Private Portfolio Update-LTRX

I completed the sale of my entire position in Lantronix booking a 52% gain.


CSI Update May 2018-Private Subscribers

We stopped publishing our free weekly CSI Blog after 10 years of publishing at the end of 2015. We are following our 4 remaining open positions until the end.

In late 2015 we started offering a paid subscription service which is similar to the Blog, but we tell you exactly what stocks we bought and why—and sold every day, with a weekly summary of activity, open positions, how many shares we own and their valuations.

I have averaged a 43.3% gain on the 27 stocks I have sold (25 winners and 2 small losers) in my private portfolio since January 1, 2016. Nine of the 25 stocks have been bought out, including six in 2017 and one already in 2018.

If you are interested in becoming one of our private paid subscribers, please e-mail me at

Here is the list of private subscription stocks I have bought and sold since December 2015.

2018 Internet Services Co. (10% sold) 49% gain

2018 Communications Equipment Co. (20% sold) 54% gain

2018 Ceragon Networks, 82% gain

2018 Telecomm Equipment Co. (1/3 sold) 17% gain

2018 Pitney Bowes 31% gain

2018 Calix-1% gain

2018 Xerox 34% gain, Buy-Out

2018 RMG Networks-1% gain

2017 Telecommunications Co., 59% gain (partial sale)

2017 magicJack 17% gain, Buy-Out

2017 eGain 56% gain

2017 YUME 90% gain, Buy-Out

2017 MaxPoint Interactive 60% gain

2017 Shortel 24% gain, Buy-Out

2017 Tremor Video 25% gain

2017 MRV Communications 6% loss, Buy-Out

2017 Ceragon Networks 55% gain

2017 Angie’s List 60% gain, Buy-Out

2017 Lantronix 135% gain

2017 Syneron Medical 46% gain, Buy-Out

2017 RocketFuel 140% gain

2017 Conduent .1% gain

2017 Harmonic 74% gain

2016 Ceragon Networks 48% gain

2016 Alphatec 71% gain

2016 Universal Insurance 36% gain

2016 Mitel Networks 15% gain

2016 Avid Technology 50% gain

2016 Silicon Graphics 70% gain, Buy-Out

2016 Imatron 30% gain

2016 Harmonic 80% gain

2016 United Online 5% loss, Buy-Out


CSI Update May 2018-Free Blog

Of our closed out positions on the Blog, since inception, we have had 71 winners, 18 losers for an 80% win-rate with an average gain of 37%.

We will continue to update on the remaining stock positions individually until they are all sold.

In May:

SYNC reported Q1 2018 earnings. Better than guidance but still nothing to write home about. Revenues were $32.9 million compared to $26.5 million last year and they lost about $1.2 million (Non-GAAP) and had Adjusted EBITDA of $611,000. Net cash was $11.25 million. The CSI valuation dropped from $6.46 to $5.25 which was way better than their guidance which would have resulted in a valuation of $4.20. Q2 guidance is revenue of $33-$35 million and a GAAP loss of $1.8 to $2.9 million. For the year, they are saying revenue of $150 to $155 million and Adjusted EBITDA of $7 to $10 million. So if they aren’t lying, the valuation should go back up over the next few quarters. They currently have about $44 million of recurring revenue a year. Even at a modest 3X multiple the recurring revenue stream is worth $132 million a year compared to the current market cap of $74 million. But at this point I don’t know what the catalyst is to get this stock moving up. It was supposed to be the $100 million AT+T deal. There was not a mention of AT+T in the press release, although on the conference call they said AT+T revenue in the quarter was $8.5 million. HOLD

ATEC reported Q1 2018 earnings. This is going to take longer than I had hoped. The bet here is on the new management from Nuvasive. They seem to have a plan. First it is converting their distribution channel to dedicated distributors and they say they are 50% of the way there. The second is to add products,  which they are saying should happen in the second half of 2018. Third is to differentiate their product offering which is why they bought SafeOp, which when approved by the FDA (hopefully by the end of the year) will help surgeons protect the patients nerves when they are operating. They also raised $50 million to finance the purchase of Safe Op, be ready to pay off their maturing debt later this year and fund their operations (and losses). So with all that said, their financial results don’t show any progress. U.S. commercial revenues (remember they sold their international business a while back and they are just fulfilling their obligations to the buyer at little or no margin) were $19.2 million down from $20.9 million. Gross margin was 70%. Non-GAAP adjusted EBITDA was a loss of $2.4 million compared to $1 million positive last year. My conservative valuation fell to $3.11 from $5.78 (mostly due to all the new shares outstanding. The only good news I can see is that their net debt is down to about $16 million. HOLD.

AVID reported Q1 earnings. Another long-termer it seems. The best news was that they refinanced their debt at lower interest rates and pushed the maturity out to 2023. Revenues were $97.9 million compared to $104.1 million last year. Non-GAAP operating income was $3 million down from $9.4 million last year. My best estimate is that they lost $2.5 million for the quarter. My valuation fell to $14.98 from $17.51. The stock is still trading at a huge discount to our valuation, but our valuation keeps falling. HOLD, and hope for some catalyst to move the stock, like a Buy-Out. Q2 guidance is revenues of $97-$107 million and adjusted EBITDA of $4 to $10 million.

PRSS reported Q1, 2018 earnings. Nothing good here. Revenues fell to $14.6 million from $18.3 million and they lost $3.6 million compared to $3.4 million last year. The “turnaround” doesn’t appear to be turning in the right direction. Our valuation fell to $4 from $7.77. Net cash was $1.32 a share down from $1.92 last quarter. A buy-out is our only hope here, and I doubt it would be above our current valuation of $4.00. HOLD

May 2018 Legacy Positions:


                  Share      Current      Lifetime      Current      Price to     Prior

 Stock         Cost          Price          Gain            Value         Value       Value

SYNC           $2.56        $1.90           (26%)             $5.25         36%         $6.46

PRSS           $4.01         $1.40           (65%)             $4.00         35%         $7.77

ATEC          $7.06          $3.83          (44%)             $3.11         123%       $5.78

AVID          $8.35          $5.10          (39%)            $14.98         34%       $17.74