Second Quarter Portfolio Preview…Significant Catalysts on Horizon

The end of the first quarter always coincides with the end of March Madness. The frenzied first two weeks of the NCAA tournament are over and we are down to only 8 teams remaining. These teams have all positioned themselves for a shot at the title and will be riding high as they head off to Phoenix for the last games of the 2017 championship.

The stock market has similarly enjoyed a frenzied period so far this year, with the “Trump Rally” leading the charge higher. Now, I’ve written that I don’t think it’s truly a Trump related rally, but more a large macro-repositioning.  I still believe that’s the case, especially with large caps outperforming this year. Either way, stocks are way up. And, like the NCAA Tournament shedding most of its entrants, from here there is likely to be increasing selectivity to find the next round of winners. The “rising tide” has lifted all ships, but only ones with meaningful fundamental catalysts will continue to soar as the overall market digests its gains. Thus, heading into the second quarter, we preview some of the expected catalysts upcoming for our portfolio of companies.

What to Expect in Q2…in Alphabetical Order

AQMS: Aqua Metals has been a huge performer in 2017. To continue, the company needs to execute on business, proving their model works. Thus, the Q1 earnings report will be key to detailing volumes, margins, number of shifts and ramp of their first facility. Potential upside surprise? An announcement regarding data storage centers, and their need for a recycling partner.

BTI.V: biOasis is poised for a huge 2nd quarter. Expect them, within two weeks, to announce the closing of their financing, which should be the catalyst for the stock. With the pressure removed, it could get very interesting if they can announce anything incremental from new or existing license deals. Potential upside surprise? Additions to the management team could be in their future.

ESTE: In Q2, Earthstone will be closing their acquisition of Bold Energy. Both companies have been bringing wells online recently. They have recently raised guidance to well ahead of street numbers; I believe they will revise guidance even higher once these wells are online and expect the street to be forced to raise numbers. Potential upside surprise? Another acquisition could be in the works.

RESN: Resonant is also announcing earnings next week. Guidance is the key as they bring new customers into the fold, and accelerate business with existing ones. Potential upside surprise? Additional tier 1 partners.

VUZI: Vuzix has been under pressure from a short attack. This has simply created a buying opportunity. Looking out into Q2, the company has been vocal about guiding the volume ramp and discussing more partnerships similar to the recently announced Toshiba deal. The potential upside surprise is simply the inking of more than one of these previewed deals. Expect that to happen in Q2 and this stock to more fully reflect its leadership in the Augmented Reality space.

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