the other day on the ER, and is where it should be trading at the very least, imo. No one is willing to buy and hold right now given the market volatility, but I intend to accumulate if it dips lower. GLTA! ER call transcript: finance.yahoo.com/news/edited-transcript-cpsh-earnings-conference-070137843.htmlNoble presentation 01/19: noble.mediasite.com/Mediasite/Play/81e2e7098d064ac4ab23f2add9bbb8e21d
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Post by JHam on May 14, 2020 15:31:17 GMT
Averaged down here at $1.41. Not expecting anything until 3Q, but will continue to accumulate when I can at these levels.
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Post by JHam on Jun 30, 2020 23:48:37 GMT
I sold this one a while back for a small profit, but this one took off today. Seems like these low float micro cap software companies are all starting to jump heading into earnings.
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Post by JHam on Jul 2, 2020 3:05:16 GMT
It dumped 25% today, but still up from the $1.30s/40s when I originally bought in. This could be a big quarter for this one and yesterdays action showed once again how quickly these low floaters can move. Looking to get back in soon.
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Post by JHam on Jul 10, 2020 17:36:48 GMT
Congrats to anyone who bought this one. I was hoping to get back in in the next few weeks, but it looks like it has left the low $2s for good.
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Post by JHam on Jul 13, 2020 12:37:18 GMT
Just reentered here premarket with a small position. Not the price is as looking for, but low $3s will have to do. I’ll average down if it goes lower. Still lots of room to grow here.
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Post by JHam on Jul 13, 2020 14:19:40 GMT
Just averaged down. May do so again. Almost have my average under $3, which would be a moral victory for now Totally unknown company which should knock it out of the ballpark in the next few quarters.
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Post by JHam on Jul 15, 2020 6:16:40 GMT
A few reasons why I am super bullish with this company right now and heading into the end of the year. I'm writing this more or less compartmentalize my thoughts/thesis here: 1) The 3 contracts with their 3 largest customers were to be fully phased-in by the end of Q2. Revenues should show to have increased throughout Q2 as these were phased-in, with Q3 ER showing the full numbers. 2) Until now they have given early payment discounts to these large customers which has eaten into their bottom line and impacted their income from operations. They have now been able to up their credit line (to $3M) which has allowed them to eliminate that discount. 3) Like most other companies, they will see some negative impact from COVID. However, since they have government contracts, they are considered essential workers and continue to work at full capacity through the pandemic. They said on their last call, in early May, that the impact should really only be felt with some of their smaller customers. 70% of their customers, including the big 3, are based in EU and Asia, which is faring much better than the US. The CEO said the biggest impact was on the supply chain. That they were having to pay double and triple for freight costs, and that this would continue until commercial airlines resume flights. While commercial passenger flights to EU and are still not close to normal, freight/cargo flights from the UA now only have mild constraints: www.agility.com/insights/COVID19/air-freight/ So I am hoping we hear that these inflated costs have dropped since May. 4) They have been working to add armor into their pipeline. They have said that they think this market has huge potential for them, but to this point they've had some disappointments i.e, the Marines were contracted to use their parts for an amphibious vehicle, but ultimately decided to cancel the vehicle altogether (nothing to do with CPSH). In short, the costs going into the armor program without having anything to show for it yet, has impacted their profit margins. The CFO (I think it was) said in a presentation that they should ultimately be seeing 40% margins even with this program not producing any wins, and that that number should increase as the program gets rolling. 5) They reported $6.5M in revenues and an operating profit of $622K in Q1. Using a conservative multiple of 3, that would give it a pps of $6, on trailing revenue. It is currently trading at $2.50. $6.5M is a 24% increase from YOY, and 23% increase from 4Q19. We'll see what kind of impact COVID has on this quarters' numbers. The real fireworks may not happen until Q3, but the past few weeks have shown just how fast this thing can take off, much like CPAH. So I am starting to accumulate a core position now. 6) No one knows about this stock. They aren't even covered by anyone that I know of. The Q&A portion of CCs only has retail investors who call in. I think that will start to change once the numbers from the next few quarters are reported. 7) CPSH's AlSiC hermetic package is being used in the new Mars rover, "Perseverance", that is being launched in a few weeks. They probably won't PR it, but the CEO said they are seeing many opportunities starting to open up in aerospace, and in particular, satellites.
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Post by JHam on Jul 24, 2020 17:11:05 GMT
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Post by JHam on Jul 26, 2020 5:36:25 GMT
If anyone is unsure exactly what it is CPSH makes, here is a good video demonstration. CPS AlSiC-9 is at a ratio of 37% aluminum metal ("Al") to 63% silicon carbide ceramic ("SiC"). AlSic derived products are used in microprocessor lids, chips, household appliances, to components in high speed rail, hybrid electric and electric vehicles, aerospace and defense, as well as oil and gas:
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Post by JHam on Jul 26, 2020 5:37:50 GMT
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Post by magnus123 on Jul 26, 2020 9:25:45 GMT
Since Q3 2019, the revenue growth was more than $1 million per quarter. My expectation for revenue is therefore minimum $7.56 million. Ideal would be a revenue above that. I hope for a EPS of 0.07-0.08, based on the growth since Q3 2019.
These are high expectations, but not unlikely based on the past growth.
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Post by JHam on Jul 26, 2020 10:15:11 GMT
Since Q3 2019, the revenue growth was more than $1 million per quarter. My expectation for revenue is therefore minimum $7.56 million. Ideal would be a revenue above that. I hope for a EPS of 0.07-0.08, based on the growth since Q3 2019. These are high expectations, but not unlikely based on the past growth. Good info. If it weren't for COVID I think we could almost guarantee rev above $7.56M. I think it would be much higher actually.
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Post by magnus123 on Jul 26, 2020 10:32:42 GMT
Since Q3 2019, the revenue growth was more than $1 million per quarter. My expectation for revenue is therefore minimum $7.56 million. Ideal would be a revenue above that. I hope for a EPS of 0.07-0.08, based on the growth since Q3 2019. These are high expectations, but not unlikely based on the past growth. Good info. If it weren't for COVID I think we could almost guarantee rev above $7.56M. I think it would be much higher actually. Possible. If we take the ~20% revenue growth in Q1, CPSH could hit ~$7.81 million in revenue. I believe that something between this number and the number i wrote before would be extremely good. "As new prices and higher volumes from these contracts continue to be phased in, we see the positive impact they are having on our results. This phase-in period began in the fourth quarter last year should be completed during the second quarter this year."
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Post by JHam on Jul 29, 2020 20:09:02 GMT
Sh*t.
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Post by magnus123 on Jul 29, 2020 20:11:48 GMT
Total fail. Whats your plan now? Sell AH or wait for the CC and tomorrow.
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Post by JHam on Jul 29, 2020 20:18:32 GMT
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Post by JHam on Jul 29, 2020 20:19:41 GMT
Total fail. Whats your plan now? Sell AH or wait for the CC and tomorrow. The crazy thing is, it’s still undervalued even with the these earnings. But given the current climate, the market doesn’t care about that.
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Post by JHam on Jul 29, 2020 20:21:41 GMT
I also think there’s a chance it could rebound tomorrow, but for me personally it’s not worth the risk that it could go back under $2 and stay there for a while.
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Post by magnus123 on Jul 29, 2020 20:22:00 GMT
I don't need to sell, so i just keep it in my portfolio for the moment. My average is around ~$2.50. i hope that i can get out in this area.
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