Weekend Rapid Fire – 27 November 2022

I had some time on this dreary Midwest weekend and wanted to give some rapid-fire thoughts / updates on some of my favorite tickers from the past week. I’ll try to keep it brief, so let’s getting rolling…

RJDG

I will continue to harp on RJDG until I’m blue in the face. This is currently my most undervalued penny stock that gets overlooked because it isn’t “sexy”. RJDG is a holding company that owns three business units:

• Silex Interiors – this is their main bread winner that manufactures custom granite countertops in Oklahoma. Strong revenue growth and healthy margins.
• Healthcare – this is their IT / billing solutions segment for the healthcare industry. This is a growth area for the company and there’s been great news releases on their growth.
• Environmental Services – not much too report here, very small division of the company and isn’t a large contributor.

This company has been consistently trading at or below its tangible book value, has guidance for their fiscal year ended 8/31/2022 of 5.2m revenue, consistently 10-15% net margins, and only a 1.9m market cap (that’s a PE multiple of around 3 or 4 btw…). Oh also, did I mention they have no 3^rd party debt and haven’t had dilution in years?!

The fact that this continues to go overlooked continues to baffle me… I challenge you to do some of your own DD and learn more.

CYBL

My first CYBL article went live on Friday. If you haven’t read it yet, you can find it here:

Be on the lookout for more CYBL from me, with my next article in the works discussing their ownership structure and their ever-confusing Series A-C Preferred Shares. I’ll also get into their financial reporting woes a bit.

I love the company, their model, and what they’re doing for their target markets. But I think there’s a few things I need to point out in that article so people understand the full picture. But I don’t want to give too much away yet 😊… be on the lookout!

ALPP

The news from ALPP this week wasn’t really “new” news if you’ve been following along. They released two more 8-k’s basically saying that they received notice from the NASDAQ that they’re late on their 10Q (we all knew this from their accounting issue discussed in previous article). The market didn’t really seem to mind it too much as this should be a one-time issue, but an annoyance, nonetheless.

They claim to be close to re-filing their past filings and then we’ll get the 10Q for Q3. So keep your eye out for those.

AITX

Two key things on AITX I wanted to point out. First, their December open house is on December 7^th and there should be some really cool updates from the company there on product developments and maybe some other surprises! I will be tuning in via livestream, but I know some of the AITX investor cast of characters (and I mean that in a good way) will be there and I’m upset I won’t be able to make it!

Second thing, the AITX share price had a huge surge and was up almost 200% from its previous low over the last week or two. This surge even saw them go back above a penny and saw the most volume in the past month. We’ve now seen that buying activity die out and the share price has now snuck just below a penny.

Good to see the volume, but a little disappointed it’s not holding over a penny for the QB uplist. That being said, the QB uplist doesn’t matter because AITX has 1. Plenty of volume already and is very liquid, and 2. They are full SEC reporting already. Either way, I wouldn’t be surprised to see volume stay at elevated levels coming into the end of the calendar year.

SIRC

First off, I released my analysis of their Q3 10Q last week (that’s right, an actual 10Q now that they are SEC reporting!). You can read that here:

Big upcoming catalysts for SIRC will be updates on their financing activities and if/when they will get their big capital raise. Their share price did not take kindly to the 10Q and lack of concrete updates/timing on the large financing packages they’ve been working on for the last year it feels like.

I think the market is getting jittery about their ability to actually raise cash to fund expansion, and it’s not completely unfounded. We saw the Arbiter money fizzle out and we’ve been hearing other updates for months, but no significant cash has entered their accounts. I think that makes people nervous about the company and the thought is probably: “if they can’t effectively raise financing, what else is wrong with the company?”.

My thoughts… I am still bullish. The big catalyst will be if/when they announce this big financing package, I think the share price is only going to go up. They have too much financial momentum for them to not get it done in some respect in my opinion. They have strong earnings and growth, are now full SEC reporting, and are working on their NASDAQ uplist. As long as those three things continue (earnings growth, quality of reporting stays high, and NASDAQ uplist), I think it is INEVTIABLE that they will get large, favorable, financing packages. If that doesn’t continue, well then the company will generally be in trouble…

Other Tickers

In closing, here are some other tickers I’m watching:

• RELT – strong growth continuing and trading at a super low market cap for their growth potential. A little hesitant due to the slowing housing market, though… they are in the residential construction business, mostly with pools.
• NROM – kind of a funny one, but they are in the craft pizza franchising / store ownership business in Indiana. They were overvalued for a long time but they are dangerously close to undervalued now.
• XALL – I love this company, but their financial reporting quality is not high enough yet. They are a fin-tech company that are growing at a nice pace. But I have a hard time figuring out which businesses drive their revenue… Either way, they’ve been profitable, dilution has ceased for the last 12 months, and they have showed no signs of slowing down.
• DDDX – big fan of this company and I am bullish on on-shoring manufacturing. That being said, I haven’t fully thought through my valuation of the company… so I’m holding off for now.

I’ll leave it at that… thanks for reading and enjoy the rest of your weekend!

THIS ARTICLE IS NOT FINANCIAL ADVICE AND IS INTENDED ONLY FOR EDUCATIONAL PURPOSES. I AM NOT A FINANCIAL ADVISOR. AS OF THE TIME OF POSTING THIS ARTICLE, I HAVE A LONG POSITION IN RJDG, AITX, AND ALPP.