27 Jul REDUCE/SELL – GEOSPACE TECHNOLOGIES CORPORATION (NASDAQ:GEOS)
JULY 26, 2018 – REDUCE/SOLD 400 SHARES OF GEOS AT USD$14.20 PER SHARE(0.5% OF PORTFOLIO)
GAIN OF 30%
Today I sold half of the holding in GEOS, realizing a 30% gain and using the proceeds to boost cash and for new investments.
JUNE 1, 2018 – BUY 800 SHARES @ USD$11.05/p.shr (1% of portfolio)
Today I bought shares in Geospace Technologies Corporation, a provider of siesmic data to oil and gas companies interested in prospecting for oil, much of it offshore. It probably comes as no surprise that GEOS trades over 90% off it’s all time highs, reached in 2013. I am buying GEOS at a market capitalization of USD$150 million; the business has no debt, USD$40 million in cash and earns revenues of USD$70 million. Unfortunately, GEOS has not made a penny in 5 years, and in fact has racked up losses of over USD$100 million over that time period. Things are bleak. However, GEOS has maintained a large market-share in providing siesmic data products – revenues reached their nadir in 2016 (USD$62 million) and reached USD$73 million in 2017. This level of revenues is still a money losing situation with GEOS as they have not cut their operating expenses enough to reach profits at this depressed level of revenue. Management is maintaining elevated spending in the hopes that a turnaround in revenues is just around the corner. I feel pretty good about jumping in at these levels and annual revenues of USD$100 million may not be too far off – at that level the firm is marginally profitable. I like GEOS at these levels and feel that it is a reasonable value with a good prospect of a jump in market value with any upturn in revenues. I invested about 1% of the portfolio in this firm.