TPS Position Update – December 9, 2015

| December 9, 2015

TPS Position Update

. . . . US Geothermal Inc. (NYSE: $HTM) – Hold 

This has been a year of modest gains for the stock, and modest financial headway for the company.

U.S. Geothermal is in the renewable energy exploration business.  It turned in a small profit in Q3, and continues to do a good job chipping away at expenses.

We are more enthusiastic about the company than ever.

It has turned in 12 straight quarters of positive EBITDA and cash flow.

We recommended U.S. Geothermal in April 2014 at $0.78 and it went up to $0.85. Now it’s at $0.65.

It has rebounded nicely from a February low of $0.44.   

What needs to happen to get the stock price moving?  More of the kind of fundamental financial growth we saw last quarter can’t hurt.

Revenue growth will clearly be important.  So will the growth in operating margins.  And when the dust settles on some attractive purchases of power generating equipment the company recently made… the so-called major and long lead equipment bought for five cents on the dollar… there could be a significant positive impact.  

. . . . Finjan Holdings, Inc. (NASD: $FNJN) – Hold   

From the day we recommended Finjan in April at $1.64, the company has been intriguing.  It has also been volatile, given the nature of its business.

It owns a portfolio of technology patents.

When it believes its patent rights have been violated and an intellectual property rights violation has taken place, it is not shy about going to court.

Right now, it is involved in patent infringement lawsuits against FireEye, Proofpoint, Sophos, Symantec, and Palo Alto Networks.

Last month, the firm was awarded a $39.7 million judgment as an award in a patent infringement case against Blue Coat Systems.

Don’t count the money yet.  There will probably be an appeal.  But the company’s attorneys are confident their arguments will continue to prevail.

We continue to value the firm more for its intellectual property than for its ability to collect damages in a lawsuit and look forward to continued revenue growth from license agreements.

The stock price has also been bouncing up and down, largely as a result of the market attempting to handicap the outcomes of legal battles.

Today, FNJN trades at $0.79.  We believe the stock will continue to rebound from its current levels and recommend a hold position. 

Action To Take

  • Hold US Geothermal Inc. (NYSE: $HTM)
  • Hold Finjan Holdings, Inc. (NASD: $FNJN)

Category: TPS Update

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