GeoWire Monthly, Vol. 4, Issue No. 8, August 2024 Review

We’ve been hot on the trail of data center-themed stocks, especially after one of our Top 5 Faves, $TSSI, showboated its way from $0.27 at the beginning of the year to a recent high of $5.67, or over 1,900%.

With each week that goes by, more investors are understanding that TSSI may be the main rack integration partner for DELL. This information discovery process will take a little longer on the over-the-counter market, where TSSI trades.

This multibagger move was helped along by a series of circumstances that all fed into the stock’s momentum, from an obvious data center branding strategy showcasing itself as a major contender in the data center services space (with DELL as its largest customer), to a better than expected Q2 earnings report, to last week’s Hindenburg Research short report on $SMCI.

The Hindenburg report put TSSI in the spotlight as investors digested the information and scrambled to understand how the company may be a beneficiary of the bad press on SMCI. This gave TSSI a little shove upward before the stock settled below $5.00 on Friday.

Hindenburg accused SMCI of fraud, accounting irregularities, and significant quality control issues. The report highlighted high server failure rates (up to 17.5%), firmware problems, and poor after-sales service. This is significant as SMCI competes in areas similar to TSSI, including data center integration and server solutions.

TSSI, which partners with Dell, may stand to benefit from SMCI’s challenges, if they already aren’t. Dell, praised for its quality and reliability, was identified by Hindenburg as a key competitor. The report suggests that SMCI is losing business to more reliable competitors like Dell, which could create new opportunities for TSSI. 

The fact of the matter is, our Artificial Intelligence Screen, which now includes 17 stocks, helps us to stay primed to quickly deploy research resources on stocks on this list that  we think are timely and undervalued. This already worked with one stock on the screen that we swiftly added to our Buy on Pullback Model Portfolio #12 at depressed prices. It ended up rising over 60% in 2 weeks, and we still think it has a near term upside of between 45% to 155%. 

200+ Multibaggers And Counting

In a recent quarterly update, this company indeed revealed its strategic push into the data center market, securing long-term agreements for its power-related products that serve this sector. The increasing global demand for data center power solutions positions the company favorably.

Moreover, a review of the company’s website confirmed its focused strategy on the data center market, further validating our positive outlook on their direction.

Regulatory filings highlighted the company’s prioritization of the rapidly growing data center sector, with efforts to enhance manufacturing capacity to meet the rising demand for its critical infrastructure products.

Our research indicated that despite recent revenue declines due to the company exiting low-margin areas, this strategic shift enables a focus on higher-margin opportunities. Coupled with debt reduction and a refined business model, the company appears poised for accelerated earnings growth as sales begin to recover.

Last week, we spoke with the CEO of the company, and he will soon be joining us for a live discussion which all Premium Members can attend.

So, if this wasn’t exciting enough, our pipeline of AI-centric and data center-themed stocks contains a few more dark horses that no one is talking about and that we think could be great candidates should their turn come up due to unjustly beaten down stock prices. You never know when that will happen, but better to be ready to pounce than asleep at the wheel.

Continue Reading Rest of Commentary Here.

We started building Buy on Pullback Portfolio #12, as we said we would do, here. We just added our first 3 stocks, with 4 more on deck.

Click Here To Gain Access To Our Buy on Pullback Model Portfolio #12.