SmallCapKing

Long-time buy-side pro musing about small-cap stocks, markets, and Wall St experience from the inside. Tweets are NOT financial advice. Do your own work.

[SmallCapKing @SmallCapKing2]

The inability of the market to hold the early day "buy the dip" increases yesterday and today only further my belief (reported recently) that we are within 6 months of a significant decline, particularly in AI, space, and all the hot sectors. Tons of signals hitting. #stockmaket

[SmallCapKing @SmallCapKing2]

Discuss. What happens when $SPCX, Anthropic, and OpenAI have huge IPOs this year, but are NOT included in the $SPX (S&P 500)? Clearly, money will have to come from holdings in S&P (and likely NASDAQ) stocks, so do the indices take a hit?

[SmallCapKing @SmallCapKing2]

Phew. My 2nd largest holding $ASO survived the weak consumer, as expected, putting up good comps and increasing guidance thanks to continued success on their long-awaited turnaround efforts. Stock is up 3% premarket. I'll have more tomorrow.

[SmallCapKing @SmallCapKing2]

On $MPAA, my target pops from $18 -> $28 (a DOUBLE from here), mostly from now using FY3/28 as the out year. (On FY27, it'd be $18.50). Biz BETTER THAN EVER, tho' Q4 abnormally so. Don't expect similar huge Q beats, but FY28 likely >$2. Q's are volatile; long-term should pay off.

[SmallCapKing @SmallCapKing2]

@CapitalFang I'll be back with more, but yeah, we're talking huge #'s leading to a P/E <10x in a non-discretionary category with a good growth component. So even if $MPAA's historical 13x P/E holds (and they're a better company now), looks like $20 could be reasonable. But I'll be back.

[SmallCapKing @SmallCapKing2]

$MPAA absolutely destroyed Q4 estimates this AM and provided an extremely bullish outlook (in line w/ my expectations). Revs beat ests by ~20% & EPS by ~25%. Custs had already showed strength. Leverage will lead to massive EPS growth next 2 yrs. Stock +35% premarket. More later.

[SmallCapKing @SmallCapKing2]

@CapitalFang And yesterday's Boston Globe had a huge article on how people are keeping their cars much longer (a big part of $MPAA's thesis that they've been saying since COVID), with dealers focusing more on this phenomenon, and more retailers getting into the biz. All good for $MPAA.

[SmallCapKing @SmallCapKing2]

@benbstwits No. In fact, in 2000, the largest stocks weren't overvalued. They were really jealous of the dot-coms because they (the large co's) had websites too. There just needs to be massive froth. The frothiest will drop... if I'm right. Then there will be a long-term bargain or 2.

[SmallCapKing @SmallCapKing2]

1/ Having been in the market 35 yrs and managing a few $B during the dot-com rise & fall, I have a very strong feeling that the $SPCX IPO will mark the top of the mkt (w/in 6 mos). When my mother-in-law is hearing about it on the news and asking me to buy... that's a top. (more)

[SmallCapKing @SmallCapKing2]

4/ Discuss

[SmallCapKing @SmallCapKing2]

3/ People will say "this time is different." True. Every time is different. And yet it happens again and again in different ways. What ISN'T different, ever, is the avg Joe's FOMO, greed, and yearning for easy money. And it always ends w/ one last spectacular hurrah. Enter $SPCX.

[SmallCapKing @SmallCapKing2]

JP Morgan upgrades $TSLA from Sell to Market Perform. They had the sell since Feb 2015! The stock is up 2450% since then.
Oops.
That said, it's amazing to see a sell-side firm stick to their guns even in the face of a rising stock w/ potential deal flow and pissed off clients.

[SmallCapKing @SmallCapKing2]

Interesting for those who are still interested in $EGLX / $EGLXF like I am. I'm still a holder and have been adding each Q for the last few as the company has made progress toward a permanently profitable company. Looks like I'm not the only one watching.

[SmallCapKing @SmallCapKing2]

@worldsceo Got what you want
Or was this just a "6-7" thing?

[SmallCapKing @SmallCapKing2]

Well, it looks like the SaaSpocalypse is back. And $PAYS - which should not really be considered part of this group - is breaking the massive winning streak I spoke about yesterday. Don't beat me for killing the streak with my praise!

[SmallCapKing @SmallCapKing2]

The big bump in $PAYS that I referred to today is on twice avg daily volume, and continues a 10-day run of daily price increases following the 3-day drop post-earnings. The stock is now well above the pre-earnings price. Again, I think it's worth $13. Sub-$8 now. My top position.

[SmallCapKing @SmallCapKing2]

$KTCC up 15% today on 10x avg daily volume. This is a low liquidity name, so someone definitely wants in! I have expected a re-accel of biz and a better Q in Jun. My target has been $5 ($4 now), though EPS can be much higher/lower than I expect given big incremental margins.

[SmallCapKing @SmallCapKing2]

Decided to pare my "investment portfolio" pos'n in $BLFS by 10% today simply due to appreciation v avg cost. No sale in my "family account." Combined, $BLFS remains my 2nd largest position, and I'm still committed to it long-term, but short-term, it may be pricey. Hard to value.

[SmallCapKing @SmallCapKing2]

$BLFS showing great mo' in the last hour or so with a lot of buyers coming in. I have no info on any news. And while I doubt a buyout is coming soon, I think $BLFS is a great buyout candidate at some point. It's one of the 2 stocks I hold in my long-long-term "family account."

[SmallCapKing @SmallCapKing2]

Having bought more $PAYS (my largest holding) just 2 weeks or so ago on its post-earnings plunge to <$5, I've sold about 15% of my position today at an avg price of ~$7.70. My target remains $13, but the position has gotten WAY larger than even my #2. Still is.