Seeking Alpha

Jeffrey Bash

View as an RSS Feed
View Jeffrey Bash's Comments BY TICKER:
Latest  |  Highest rated
  • AUXILIO: An Undiscovered, Inexpensive Microcap That Should Double In 12 Months [View article]
    If you "guarantee" savings, a term that I believe has been used, then I expect that if they are not achieved the customer still gets them but that piece of business has reduced profit margins (and the "stock just doesn't double"). Note, however, that the bigger the base of more mature business the less that risk is to the overall business from any new customer. Also, they have done this with a lot of hospitals by now, so they have plenty of experience with analyzing and pricing them.
    Apr 13 11:15 AM | Likes Like |Link to Comment
  • AUXILIO: An Undiscovered, Inexpensive Microcap That Should Double In 12 Months [View article]
    smallcap sleuth, I have owned this with a large position for many years, so always have interest in intelligent comment. (I also post on Yahoo.) As to your specific question, I have not talked with management to find out more than was in the public release on it. My guess is that this agreement was to secure managed print expertise (short of signing a multi-year deal) that might also help with the Electronic Health Records (EHR) aspects of the Affordable Care Act. Logically, this might be something that someone who thinks their print operation is already fairly cost efficient might be interested in.
    Apr 11 12:32 PM | Likes Like |Link to Comment
  • AUXILIO: An Undiscovered, Inexpensive Microcap That Should Double In 12 Months [View article]
    The stock could (not "should") double in the next 12 months. His "base case" indicates a price of $2.30. I also think his valuations may be a bit high, as the stock should get some valuation discount for having 9 million more shares from warrants, options and convertibles potentially outstanding, at an average price of a little over a dollar.

    One thing not commonly known is that last year's Proxy gave EBITDA targets that had to be met to get equity-based compensation for certain execs - $6.3M for 2014 and $9.2M for 2015. That certainly suggests major bullishness about the longer term outlook a year ago, which might have been derailed a bit by the lengthening of the sales cycle publicly mentioned. (They met the $2.0M target for 2013.)

    Finally, they are obviously considering a reverse split in order to secure a better listing. However, they are now only seeking shareholder approval for one and publicly said that the issue has not been decided one way or another. I share your view about trading liquidity not being very good as it is.
    Apr 10 11:32 PM | Likes Like |Link to Comment
  • Is The VIX Calling A Top? [View article]
    I like your XLU analysis, in particular. XLU has been challenging highs hit in the Spring of 2013 before a major correction. What is interesting about that is a year ago the 10-year Treasury was 100 basis points lower. A material difference in the relationship of these two income vehicles has emerged since, without a material difference in the outlook for utilities, suggesting your view of a late-stage allocation shift is valid.
    Mar 21 02:24 PM | Likes Like |Link to Comment
  • John Hussman: It Is Informed Optimism To Wait For The Rain [View article]
    I have read John's comments for years and like his academic and probability-based approach. Playing the odds IS prudent investing. That said, I have two suggestions that I would like to see covered in future comments.

    1. This time IS different because of the Fed's QE actions. While the eventual outcome is likely to be as he suggests, how does an investor adapt when you have something new going on?

    2. This week's comment references a 2% average annual return expected over the next 10 years. However, the same graph shows that in 2000 the expected 10 year return got down to -4%. That means this market would have to go up 60% more to push enough gains into the present to achieve a matching result, and still not exceed a recent historical precedent. For balance, I think that it would be desirable to communicate this.

    Finally, my opinion is that there are now more stocks trading over $100 since 2000, and that ended with NASDAQ down 80% or more. I would be curious if data could be developed indicating a greater predictive value for this price dispersion than the simple fact that lots of stocks with higher prices means the market itself is higher. My expectation is that at market peaks the top decile is more above the average price than at other times.
    Mar 12 08:12 PM | Likes Like |Link to Comment
  • Green Mountain Deal With Coca-Cola Shows Desperation [View article]
    Never had a position in the stock but have friends in VT who did. I have an expensive education that the biggest mistake an analytical investor can make is to paper over a position going catastrophically against you with facts and analysis. That said, a bunch of this huge jump has to be short covering so short term risk is increasing, even if longer term the stock might go to $150+ (double the price Coke got its shares at) if the Coke deal is a success. With these huge gainers it can be imprudent to ignore the change in the relationship between the size of the upside and the size of the downside.
    Feb 6 09:49 AM | Likes Like |Link to Comment
  • Auxilio's CEO Discusses Q3 2013 Results - Earnings Call Transcript [View article]
    This was an outstanding quarter. As they noted, the next two quarters will not be as good due to implementation costs of new accounts. The slowdown in the sales pipeline is a bit of a concern, but we did not hear that they are losing opportunities altogether, but that it is due to the general environment. It has an upside as well. With lower new business strain for a while, it will allow their balance sheet to improve nicely and eliminate concerns of capital adequacy with investors or prospective customers. (The convertible debt coming due at the end of July 2014 will either be converted or paid off.)
    Nov 14 10:15 PM | Likes Like |Link to Comment
  • What Are Reasonable Gold Market Expectations? [View article]
    The next to last great move in gold ended around 1980 at around $800/ounce. The price subsequently dropped about 75% and it was roughly 20 years before the huge upmove over the last decade began. For perspective, the price is still 5 times what it was at the start of this move and, technically, could easily drop several hundred dollars more. (See 1975-2013 chart at http://bit.ly/nInUMW.)

    While I do not disagree that the debasement of currencies worldwide is clearly a positive factor for gold, when the current bear market ends and a new bull market begins is not predictable and could take longer that anyone expects - as it did after the 1980 peak. There is a difference between negative headlines and despair. (Perhaps it will be time to become more positive after the TV ads touting gold disappear.)
    Jun 23 10:02 AM | 5 Likes Like |Link to Comment
  • Crexendo's Probability Of Success Turns Favorable [View article]
    EXE has recovered to above $3.00 on much higher than normal volume in the last two weeks, as a new buyer has clearly emerged. On Friday a "Golden Cross" was achieved, when the 50 day moving average crossed above the 200 day moving average. In my opinion, this buying reflects recognition that the company has successfully finished exiting its previous seminar-marketing business and has made meaningful progress with its new recurring revenue business model, selling telecom and other services to real businesses of any size. Further discussion of the recent days' trading can be found on the Investor Village Crexendo discussion board.
    Jun 22 03:00 PM | 1 Like Like |Link to Comment
  • Auxilio Is Uniquely Positioned To Capitalize On Health Care Change [View article]
    Although without seeing the earnings actually projected it is difficult to comment, I think a ten year earnings growth rate of 15% is inconsistent (too low) with the publicly stated (in the Proxy filing) EBITDA targets for compensation purposes of $2M, $6.5M and $9.2M for 2013, 2014 and 2015, respectively (which I assume they plan to beat). 15% compounded for ten years amounts to 4 times over the period, which it looks like we will have in 2 years from the numbers quoted. In fact, when you subtract interest, taxes, depreciation & amortization of very roughly $2M in each year to get reported earnings, the earnings growth rate gets even higher.
    Jun 4 01:53 PM | Likes Like |Link to Comment
  • Crexendo's Probability Of Success Turns Favorable [View article]
    The company is running two webinars primarily to attract former Inter-Tel dealers (Mihaylo's former company) to Crexendo's dealer network. I strongly recommend listening to the webinar from an investor point of view. While they said it will be archived for subsequent viewing, the second one is today at 2PM PDT (5PM EDT) at http://bit.ly/10kUidt (advance registration required). I would be surprised if anyone watching the one I saw does not come away impressed with both the presentation and the interest of questioners. Also, the stated number of 100 participants on the first one is impressive, given they only need about 50 dealers producing an average of $30,000 per month in 36-month bookings (perhaps 25 phones worth of service sold per month) to reach profitability after a year (with the additional achievable expense savings mentioned on the recent conference call).

    50 dealers x $30,000 contract revenue booked per month / 36 = $41,667 in recurring revenue per month
    $41,667 x 12 = $500,000 recurring revenue per month after a year (ignoring minor attrition) --> $1,500,000 per quarter

    I think that the stock is timely. In my opinion, EXE will someday have the market cap that EGHT has now, which is $540 million. I also believe that if/when Steve goes on the road later this year with the story, institutional investors will have no problem accumulating this up to a $50M market cap by early next year - still leaving a ten-bagger ahead. That makes the stock, in my opinion, timely under $3.00 from both a short and long term point of view. Furthermore, Steve's publicly stated (large) bid now of $2.55 under a 10b5-1 buy program manages the downside risk.
    May 22 09:56 AM | 1 Like Like |Link to Comment
  • Auxilio Inc. Has Multi-Bagger Potential And Downside Protection [View article]
    The proxy statement contains very interesting info. For various warrant awards to vest the company has to achieve stated EBITDA targets for 2013 through 2015. The one for 2015 is $9.2 million. Since their compensation depends on achieving these, I would say the odds are at least 50/50 they do it. Assuming a higher stock price and more fully-diluted shares, the 2015 EBITDA number would be equivalent to roughly 20 cents earnings per share in 2015 on a fully-taxed basis (although they have NOLs, meaning not much in taxes might actually be paid).

    Incidentally, the target for 2014 is $6.3 million, versus $2 million for 2013. while $2 million may not be enough to move the stock price materially, I think that if it becomes apparent they are on track for the 2014 target, the price will see $2. Furthermore, if they can achieve these numbers, share dilution from some stock offering may cease to be a material issue.
    Apr 17 10:52 PM | Likes Like |Link to Comment
  • Utilities: How Much Longer Can They Power Up [View article]
    The article is very well done. However, parabolic price rises rarely end well. Note that the excess over the 50-day moving average of 6 percentage points is only a couple of points from being the highest for almost all of the historical period shown, aside from a few extreme outliers.

    This is not an industry where a decline after incorrectly retaining overvalued stocks can readily be made up by an earnings growth rate of only several percent. The XLU is rapidly pushing into the current price several years of future growth (decreasing expected future returns to a long term holder). Finally, I would note that your target price range of $35-37 on XLU is the equivalent of 2 years or so of normal returns that might be gained by not ignoring historically high valuation.

    FWIW, I have owned FKUTX for years and am just now starting to scale out of the position and into cash. I think that it is time to start worrying more about the return of your money on utilities, and generally, than the return on your money (as investors in Apple have long since learned).
    Apr 11 11:15 PM | 2 Likes Like |Link to Comment
  • Auxilio Inc. Has Multi-Bagger Potential And Downside Protection [View article]
    Ian, STRM has much higher gross margins than Auxilio. I have suggested to the company raising prices a bit as a natural way to ease up on the growth accelerator - in other words, getting a similar bottom line contribution from a smaller amount of new business without quite as much new business strain.
    Apr 3 10:16 AM | Likes Like |Link to Comment
  • Auxilio Inc. Has Multi-Bagger Potential And Downside Protection [View article]
    The fourth quarter was pretty good - a $39M run rate on revenue, a loss of $75K, cash flow from operations of plus $325K (excluding balance sheet changes), and forecast of coming profitability. There was further discussion on Y. I continue to rate the stock an "accumulate" under $1.00 and especially at the recent bid of 85 cents.
    Apr 2 05:47 PM | Likes Like |Link to Comment
COMMENTS STATS
47 Comments
54 Likes