TPS Position Update – August 16, 2016

. . . . GOLDFIELD (GV) – HOLD 

We recommended the stock in April 2015 at $1.67. Today, it closed at $2.95.

When Goldfield reported Q1 results for 2016, the numbers looked good. Revenue was up 17.1% to $35.8 million from $30.5 million.

Income turned around from a loss of $1.6 million to a $6.8 million profit. Most of this was driven by increases in electrical construction operations.

What’s ahead for this construction company that builds and manages projects for electric utilities and industrial companies?

We would like to see more deals in the pipeline.  The backlog of work is declining, which on one hand is good, because Goldfield can get paid for completed projects.

But right now, the revenue the company is projecting for the next twelve months from existing contracts is slipping.  It’s down to $30.9 million from $38.1 million this time last year.

The company needs to lock in more renewals for expiring master service agreements and it needs to negotiate new agreements to keep revenue strong.

The wild card… and the possible good news… this revenue projection does not include short term projects.  Goldfield describes this activity as a “significant number”.

. . . . IPASS (IPAS) – HOLD 

We recommended iPass in October 2015 at $0.90.  Today, iPass closed at $1.57.

Earlier this month, the company released Q2 results.

Revenue was $16.5 million, there was a net loss of $1.4 million, and an adjusted EBITDA loss of $0.3 million.

The loss of $1.4 million is an improvement over a $3.7 million loss in Q1 2016 and $6.4 million in Q2 2015.  We are encouraged by progress being made with both revenue growth and expense management.

iPass is also making progress on the operational front.  It is growing the size of its Wi-Fi footprint, tripling the number of global hotspots it offered a year ago to more than 57 million.

These hotspots are marketed to both enterprise accounts and consumers through a network of strategic partners.

We are looking for earnings growth to continue and the stock price to grow.

One of the key reasons for this… the install base, which is a key driver of revenue, is increasing.  Average monthly Wi-Fi network users grew 24% quarter to quarter.

Action To Take

• HOLD GOLDFIELD (GV)
• HOLD IPASS (IPAS)
• Move NETLIST (NLST) from HOLD to BUY

Category: TPS Update