Dilution Isn’t An Option For This Profitable Under-Followed Penny Stock With Share Repurchase In Place [GeoWire Weekly No. 160]

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Run to $1.00 model portfolio remains in focus

We’ve been discussing our Run to $1.00 (R21) Model Portfolio a lot lately. If you missed it, here are a few key stats featured in our October 20, 2024 article, Setting the Record Straight on Why We Do What We Do:

In that article, we mentioned that as of 10/20/2024, the R21 had achieved an average return of 45% over an 11-year span—not bad for a portfolio of stocks that microcap haters would paint as speculative, where some have gained thousands of percent and produced tens of millions of dollars, including Xpel, Inc. (NASDAQ:XPEL), Tss, Inc. (OTCQB:TSSI), and Zynex, Inc. (NASDAQ:ZYXI).

As luck would have it, last week, we conducted a Skull Session Fireside Chat with a company added to the R21 Model Portfolio earlier this year, which we believe is reaching a growth inflection point.

One of the most critical insights we gained from the chat was that the primary constraint on the impressive profitable growth seen over the past year (sales increased of 12.8% so far in first nine months of 2024 over the same period last year) is the company’s ability to increase inventory—not manpower or equipment—to accommodate the high demand for its services. Encouragingly, the company has no plans to raise dilutive capital or take on debt that could weigh it down.

Now that the company has achieved profitability, management just plans to keep growing and methodically reinvest profits back into the business, paving the way to meet demand by targeting new product segments and geographic markets that it has yet to penetrate.

What’s also attractive is that net margins are currently around 17%. Furthermore, substantial net operating loss carryforwards should help keep these margins healthy for years to come, allowing the company to generate additional cash to reinvest back into operations and inventory.

It remains to be seen if this stock will join Tss, Inc. (OTCQB:TSSI), California Nanotechnologies Cor (OOTC:CANOF) (CNO.V) and Innovative Food Holdings, Inc. (OTCQB:IVFH) as three other stocks in the R21 that rose above the one dollar mark this year. However, we are starting to get more comfortable with this possibility. 

Below, please view the full Skull Session.

The Full Skull Session Fireside Chat is only visible to paid subscribers of GeoInvesting. To access our expanded coverage on This Stock & More, Subscribe below.

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GeoInvesting is a premier research platform for microcap investors, dedicated to uncovering high-potential stock ideas in undervalued companies across various sectors. With over 30 years of investing experience, GeoInvesting has covered more than 1,500 equities, providing often actionable proprietary research. The platform has been instrumental in identifying 200+ multibagger stocks, and offers investors exclusive access to over 600 management interview clips, allowing for deeper due diligence and understanding of the microcap stocks, many of which make it to market-beating premium Model Portfolios. Join the GeoInvesting community for the best stock research and microcap insights to help you stay ahead in the market. To learn more about our Premium Services, go here.. (https://geoinvesting.com/premium-research/)

The post Dilution Isn’t An Option For This Profitable Under-Followed Penny Stock With Share Repurchase In Place [GeoWire Weekly No. 160] appeared first on GeoInvesting.

Source: https://geoinvesting.com/dilution-isnt-an-option-for-this-profitable-under-followed-penny-stock-with-share-repurchase-in-place/