Be careful of VIC writeups

On, there is a writeup on AVID which argues that 4K will drive the adoption of Avid products.  4K basically refers to film and/or video formats that have four times the pixels than HD formats.  However, the reality is that Avid products cannot output at 4K resolution.  Currently, a subset of Avid users are forced to use another product for their 4K conform/online editing/finishing needs (e.g. Resolve, Autodesk Smoke, etc.).  If the project must be delivered in 4K, current Avid products cannot do the job.

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Anybody who believes this slide deserves to lose money in junior mining

Here’s the slide:


BBA did technical report work for Bloom Lake.  Note the big discrepancy between Bloom Lake’s current operating costs and what the technical reports estimated.

BBA did technical report for Kami.  Hmm I guess Alderon’s management failed to mention this in their presentation.  Other slides in the presentation also fail to mention the sulfur and manganese levels in the Kami deposit.

*Disclosure:  No position in Alderon or Altius Minerals (key Altius employees sit on Alderon’s board of directors).  There may be some value in Kami.  However, I think that projections about Kami’s economics are “overly optimistic”.

Microcap stocks and G&A

Thankfully, it seems like many people (including even some institutional investors) don’t get it.  With microcap stocks, it’s very important to examine the company’s general and administrative spending.  The companies with excessive G&A spending are typically doing one or all of the following:

  1. Lining insiders’ pockets or supporting their lavish lifestyles (e.g. private jets, unusually expensive meals, etc.).
  2. Paying for stock promotion.
  3. Operating inefficiently.

All of these behaviours are bad for shareholders.  Excessive G&A is a sign that at least one of these value-destroying activities is happening.  Examining G&A will help you avoid stock promotions and really awful management teams.

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Hollysys: Office Space

(This blog post only explains very minor red flags.  I think I see much bigger red flags with Hollysys but I will not explain them.  This will be a lower quality post compared to other posts on this blog.)

According to HOLI’s SEC filings, it owns Bond M&E and CE Concord.  Hollysys decided to buy one of these companies and then the other.  Here’s Google street view showing their neighboring offices:


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