TPS Position Update – January 13, 2016

| January 13, 2016

TPS Position Update

. . . . iPass Inc. (NASD: $IPAS) – Hold 

We recommended iPass in October 2015 at $0.90 and it went up to $1.06. 

Now it’s at $0.95.

For the most recent quarter, Q3 2015, iPass lost $3.43 million.  Revenues were $14.99 million.  

It’s not as bad as it looks, because earnings decline comes as a result of non-operational activity. 

There were increases in operating and pretax margins. Operating margins improved from -23.8% to -16%.  Pretax margins went from -25.9% to -22.7%.

The company is in the mobile connectivity business.  Its focus is delivering global roaming services for enterprise employees and service provider subscribers. 

Market share appears to be holding steady and new agreements with global partners are being forged, most recently with Reliance Communications, a major wireless company in India.  

Agreements like this let iPass expand its footprint so it can offer more roaming services and a special network of hotspots.

We are happy to see more agreements like the one with Reliance.  We would be happier to see stronger revenue.

For the most recent quarter, revenue was $14.98 million. 

. . . . Flexible Solutions Int. (NYSE: $FSI) – Hold   

Earlier this month, the company bought back 1.75 million shares of its stock at $0.90 per share.

Flexible Solutions is in the environmental technology business.

It develops and manufactures biodegradable polymers for oil extraction, detergents for water treatment, and crop nutrients.

We recommended Flexible Solutions in February 2015 at $1.20. Now it’s at $0.97.  The stock has bounced back from an October low of $0.85. 

We still believe FSI is a good stock and undervalued by the market.  The earnings outlook continues to improve.

Q3 revenue was held back by bad weather in Texas that impacted sales of the firm’s WaterSavr product.  

WaterSavr is a water evaporation retardant. It can cut evaporation by up to 30%, and it is used on reservoirs, lakes, aqueducts, and irrigation canals.

Q3 revenue was $3.3 million and income was $237,000. Expenses have been trending down… Quarterly Selling General and Administrative costs have edged down from $926,000 in Q1 to $327,000 in Q3.

Action To Take

  • Hold iPass Inc. (NASD: $IPAS)
  • Hold Flexible Solutions Int. (NYSE: $FSI)

Category: TPS Update

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