Thursday, June 5, 2014

New Job, No More Posting

Hey all readers. I'm a bit late with this on thewallstreetfox.com, but I accepted a job offer in the financial reporting industry and because of that I can have no conflicting bias and can no longer post my thoughts on stocks to the public. If you'd like to keep in touch, you can contact me via e-mail listed on the website. Good luck to all!

Wednesday, May 21, 2014

Special Situation: Nokia Has Plenty of Room To Run

Nokia, technically speaking, seems to be priming for an upward move to $9.00+. Take a look at the chart.


Nokia is up 3.6% on high volume after an analyst upgrade from Jefferies.

If shares can break through the short term downward trend on high volume, and then past $8.20 resistance, I believe double digits would not be far off.

Remember, Nokia has been trading range bound in a rectangular box range for about 8 months! A break above (or below) this rectangular box would signal a sharp move either way.


The upcoming dividend payment or shareholders meeting may help boost shares. Either way, Nokia looks good technically, and with a $0.50 dividend on its way this July to shareholders, the risk seems fairly limited. Strong compelling risk/reward profile right here.

Take note that the 200 day average on the daily is at ~$7.03, so set your stop loss at $7.00, and as long as it doesn't drop below that by the time the dividend comes, that $0.50 cent risk factor will be reimbursed by the special dividend. 

Tuesday, May 13, 2014

Just How Much Progress Has Plug Power Made?

The hype and commentary and articles surrounding Plug Power are spewing out at an uncontrollable rate, kind of like when the ents break the dam. Often this commentary surrounding Plug Power is negative, due to the fact that shares rocketed more than 4,000% higher after narrowly avoiding bankruptcy, then avoiding a reverse split, and then announcing a positive EBITDAS 2014 year, a DOE contract for range extender testing with FedEx, and a massive turn key order from Wal-Mart.

The arguments of whether this stock price move has been warranted has already reached the point of nausea months ago, and regardless of the current stock price, the fact is Plug Power is moving quickly to capitalize on its tremendous growth opportunities. The company has more than $150 million in the bank, will be deploying new products (GSEs and TRUs) this year, and today the COO signaled that Wal-Mart will be a future customer of their TRU offering (Wal-Mart operates more than 5,000 of them alone, and the possible logistic savings are through the roof for such an efficient driven company).

Plug Power is still up nearly 1500% in a year, not bad for a company that was staring down the barrel of bankruptcy and on the verge of selling itself in early 2013. 


I have recently been going through some old conference call material of Plug Power, to get an idea of what Plug Power looked like back in the future. While this post highlighted some of the woes of 2012/2013 (Possible sale of company, CFO resigned, product quality issues, disruption in infrastructure services, pricing pressures from Ballard Power).

Here are some other tidbits i've come across thanks to a long time Plug Power investor, such as a 2009 Investor Presentation, and I thought there were some slides worth highlighting too all who are unfamiliar with Plug pre 2013/2014.

From the 2009 Alt. Energy & Natural Resources Conference, with former CFO Gerry Anderson.


Worth noting, IRR exceeding 30% for many customers. Wonder where that stands today. Company did not hit 1,100 unit target in 2010, more around 650.


The North American material handling market has always represented big potential for Plug Power. 


Let's not forget that Plug Power's main target market was fuel cell powered generators, and they also picked up some traction in the telecom space, especially in India.


Plug has always eyed leveraging its strengths and expanding into vertical markets. There are plenty of applications for fuel cells, and the overall industry is finally gaining traction. Note the Hybrid Vehicles.


At last, Plug Power manages to fulfill its promise of entering Europe and Asia.


The value proposition behind Plug's GenSys Telecom power product in India. The company received a $7 million order from Tata in India, representing 200 units and a 5 year service contract.


Addressable market for Plug Power's GenSys product. Keep in mind that the company ended up abandoning this product to solely focus on GenDrives, but with the ReliOn acquisition, telecom is back on the table for Plug Power. 


Now drum roll please, for my by far favorite slide of this presentation. Plug Power's financial targets for 2010-2012.


Talk about a miss. Wow. While many will point out how far off Plug Power is (expected to ship 3k units in 2014, no where near the targeted 8,000 in 2012) and criticize management, I see some positives here. Plug Power is confident that its facility in Latham can handle extreme growth, with shipments doubling year after year. Keep in mind the current capacity of Plug's facility in Latham can handle approximately 10,000 units per year. Another highlight is the company's efficiency improvements. 

Plug Power expected to be an EBITDAS LOSS on $110 million in revenue. Today it's break even at only $70 million in revenue. Talk about cutting costs. Talk about perspective, Plug Power has come a long way.

A Bright future is in store for Plug Power, but that's not saying the road will not be a bumpy one. The company has strong growth prospects, but the bears continue to short and many still feel the run up in shares is overdone. Earnings will do the talking, and i'm alright with that as i'm a long investor in Plug Power.

I'm long Plug Power.

Monday, May 12, 2014

Taking A Look At Plug Power's Past

I am going through some old earnings call transcripts and wanted to post some quotes below I felt worth highlighting. It really helps to put things in perspective.

These quotes are from the 2012 Q4 earnings conference call held in March of 2013.
These (new) customers chose GenDrive after visiting and talking with many of our present customers, visiting deployments and becoming convinced that a GenDrive powering a forklift truck will improve productivity, eliminate the battery room and reduce their greenhouse gases.

And after the most recent expense reduction in the fourth quarter which reduced the annual run rate by approximately USD 3 million, the company will be EBITDA breakeven between $65 million to $75 million in revenue.

We are the premiere system PEM fuel cell integrator without question. Forklift trucks are a more demanding application than even automobiles. In 2 years, we put as many hours on our fuel cells as fuel cells powering automobiles will see in the lifetime of the car. We constantly start and stop and carry and lift up over 6,000 pounds of weight and operate close to 99% of the time. 
Our products are fueled over 6,500x per day and use 4.5 metric tons of hydrogen per day. 95% of the commercially-used hydrogen fuel in the U.S. is filled into a Plug Power product. No one is remotely matching the performance of Plug Power's products in real-life operations. Our technology and operation knowledge uniquely positions Plug Power for the future.

Phil, until I resolve the capital issues for the company, I'm going to decline at this point. We're, as you could see on the call -- see on our press release, we have been focusing on strategic investments, raising additional capital, partnerships and potentially selling the company, and our focus is to resolve our capital issues. And we believe once those capital issues are resolved, order flow will significantly increase.

Hans Peter Black - Interinvest Corp., Inc.Yes. It's actually Hans Black. Listen, I have a little suggestion, and that is, you got to release before market or after. I think you should try to release your numbers 8 in the morning or something and not 15 minutes before a call while markets are open. But that's just a little thought.
Andrew J. Marsh - Chief Executive Officer, President and DirectorSo Hans, just so you know, we had it loaded at 7:00. NASDAQ had some questions and it delayed the release.
Hans Peter Black - Interinvest Corp., Inc.All right. Fair enough. Well, look, I'm listening and you know my views, I think we've made them very clear, and we're there to help. I'm a very big believer in your technology and the future of this company. And I think we've stated publicly some of the changes we'd like to see. And I wish you luck and good hunting. ( I thought this was funny)
I recently obtained a 2009 Plug Power investor presentation from an acquaintance. I will post any tidbits as well soon. Plug Power has come a long way.

I'M SHOUTING FROM THE HILLTOPS: Go Long In TransEnterix, Neovasc, American Apparel and More

I'm not a licensed financial advisor, nor am I a licensed Registered Investment Advisor (RIA). I hold no fancy three letter combination after my name (as of yet), and my own investing/trading experience (2-3 years) is probably dwarfed by your own. My name is Matthew Fox and I'm simply an avid stock market observer/investor, crazed technical analyst (I LOVE CHARTS!),  and serial entrepreneur (if one of em' will just take off already!).

I will have one fancy three letter combination after my name, MBA, from a not top tier Business School on June 26th, 2014, and I am a Chartered Market Technician (CMT) hopeful and plan to earn that designation in the future, though it's a 1.5 year testing process and requires three years of relevant work experience (of which I have zero financial work related experience! I've been cooking at fine dining establishments for nearly 7 years), so it will be a while until I earn that designation.

I'm laying this all out for you before I explain my investments that literally get me GIDDY and EXCITED for just being apart of, because I want you to take what I have to say with a grain of salt (and then some). You can read much more higher quality/intellectual commentary on stocks/market from a lot more experienced veterans/bloggers in the industry that will probably make/save you a lot more money than The Wall Street Fox.

If you've made it this far, here is why I'M SHOUTING FROM THE HILLTOPS: Go Long (AKA invest, AKA more than a year time frame!) in TransEnterix (TRXC), Neovasc (NVCIF), American Apparel (APP), and more.

TransEnterix (TRXC)

Did you ever wish you could jump in a time machine, go back to the early 2000's and put all of your money into Intuitive Surgical (ISRG)? ISRG went from under $10 to $600+ in a decade.  Well, now you can...sort of! TransEnterix is developing the next generation surgical robot that blows Intuitive Surgical's Da Vinci System out of the water. TransEnterix has superb management, a boatload of cash to fully develop and commercialize its product which is being released in 2015 and the company is targeting a massive market that has yet to be significantly penetrated.

TransEnterix is developing the SurgiBot. It's a surgical robot aimed towards laparscopic surgery. The surgeon enters the patients body through the belly button in ONE incision about the size of a quarter (25mm), and the flexibility of the device, and tactile feedback are what sets this device apart from Intuitive. Furthermore, TransEnterix's offering will cost 60% less than ISRG's Da Vinci System, at ~$500,000. The SurgiBot will also be creating recurring revenue from annual service contracts with customers and supplying the reusable instruments (~$1,200 per procedure). A more in-depth fundamental analysis of TRXC can be found here and here.

Technically speaking, TRXC is extremely oversold, and MACD is turning bullish. There is a MASSIVE gap to be filled from $4 to $8, but a possible sell signal is in the midst of occurring, with the 50 day moving below the 200 day. The company priced its financing at $4.00 per share, and they exercised an over alotment option to sell more shares because of the intense instituional interest in the company. TransEnterix completed a one week road show last month, and has since received 5 buy upgrades from 5 different analysts. This is a strong buy.

Neovasc Inc

Neovasc has already saved lives with their two cardiovascular devices, the Tiara and the Reducer. This company is a hidden gem. They created a mitral valve device (first ever) that treats mitral regurgitation (a deadly disease that more than one million people suffer from), and it works! The recent in human uses have been stellar, with ZERO HICCUPS. The company recently hired a top clinical advisor who will walk the company through its FDA approval. The company seems to be in it for the long haul, at least to the point of getting the products passed FDA standards.

I can't stress this enough, this company has TWO cardiovascular devices THAT SAVE LIVES. Thorough testing of the Reducer has already taken place and the COSIRA trial had more than 100 people enrolled I believe. The Reducer is already CE Marked and approved in Europe. The company also has a profitable artificial tissue production division that is used for cardiovascular devices for companies like Medtronic and Edward LifeSciences. I smell a potential acquisition of Neovasc down the line from either Medtronic or Edward LifeSciences. 

Here is the weekly on Neovasc. What a champ. It should continue to experience some sideways consolidation, but the bullish uptrend is intact. The company trades as NVCIF for American market participants, and it is on the verge of being uplisted to the NASDAQ. The company completed a $25 million offering with a single private investor/institution that in my view, begged for NVCIF to sell them shares, because Neovasc was not in need of any money at the time. The offering took place around the $6.00 mark. Let me repeat, Neovasc is a Canadian company that has two LIFE SAVING products that target millions of patients, and on top of that they have a profitable tissue producing division that is growing at a rapid rate and funding the development of the Reducer and the Tiara. I'm expecting $15+ for Neovasc down the line...unless they get bought out prematurely. The one concern is if Neovasc files for a shelf when they uplist to the NASDAQ. Dilution is limited thanks to their profitable tissue division, but it is not out of the question. Read my in depth fundamental analysis on Neovasc here, here and here

American Apparel (APP)

Currently i'm working on a piece for the website TraderPlanet entitled, "Distressed Investing Is The Best Investing," where I outline why investing in names that have been written off for dead can sometimes turn out to be the best investment you've ever made, and the criteria associated with the successful ones. American Apparel, to me, has the necessary criteria to survive AND thrive. Plug Power had met similar criteria, as did Nokia, Sprint, Clearwire and Castle Brands...just to name a few.

American Apparel has a strong and familiar brand, superior quality and the ability to tout that all of its products are made in the good ol' USA....something increasingly hard (and scarce) to say now a days. The vertical integration of APP makes this one a game changer. The company narrowly avoided bankruptcy. Activist investors stepping in signals a new direction of management and a form of guidance that should bode well for all shareholders involved. The main problems that drove American Apparel into the ground are now behind it (logistical problems with new innovative distribution center, immigration/worker problems, outspoken CEO who makes headlines not in a good way) and the only time you will be hearing of these company woes is when bashers show up and regurgitate old news after an excessive (but most likely warranted) run up in share price.

This chart is a beauty...doesn't get much worse (or better, depending on how you look at it) than this. The stock has plenty of room to run, with RSI in an uptrend and room before overbought territory. MACD is staying bullish and looks like it can run, and the stock is still battling to reclaim its 50 day....good sign. I have not conducted thorough fundamental analysis of APP, but Michael Bigger of www.thisisbigger.com has and I strongly suggest that you read his APP posts. Mr. Bigger owns more than 3 million shares of American Apparel. 

Plug Power (PLUG), Erba Diagnostics (IDI, Castle Brands (ROX), and Tiger Media (IDI)

These are risky ones, especially with the Russell Small Cap taking a beating and technically breaking down hard, but the growth and business prospects of Plug, Erba, Castle and Tiger are stellar, and all three have recently sold off hard, creating attractive entry areas. Most of these companies have a connection to Billionaire Dr. Phillip Frost (if not familiar with who Frost is or his background, I highly recommend you do some googling right now!). Frost is invested in Neovasc (through Opko Health), TransEnterix (heavily invested, along with Dr. Jane Hsiao), Tiger Media (owns ~30%), Castle Brands, and Erba Diagnostics is an old subsidiary of his previous company, IVAX, though he has no position in Erba.

The fundamentals of these four companies are intact. Here is my thorough analysis on them.

Right near oversold, MACD about to turn bullish. Earnings this week. 

MACD priming to move bullish. CEO needs to take communication 101 course but once he does (or if he fails and hires IR person), price should move up.

Look at the MACD! WOW! $1.50 PT from Barrington's research analyst.

MACD moving along with RSI.

All in all, there are some serious hidden gems out there with increasingly bullish fundamentals and a battered stock price. While the overall market may be in a bubble and whether or not that will pop in the imminent future, I will remain long these names. I'm long every single name mentioned in this post.

While this is no advice and in no way fits the needs of your investment strategy, this is just more of me making a mental note and writing about it, highlighting that I said this here at this point in time. Let's see how they all turn out a year or so from now. Remember, go long=don't worry about intraday movements, follow the company and watch the positive developments unfold. If you are squeamish about losses, set an appropriate stop loss and stick to it. 


Friday, May 9, 2014

Central Grocers Re-Commits To Plug Power

Plug Power released news this morning of receiving a 182 GenDrive order from Central Grocers. Central Grocers first committed to Plug Power back in 2009, and there fleet of more than 100 units has clocked in more than 2 million hours of use! Talk about reliability. The quality of production going on at Plug Power is second to none, and I can vouch for that, having taken a tour of Plug Power  in March of 2014 which you can read about here and here.

The units will be in use at central grocers in the third quarter of 2014, so this shows that Plug is really speeding up production and will have the ability to shorten its sales cycle over time, as clearly shown by this announcement.

Central Grocer's commitment to Plug Power's GenDrive offering highlights a key point I think many investors don't realize. While Plug will be obtaining recurring revenue from the GenKey product offering, providing the hydrogen and infrastructure (usually a 5 year contract), there is also the fact that GenDrive units DON'T LAST FOREVER. The senior production manager at Plug Power informed me during the tour of their state of the art production facilities that the GenDrive units on average last about 5 years (GenDrive's that run around the clock at 24/7 distribution centers last around 3 years, not as much usage lasts 6 years. Again these are high quality products).

What does that mean? Expect Wal-Mart to replace their single 1700+ unit order come 2019 or so. But even more so, expect Plug Power to receive a number of recomitment orders from companies that purchased their GenDrive units back in 2009.

Customers who purchased GenDrive units from Plug Power back in 2009 include:

Nestle
Coca-Cola
Whole Foods
Mercedes Benz
Wegmans
Sysco

While some of these orders were small test units (around 40 units), others were for more than 100.

I wouldn't be surprised if we see some repeat customers knocking on Plug Power's door soon.

Shares of Plug are 8% in pre-market trading, 20 minutes after the announcement was made. Keep in mind a large chunk of Plug shares are sold short, so a volatile ride may be instore for Plug Power investors over the coming days, especially with earnings next week.


From the Press Release:

"This is a success story for Plug Power, as nothing validates our solution better than a satisfied customer who orders more," said Andy Marsh, CEO at Plug Power. "Central Grocers was an early adopter that has been reaping the benefits of GenDrive fuel cell solutions, and will now see additional benefits through our GenCare services."

"Hydrogen fuel cells run longer and maintain consistent power as they operate and are refueled more quickly than batteries," said Ken Nameth of Central Grocers. "Our operators are pleased with the lift trucks powered by GenDrive, and management has been impressed by the high levels of productivity within our facility."

Wednesday, May 7, 2014

Plug Power: This Time It's Different

These four words, "This Time Its Different" is an investors worst nightmare, as famously stated by Sir John Templeton. Thinking a different outcome will occur with no changes to the situation is a foolish thought.

This thought has been highlighted by many investors throughout the past month, as the market begins to top and indicators point to an imminent sell off. Chris Kimble continues to hit the nail on the head:


An overall market downturn will most likely continue the depression of high momentum flyers such as Plug. But for Plug Power specifically, this time it's different.

This chart shows the run up Plug experienced back in 2011 after a small order from Coca-Cola and KC induced bullish behavior. Here's why it's different for Plug Power this time around.
  • Plug Power has set up a fully operating joint venture in Europe with Air Liquide, which they plan on taking full majority control of in the coming years.
  • Plug Power is in the midst of setting up a joint venture with Hyundai Hysco in South Korea. 
  • Plug Power recieved a massive order from Wal-Mart of 1700+ units at 6 distribution centers. The deal is expected to grow in size as it was designed to allow Wal-Mart to easily add more DC's to the deal. Wal-Mart has 150+ DC's in North America alone.
  • Kroger has become a driving force for Plug and is committed to expanding their use of Plug Power's GenDrive units. 
  • Plug Power is now back in the Telecom space with two industry veterans steering the ship, CEO Andy Marsh, and VP of Business Development Jose Luis Crespo. This was not a coincidence, Plug Power can re-enter the telecom space with strong contacts/relationships waiting to be leveraged.
  • Plug Power acquired ReliOn and will be manufacturing its own fuel cell stacks in 2014, which will reduce costs and dependence on Ballard Power.
  • Plug Power has more than $150 million cash in the bank to exploit vertical markets.
  • Plug Power partnered with FedEx to develop range extenders for electric powered utility trucks.
  • Plug Power will commence sales of its Ground Support Equipment GenDrive units in 2014 with FedEx as a first customer.
  • Plug Power has introduced its turnkey GenKey solution, providing the hydrogen, infrastructure, and installation of hydrogen fueling stations. This recurring revenue stream will grow as Plug Power continues to scale up.
  • Plug Power signed up a new customer, VolksWagen, just confirming the true value behind Plug Power's product offering. 
  • The Fuel Cell industry in general is building traction as it becomes ECONOMICALLY FEASIBLE to implement this technology. 
  • Plug Power will produce a profitable EBITDA in 2014....for the FIRST TIME EVER.
There are many other reasons why it's now different for Plug Power. The past is the past. Focus on the future and invest in the future. Weak holders will produce noise and complaints while long holders will reap the benefits in the long term. Plug Power is on the rise and up more than 100% YTD. It's only May, a lot more is in store for Plug Power in 2014. 

I'm long Plug Power.