TPS Position Update – June 14, 2016

| June 14, 2016

TPS Position Update

. . . . iPass (IPAS) – Hold

We recommended the stock last October at $0.90.  Today, it closed at $1.20.

iPass is a wifi company with three products:  INVIBLE, EVERYWHERE, and UNLIMITED.  Each product lets users connect to the world’s largest wifi network.  (It’s a cloud-based service with 50 million hotspots.)

Another money-losing quarter is holding iPass back. For the quarter ending March 31, iPass reported a $2 million loss on revenue of $14.7 million.

One key is revenue, and more sales.  The firm claims it’s making headway.  

In Q1, iPass turned in what it refers to as its “largest quarterly bookings, or ACV, in at least five years.”

Another key is keeping subscribers longer.  Customer churn has been a problem.

When will losses turn into profits?  Tough to say… guidance from the company is forecasting something between a loss of $1 million and a profit of $1 million for 2016.

The company needs to stop burning money.  It had $17.1 million in the bank at the end of March, down from $20.3 at the end of December.  The burn rate has been in the range of $2.5 – $3 million a quarter for the past year.

We have made money on the stock, and we’ll remain patient.  We love the iPass business model.  The sales team deserves a chance to perform. 

. . . . Sino Global Shipping (SINO) – Hold 

When Sino Global sank to $0.45 back in February, we took a deep breath and held on.  Today, SINO closed at $0.82.

This has not been a fun ride.  We recommended Sino Global Shipping back in September at $1.01.  Escalating uncertainties surrounding the health of the Chinese economy have kept a lid on the stock’s performance.

But we remain committed to SINO and here’s why.

The company has been shoring up its financial position.  It’s a stronger company with a healthier balance sheet today than it was when we invested in it nine months ago.

The company has also remained focused on integrating its shipping capabilities with land transport.  It’s working on creating a seamless solution for shippers and adding strength to the supply chain that links shipping between China and the U.S.

Last month, Sino inked a strategic partnership with Shandong Hi-speed TEU Logistics. This creates a new and stronger platform for coordinated shipping between China and North America.

Despite soft revenue, and despite cash in the bank going down, the balance sheet is still in fairly good shape.  The company has $4.1 million in cash, working capital of $6.1 million, and no long-term debt.  

Receivables have been cleaned up dramatically with two unpaid bills of more than $4 million finally collected. 

Action To Take

  • Hold iPass (IPAS)
  • Hold Sino Global Shipping (SINO)

Category: TPS Update

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