What Else is in Small Cap Activist Barry Honig's Portfolio?
What most people don't realize is that moves like MGT Capital Investments Inc. (NYSE MKT: MGT) only happen when a company has a behemoth investor behind it. MGT's massive move could mean more big returns in not just this name, other companies in this small cap investor's portfolio.
Barry Honig is a Leading Small Cap Investor
Warren Buffett says, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." Barry Honig is on a winning streak from buying wonderful companies at rock bottom prices. On CNBC and in Barron's everyone reads about the titans of Wall Street like Carl Icahn and Bill Ackman who buy companies at low prices. People see Mark Cuban negotiate stakes in start-up and small businesses on Shark Tank. Barry Honig is a titan of the small cap sector, which is where earlier stage small businesses are public so smaller investors can own them. Honig's portfolio is on fire right now.
Honig's Recent Wins
MGT Capital Investments Inc. (NYSE MKT: MGT). On December 31, 2015, Honig disclosed a 9.1% stake in MGT when the stock was trading at $0.23. Since Honig got involved, MGT teamed up with legendary cyber security expert John McAfee to acquire D-Vasive, a cyber company focused on cell phones.
Venaxis Inc. (NASDAQ CM: APPY). Last week, Honig filed that he owns a 9.97% stake in Venaxis Inc. when the stock was trading at $3.20. As of Wednesday morning, it was trading at $6.00 on the mere rumors after Honig got involved. With a pullback to the mid 3s as of writing this I'm sure it's a sure win again. Venaxis develops its licensed animal health assets in the United States. It has license agreement with Ceva Santé Animale S.A.
Long Track Record
Honig has a long track record of creating value in other companies.
Back in June 2007, a New York-based company called InterCLICK (NASDAQ:ICLK) was founded and Honig was involved from day 1. The company used audience intelligence and targeting data to determine marketing strategies. Along with the help of co-chairman Michael Brauser, Honig grew annual revenues to over $125 million. InterCLICK eventually traded as a $150 million market cap NASDAQ company ultimately selling on November 1, 2011, to Yahoo! In a in a deal valued at roughly $270 million.
In 2011 Honig became the Co-Chairman of ChromaDex Corporation (NASDAQ: CDXC). This one was not a flash in the pan, one of the leaders in the nutraceutical space and now almost a $200mm market cap company. Hong and Brauser stepped off the board, but still own their stakes of the company.
What else is in the Honig activist book?
VerifyMe, Inc. (OTC: OTCQB:VRME). Honig invested in VerifyMe Inc. in February. This came to light when VerifyMe registered Honig's ownership of 875,000 shares. The company has 7.3 million shares in its float according to Bloomberg and trades at $0.20 per share, a market cap of $1.4 million.
A brief look at the company history is simple. The company was restructured about one year ago with a new management team led by industry veteran Paul Donfried. Tom Nicolette recently joined the company as CEO, probably at the request of Mr. Honig.
The company has products in two related areas: multi-factor authentication technology and anti-counterfeit pigments. As we all know fraud is a huge problem, but this company's products target the core of two critical issues 1) who is logging into a device and 2) if a physical product is counterfeit or not.
While I believe that the multi-factor product is a game changer, I am going only going to describe the pigments because I believe that is where the near term catalysts are. The company has begun to show a developing, but close relationship with HP. What I can gather from what the company has said publicly is that HP will be using the VRME patented pigments in its industrial Indigo printers and they are working on a deal to make that happen. With the statements that they have made and Honig on their side I'm sure this is coming soon. With the relationship that Brauser and Honig have with pharma magnate Phil Frost I could see their pigments being deployed on drug packaging in the not too distant future.
What does it all mean?
Legendary investors are subject to hot and cold streaks for a variety of reasons. Unforeseen macroeconomic forces have caused turbulence for the likes of Warren Buffett, Carl Icahn, Bill Ackman and others. Mental road blocks have also caused wild swings. If you watch Billions, just ask Bobby Axelrod.. At the end of the day, we are all human regardless of our resources or how many Ivy League analysts surround our trading desks. What remains constant through the history of Wall Street is when iconic investors find their rhythm, fortunes can be made by following them and strategically allocating capital alongside them. So I'm long VRME.
Disclosure: I am/we are long MGT, CDXC, VRME.