Boole Microcap Fund

April 27, 2025

ADF Group (DRX.TO / ADFJF) is a North American steel fabrication company that designs, engineers, and produces complex steel structures. They specialize in connection design, industrial coating, and installation, using advanced automation and robotics to complete high-quality projects quickly.

ADF runs two fabrication plants—in Terrebonne, Quebec, and Great Falls, Montana—plus two paint shops and a U.S. construction division focused on steel erection.

(h/t Jumpman23 on Value Investors Club.  See here: https://valueinvestorsclub.com/idea/ADF_GROUP_INC/0351385969)

The company operates mainly in Canada and the United States, with strong coverage in the U.S. Midwest, Southeast, and West, and Eastern Canada. It serves the non-residential construction market, including commercial buildings (like office towers and recreational centers), industrial facilities (such as pharmaceutical and automotive plants), transportation infrastructure, and public projects like airports.

The company recently completed an investment in robotics and automation at its Terrebonne plant that significantly improved ADF’s addressable revenue opportunity and ability to permanently fabricate higher volumes at a more profitable margin.

ADF Group may make a similar investment in its Great Falls, Montana plant, which would take roughly one year to complete.

Furthermore, the Infrastructure Investment and Jobs Act (IIJA) still has $300 billion to award through 2026.  Management continues to emphasize a strong growth cycle expected over the next three to five years.

Also, the long-term demand for infrastructure investment will continue well beyond the expiration of the IIJA bill.  Moreover, many companies are planning to invest in manufacturing facilities in the United States.  This includes TSMC’s $100 billion initiative to build five new factories in the U.S., Eli Lilly’s $27 billion investment in four new production facilities, and Apple’s plan to open a 250,000-square-foot server manufacturing plant in Houston.

Regarding tariffs, there could end up being exemptions on steel fabrication, given the impact on U.S. infrastructure projects. Even in a worst-case scenario, tariffs would only affect steel fabrication exports from the Terrebonne facility to the United States, which account for 40–50% of total revenues. Other revenue streams—such as design, construction, and installation—would remain unaffected.

Management has indicated that there is flexibility to shift some fabrication work from the Terrebonne plant in Quebec to the Great Falls facility in Montana, providing a way to avoid tariff impacts.

As for guidance, management continues to guide for higher revenues, which appears to be at odds for what the market is expecting. The pro-forma backlog now stands at ~$450 million, greater than where it was prior to the recent sell-off in the stock. More importantly, this reinforces management’s credibility around guidance.

The market cap is $135.63 million while enterprise value is $125.29 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 2.03
  • P/E = 3.42
  • P/B = 1.11
  • P/CF = 3.42
  • P/S = 0.57

These are exceptionally low metrics of cheapness.

Insider ownership is 13.2%, which is good.  ROE (return on equity) is 34.3%, which is excellent.  The Piotroski F_Score is terrific at 8.

Cash is $59.98 million while debt is $45.63 million.  And TL/TA is low at 45%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession, the stock could decline temporarily. That would be a buying opportunity.
  • Mid case: The current EV/EBITDA is 2.03, but should be at least 7. That would mean a fair value of $14.84 a share, which is 225% higher than today’s stock price of $4.55 a share.
  • High case: The P/E should be 15.  This translates into a share price of $19.96, which is over 335% higher than today’s stock price of $4.55 a share.

 

RISKS

• • There could be a bear market or a recession, although infrastructure spending looks solid over the next three to five years.
  • General tariffs by the U.S. against Canada, and specific tariffs by the U.S. against steel, may stay in place for some time. But tariffs would only affect steel fabrication exports from the Terrebonne facility to the United States, which account for 40–50% of total revenues. Other revenue streams—such as design, construction, and installation—would remain unaffected. Also, as noted, the company could shift some steel fabrication to its Great Falls, Montana, facility.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

April 20, 2025

I profiled Zoomd before, but the stock is significantly more undervalued today, so I decided to do this case study update.

Zoomd Technologies (ZOMD.V / ZMDTF) is an Israel-based digital advertising and monetization company that offers a mobile-first user acquisition platform powered by proprietary, patented technology. It provides advertisers with a unified dashboard connected to over 600 media sources and serves publishers as an onsite search engine. This unique position allows Zoomd to act as a one-stop shop for digital campaigns, helping advertisers target high-value users efficiently.

Zoomd’s platform sits atop the digital media ecosystem—integrated with social networks, device manufacturers, ad networks, and publishers—thus minimizing dependence on any single platform like Google or Facebook. With a strategic focus on high-growth sectors such as fintech, gaming, and e-commerce, Zoomd serves prominent clients like Sony Pictures, Crypto.com, and SHEIN, positioning itself as a scalable, privacy-proof solution in the evolving adtech landscape.

The market cap is $34.34 million while enterprise value is $28.67 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 2.48
  • P/E = 4.39
  • P/B = 1.97
  • P/CF = 4.47
  • P/S = 0.68

There are very low metrics of cheapness.

Insider ownership is 29.2%, which is very good.  ROE (return on equity) is 67.5%, which is excellent.  The Piotroski F_Score is good at 7.

Cash is $9.28 million while debt is $3.56 million.  And TL/TA is 38%, quite low.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession, the stock could decline temporarily. That would be a buying opportunity.
  • Mid case: The current P/E is 4.39 but should be at least 10. This translates into a share price of $0.80, which is over 125% higher than today’s stock price of $0.351.
  • High case: Arguably, the P/E should be 15.  This translates into a share price of $1.20, which is over 240% higher than today’s stock price of $0.351.

 

RISKS

• • Tariffs are weighing on the stock in the near term. But it’s likely that the U.S. and China will work out some sort of deal, at least in the medium term, which would lower tariffs significantly.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

April 13, 2025

Total Telcom Inc. (TTZ.V / TTLTF) is a Canadian microcap company providing remote asset management solutions through wireless technologies. With nearly 55% of its $3.37 million market cap in cash, no debt and solid profitability, the downside is limited. It has three main revenue streams—hardware sales, recurring communication services, and race-day equipment rentals—with total gross margins exceeding 60%. The recurring revenue business has reached break-even, and management expects further growth as new products are commercialized. The company’s real advantage lies in cost-effective, user-friendly integration of its technology, helping clients reduce manual labor, optimize operations, and manage assets remotely with low data usage and high reliability.

The business is capitalizing on emerging trends in satellite communications, environmental monitoring, and white-label partnerships. Management owns over 28% of the company and is aligned with shareholder interests through modest compensation and significant equity stakes. The company’s clean balance sheet and scalable business model position it well for future growth. With market demand rising for remote data solutions due to climate and infrastructure needs, and with satellite communication markets projected to quadruple by 2028, Total Telcom appears conservatively valued with limited downside and strong upside potential if growth accelerates through marketing and strategic partnerships.

The market cap is $3.37 million while enterprise value is $1.49 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 2.82
  • P/E = 15.58
  • P/B = 0.90
  • P/CF = 4.13
  • P/S = 2.35

Insider ownership is 28.8%, which is good.  ROE (return on equity) is 6.3%, which is low but should improve as the company’s earnings improve.  The Piotroski F_Score is decent at 6.

Cash is $3 million while debt is zero.  And TL/TA is 10.9%, exceptionally low.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession, the stock could decline temporarily. With 55% of the market cap in cash, no debt and solid profitability, the downside is limited.
  • Mid case: Net income could reach $500,000 in 2026 assuming $2.5 million in sales and a 20% net income margin. With a P/E of 15, the market cap would be $7.5 million.  This translates into a share price of $0.27, which is over 120% higher than today’s $0.12.
  • High case: With a P/E of 20, the market cap would be $10 million.  This translates into a share price of $0.36, which is almost 200% higher than today’s $0.12.

 

RISKS

• • Tariffs are weighing on the stock in the near term, but the company is looking to expand in places such as Canada, South America, Europe, and Australia. And as noted, with 55% of the market cap in cash, no debt and solid profitability, the downside is limited.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

April 6, 2025

Canaf Investments is a South African focused public company with four divisions:

Southern Coal – South Africa Southern Coal produces calcined anthracite, which is primarily sold as a substitute to coke in sintering processes.  Southern Coal supplies world leading steel and ferromanganese producers in South Africa.

Canaf Estate Holdings – South Africa Canaf Estate Holdings is a property investment company focused on acquiring, redeveloping and renting properties primarily within the suburbs of the old Johannesburg.

Canaf Agri – South Africa Canaf Agri is exploring investment opportunities in the agriculture sector in South Africa.

Canaf Capital – South Africa Canaf Capital is an investment company focused on providing capital for short-term financing to businesses and entrepreneurs in South Africa.

Of these four divisions, Sout Africa Southern Coal is by far the largest.

Canaf Investments is a tiny company engaged in boring businesses, thus the stock is completely overlooked by most investors.  But the stock is super cheap.

The market cap is $10.01 million while enterprise value is $3.16 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 1.11
  • P/E = 6.26
  • P/B = 1.52
  • P/CF = 2.37
  • P/S = 0.47

Canaf’s metrics of cheapness are exceptionally low.

Insider ownership is 17.6%, which is good.  ROE (return on equity) is 23.3%, which is excellent.

Cash is $8.5 million while debt is zero.  And TL/TA is 20.3%, low indeed.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession, the stock could decline temporarily. This would be a major buying opportunity.
  • Mid case: The current P/E is 6.26 but should be at least 12. That would mean the stock is worth $0.42, which is over 90% higher than today’s $0.22.
  • High case: Current EV/EBITDA is 1.11 but should be at least 7.  That would mean the stock is worth $0.59, which is 168% higher than today’s $0.22.

 

RISKS

• • As noted, if there’s a bear market or a recession, the stock could decline temporarily. This would be a major buying opportunity.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

March 23, 2025

In July 2024, I talked about Geodrill (GEO.TO / GEODF).  But Geodrill’s situation has significantly improved since then, so I am going to update the investment thesis.

Geodrill is a leading drilling services provider focused on gold (90%+ of revenue) and other mineral exploration for major, intermediate, and junior mining companies across Africa and South America. Founded in 1998 by CEO Dave Harper—who still owns over 40% of the company—Geodrill has grown organically from one rig in 1998 to 102 rigs today, with operations in six countries—Cote d’Ivoire, Senegal, and Mali in West Africa; Egypt in North Africa; and Peru and Chile in South America.

The company is known for its quality and long-standing relationships with top-tier clients like Barrick, Newmont, and Kinross. It has successfully shifted its customer base toward senior miners (now ~90% vs. 70% previously) and more stable jurisdictions, securing multi-year contracts worth ~$200 million, providing visibility through 2027.

With gold prices now exceeding $3,000/oz, miners are reinvesting heavily, benefiting Geodrill’s growth prospects. Harper is seeking a sale at 5x EV/EBITDA, valuing the stock at $4.13—more than double its current price of $2.02.

Geodrill reinvested every penny of operating cash flow into expanding their fleet in the most recent year.

On the most recent earnings call, CEO Dave Harper pointed out that the company has been growing on average about 10% a year over the last 8 years.  Harper said of course the company would encounter challenges—there are always challenges—but that growth should be at least 10% a year going forward (if not more, given gold prices over $3,000 an ounce).

Harper said, “We’ve never been more bullish, never been more bullish, never been more bullish.”

Harper notes that the company drills in locations where gold is heavily mined, where it’s relatively easy to mine, but where other people don’t want to mine.

Harper pointed out the company is “really going to shine over the next four years. This will become a cash cow, mark my words.”

The market cap is $94.8 million while enterprise value is $86.7 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 2.69
  • P/E = 8.03
  • P/B = 0.79
  • P/CF = 4.52
  • P/S = 0.67

Geodrill’s metrics of cheapness are exceptionally low.

The company is planning to pay a dividend again—likely $0.01 per quarter this year and a larger dividend in 2026.

As noted, CEO and founder Dave Harper owns 40%+ of the shares.  ROE (return on equity) is 7.9%.  This is a bit low but will move higher because margins should continue to improve, given high gold prices.

Cash is $19.5 million while debt is $11.4 million.  TL/TA is 26%, which is excellent.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession, the stock could decline temporarily. This would be a major buying opportunity.
  • Mid case: As noted, Dave Harper owns 40%+ of the shares and is looking to sell at 5x EV/EBITDA. This would mean a stock price of $4.13 per share, which is over 100% higher than today’s $2.02.
  • High case: EBITDA could reach $50 million by 2027.  At an EV/EBITDA of 6x, the stock would have an intrinsic value of $6.04, about 200% higher than today’s $2.02.

 

RISKS

• • As noted, if there’s a bear market or a recession, the stock could decline temporarily. This would be a major buying opportunity.
  • Gold prices may fall.
  • There could be political instability in Africa or in Peru/Chile. This has rarely been an issue for the company in the past.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

March 2, 2025

Pyxis Tankers (PXS) is a disciplined, growth-oriented shipping company with a modern eco-fleet that positions it for long-term success. With a focus on mid-sized, eco-efficient vessels, strategic chartering, and a strong financial foundation, the company is well-positioned to capitalize on opportunities in the shipping industry.

(1) Pyxis Tankers operates a fleet designed for versatility, low operating costs, and fuel efficiency. The company currently owns:

• • Three medium-range (MR) product tankers
  • 2.2 dry bulk carriers

This modern, eco-efficient fleet allows Pyxis to remain competitive while ensuring resilience in demand-driven markets. With significant liquidity (“dry powder”) available, the company is actively evaluating the acquisition of up to two additional vessels, further expanding its growth potential.

(2) Pyxis has cultivated long-standing relationships with top-tier global customers, ensuring stability and operational efficiency.

As of January 24th, 2025, the company has secured:

• • 72% of available days for Q1 2025 booked for MR tankers at an average TCE rate of $24,750/day
  • 68% of available days for bulkers booked at an average estimated TCE rate of $15,400/day

With five vessels under short-term time charters and one on a spot voyage, Pyxis Tankers is well-positioned to benefit from rising charter rates, should the market continue to strengthen.

(3) One of Pyxis Tankers’ key advantages is its lean cost structure, which creates operating leverage as charter rates increase. The company maintains:

• • A primarily fixed cost structure, enabling improved earnings potential
  • Highly competitive daily operational costs per vessel, compared to U.S.-listed peers
  • A solid balance sheet with strong liquidity and modest leverage

This disciplined financial management allows Pyxis to remain resilient even in volatile market conditions while continuing to pursue strategic growth opportunities.

(4) The company is led by a highly experienced and incentivized management team, boasting over 100 years of combined expertise in the shipping and capital markets sectors. Key leadership highlights include:

• • Founder & CEO holds ~57% of shares, aligning his interests with shareholders
  • A well-respected Board of Directors, consisting of industry veterans with deep sector knowledge

This level of expertise and leadership stability ensures that Pyxis remains agile, strategic, and disciplined in navigating market cycles.

(5) Despite ongoing market uncertainty, Pyxis Tankers is well-positioned due to constructive demand fundamentals for both the product tanker and dry bulk sectors. Key valuation drivers include:

• • Solid global GDP growth supporting shipping demand
  • Limited vessel supply growth, creating favorable industry dynamics
  • A proven track record of navigating volatile shipping markets

With compelling valuation metrics and a strong financial foundation, Pyxis presents a high-value investment opportunity with significant upside potential.

Pyxis Tankers’ combination of a modern, efficient fleet, strong customer relationships, disciplined financial management, and experienced leadership makes it a standout player in the shipping sector. With continued strategic growth and a focus on operational efficiency, PXS is well-positioned for long-term success in the dynamic global shipping market.

PXS’s market cap is $37.9 million, while its enterprise value is $81.9 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 1.74
  • P/E = 1.27
  • P/B = 0.37
  • P/CF = 2.71
  • P/S = 0.81

ROE (return on equity) is 36.6%, which is excellent.  However, earnings may decline in the short term.

The Piotroski F_Score is 6, which is decent.

Insider ownership is outstanding at 57%.  Cash is $42.4 million while debt is $86.4 million.  TL/TA (total liabilities / total assets) is decent at 44.5%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market and/or a recession, the stock could decline.  Also, the limited fleet size puts the company more at risk for any unforeseen maintenance or damages.
  • Mid case: Pyxis Tankers should have a P/CF of at least 5.  That would put the stock at $6.52, which is 85% higher than today’s $3.53.
  • High case: The company should trade at book value of $9.54.  That is 170% higher than today’s $3.53.

 

RISKS

There could be a bear market and/or a recession, during which shipping rates would likely fall leading to lower earnings and a lower stock price.

Limited fleet size puts the company more at risk for any unforeseen maintenance or damages.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

February 23, 2025

Core Molding is a manufacturer of injection molded plastics for a variety of products in different industries.  For example, dashboards, radio controls, bumpers, cup holders, truck stairs, snowmobile casings, decking, fencing, trash bins, and playground slides.

Roughly half of CMT’s revenue comes from trucking customers Navistar, Paccar, and Volvo where Core Molding manufactures bumpers, side panels, wind deflectors, and interior plastic components for these customers.  CMT has 5 large customers, each of which accounts for over 10% of their revenue.  But no single customer is over 20% of their revenue.

(h/t pcm983 of Value Investors Club.  See (you may have to register but it’s free): https://www.valueinvestorsclub.com/idea/CORE_MOLDING_TECHNOLOGIES/3525719676#description)

Core Molding runs its main facilities in Columbus, OH, and Matamoros, Mexico.  The company also has facilities in South Carolina, Minnesota, and Ontario.

CMT must maintain good relationships with its customers.  The large customers use just-in-time manufacturing.  Most orders come into CMT a few days before they are expected to be shipped or delivered to the client.  The finished product assemblers rely on many small- to mid-sized businesses to deliver goods quickly.  As a result, companies such as CMT tend to have their facilities close to the final product assembly factories.

In early 2018, CMT acquired Horizon Plastics but the acquisition was difficult to manage.  The CEO/Chairman who oversaw the acquisition left in late 2018 and the new CEO David Duvall took two years to fully integrate Horizon Plastics.

Management is highly transparent and approachable.  The CFO John Zimmer quickly replies to questions and is forthright about the company.  In its financial statements, CMT includes sales broken out by customer.

Core Moldings’s market cap is $118.8 million, while its enterprise value is $98.4 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 3.10
  • P/E = 7.62
  • P/B = 0.80
  • P/CF = 3.06
  • P/S = 0.37

These are low metrics of cheapness indeed.

ROE (return on equity) is 11%, which is OK.

The Piotroski F_Score is 6, which is decent.

Insider ownership is solid at 11%.  Cash is $42.6 million while debt is $24.3 million.  TL/TA (total liabilities / total assets) is excellent at 33%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market and/or a recession, the stock could decline.  Or if there’s a slowdown in trucking, CMT’s revenue and earnings could decline.
  • Mid case: Core Molding should have a P/E of at least 15.  That would put the stock at $26.10, which is over 95% higher than today’s $13.26.
  • High case: The company should have an EV/EBITDA ratio of at least 8.  That would put the stock price of $30.62, which is 130% higher than today’s $13.26.

RISKS

There could be a bear market and/or a recession and the stock could decline.

There could be a slowdown in trucking, which is cyclical.  The company gets roughly 50% of its revenues from truck manufacturers.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

February 16, 2025

Raymond Damadian is the founder of FONAR Corporation and he is one of the co-inventors of MRI technology.  The other co-inventor is Professor Paul Lauterber of Stony Brook University.  In the 1970s, they discovered how to use nuclear magnetic resonance technology—previously used in the chemistry lab to identify molecules—to form images of the internal tissues of the human body.  This was one of the great inventions in medicine.  Doctors rely heavily on the MRI exam to diagnose a wide variety of conditions, from brain and spine problems to organ problems to bone and ligament issues.

(h/t to anton613 of Value Investors Club.  See (you may have to register, but it’s free): https://www.valueinvestorsclub.com/idea/FONAR_CORP/5954105606)

Dr. Damadian also invented the FONAR Upright Multi Position MRI.  The Upright MRI produces images when a person is standing up or sitting (or anything in-between).  This means a more accurate diagnosis when examining things like the spine or the flow of cerebrospinal fluid—both of which appear differently when a person is standing up.  Also, a weight-bearing position is often the position in which a person experiences pain.

In 2011, Dr. Damadian used the FONAR Upright MRI to produce images of cerebrospinal fluid flow in eight MS patients.  The study demonstrated that leakage of cerebrospinal fluid may have caused brain lesions leading to MS.

There are many other conditions where the Upright MRI can provide a more accurate diagnosis, including abdominal prolapses, inguinal hernias, scoliosis, fallen cerebral tonsil disease, and Arnold-Chiari syndrome.

The MRI equipment business includes large manufacturers such as Hitachi, Siemens, General Electric, and Philips N.V.  It’s a highly competitive space.

The CEO of FONAR is Timothy Damadian, the founder’s son, who started working at the company in 1985 and worked his way up.  He became CEO in 2016.

FONAR was the first MRI company in the industry, introducing the world’s first commercial MRI in 1980.  FONAR’s business has two segments:

• • The medical equipment segment, which sells the Standup MRI.
  • The physician management and diagnostic services segment, which manages MRI scanners in New York and Florida. The bulk of the company’s revenues comes from this segment.  The company offers office space, repair and maintenance, medical record management, personnel management, IT services, management services, billing and collection, credentialism, compliance, and purchasing, among other things.

FONAR  introduced the Open MRI in 1980, the benefit being that the patient—who may be claustrophobic—does not have to be enclosed for the duration of the exam (30 to 60 minutes or longer).  Later on, the company invented the Upright MRI, which is even more useful.

Important Note: The demand for MRI scans continues to increase.

FONAR’s market cap is $104 million, while its enterprise value is $90.8 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 3.45
  • P/E = 11.61
  • P/B = 0.62
  • P/CF = 7.36
  • P/S = 1.03

Note:  The company is buying back stock, which is good because the stock appears materially undervalued with EV/EBITDA of 3.45 and P/B of 0.62.

ROE is 8.1%, which is low.

The Piotroski F_Score is 6, which is decent.

Insider ownership is low at 2.4%.  Cash is $54.3 million while debt is $41.2 million.  TL/TA (total liabilities / total assets) is excellent at 26.8%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market and/or a recession, the stock could decline.  If the reimbursement rates from Medicare decline, that could cause the stock to fall.
  • Mid case: FONAR should have a P/B ratio of at least 1.0.  That would put the stock at $26.21, which is over 60% higher than today’s $16.25.
  • High case: The company should have an EV/EBITDA ratio of at least 8.  That would put the stock at $37.68, which is 130% higher than today’s $16.25.

 

 RISKS

• • If there’s a bear market and/or a recession, the stock would probably decline.
  • If the reimbursement rates from Medicare decline, that could significantly lower earnings and thus the stock price.
  • Healthcare laws often change, and they could change in a way that adversely affects FONAR.
  • With its ownership of super-voting B and C shares, management controls the company without having a majority of the economic interest in the company.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

February 9, 2025

Build-A-Bear Workship (BBW) runs a “make-your-own stuffed animal” business and also licenses its brand.  The company is transitioning to being primarily a brand monetization business that continues also to be a retailer.

(h/t HiddenInSight, Value Investors Club.  Please see the following (you may have to register but its free): https://www.valueinvestorsclub.com/idea/BUILD-A-BEAR_WORKSHOP_INC/3416620533)

BBW’s licensed store business entails BBW licensing its brand and store concepts to third parties (theme parks, hotels, etc).  This business is a franchise model: BBW has zero capital commitment or operating risk, but has the same profit per unit for BBW as running a store themselves.  This business is expanding quickly.  It’s already exceeded 130 units and could more than triple by 2028.  Licensing/Franchising is 7.5% of today’s revenues but ~36% of profits.

There’s plenty of space for U.S. growth, but the international opportunity is even larger.  Over half of new third-party stores will be opened internationally including new partners in Colombia and France.  It’s also noteworthy that international partners are established toy/kid retailers whereas U.S. partners tend to be hospitality-based operators.  As a result, international partners are typically multi-unit operators whereas some U.S. partners are single-unit operators.

There have been zero third-party closures in 21+ months even as other licensed/franchised retail establishments have been seeing significant closures.  Also, the ROI for partners often exceeds 100%.

There are several reasons investors have overlooked Build-A-Bear:

• • Investors who invested in BBW at the Covid lows have seen 2500%+ gains already, and they assume the story is over
  • Licensed/franchised sales add little to total revenue, and so its earnings potential is overlooked
  • Build-A-Bear investors lost significant money in 2007 and again in 2015, and so they don’t look at the stock anymore and therefore don’t see the transformation

Because BBW is becoming primarily a licensing company, its earnings quality should continue to improve.  Investors are likely to realize this eventually, causing the stock to move much higher.

Because the company produces roughly $50 million in free cash flow per year, it will continue to buy back more stock, recently announcing a new $100 million buyback program (20% of the market cap).

Build-A-Bear has trademarks that legally prevent competitors from using a similar “build your own stuffed animal” retail concept.  As for other toy/entertainment options, customers seem to like BBW for the unique experience of building one’s own bear.  Also, the company has continued to sell ~8 million bears per year for over 25 years despite the collapse of mall foot traffic.

By 2028: Third-party stores may exceed 400, producing a net income of $52 million.  Meanwhile, retail net income should hit $30 million.  So net income for 2028 should be at least $82 million.  EBITDA should hit $126.3 million.  Cash flow will be roughly $105 million.

The current market cap is $526.4 million while enterprise value is $595.8 million.

And here are the metrics of cheapness based on 2028 estimates (except for P/B, which is current):

• • EV/EBITDA = 4.72
  • P/E = 6.42
  • P/B = 4.09
  • P/CF = 5.01
  • P/S = 0.81

ROE is 42.9%, which is excellent.

The Piotroski F_Score is 6, which is decent.

Insider ownership is OK at 6.2%.  Cash is $25.2 million while debt is $102.1 million.  TL/TA (total liabilities / total assets) is reasonable at 55.0%.  The dividend yield is 2.1%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession and/or if consumer spending declines and/or if there’s a decrease in mall traffic, earnings could drop and so could the stock.
  • Mid case: By 2028, Build-A-Bear should have a P/E of at least 15.  That would mean the stock is worth $88.36, which is over 130% higher than today’s $37.82.
  • High case: Arguably, by 2028, due to its capital-light licensing business, the company should have a P/E of 20.  That would mean the stock is worth $117.82, which is over 210% higher than today’s $37.82.

 

 RISKS

• • If there’s a bear market or a recession, the stock would probably decline.
  • A drop in consumer spending would cause earnings to drop.
  • Mall traffic continuing to decrease would hurt earnings.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.

February 2, 2025

Here is my investment thesis for InPlay Oil Corporation (ticker IPO in Canada and IPOOF in the U.S.), which is a Canadian oil and gas company based in Calgary, Alberta.

Their corporate strategy is as follows: “Disciplined light oil growth developing high rate of return assets to generate strong free adjusted funds flow with conservative leverage ratios while maximizing returns to shareholders.”

InPlay Oil has an excellent management team that has consistently delivered production and cash flow per share growth while reducing debt.  They have grown production at 15% a year the past 8 years and they have grown adjusted funds flow per share at 30% a year the past 8 years.  Furthermore, they have boosted reserves by 74% over the past 8 years.

Sustaining capital for 2025 is expected to be 25-30% less than 2024 because the company invested $20+ million in infrastructure the past 2 years.  The company also implemented strong hedge positions at favorable commodity prices to mitigate risk.

InPlay Oil is consistently more efficient (lower cost) than most of its peers in finding reserves and adding producing barrels.

The company also has a history of successful, highly accretive acquisitions.

The market cap is $105 million while enterprise value is $146.2 million.

Here are the metrics of cheapness:

• • EV/EBITDA = 2.94
  • P/E = 5.89
  • P/B = 0.51
  • P/CF = 1.70
  • P/S = 0.95

ROE is a bit low at 9.1%, but it’s improving.  The Piotroski F_Score is 7, which is good.

Insider ownership is 25.3%, which is excellent.  Debt is $40.4 million.  TL/TA (total liabilities to total assets) is 40%, which is solid.  The dividend yield is high at 10.1%.

Intrinsic value scenarios:

• • Low case: If there’s a bear market or a recession and/or if oil prices decline, the stock could decline.
  • Mid case: NAV based only on total proved reserves is $4.18 per share, which is 260% higher than the current stock price of $1.15 per share.
  • High case: P/CF is 1.70 but should be at least 8.00.  That would mean a stock price of $5.41, which is over 370% higher than today’s $1.15 per share.

 

RISKS

There could be a bear market or a recession and/or oil prices could decline.

 

BOOLE MICROCAP FUND

An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/

This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.

There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approachesintrinsic value sooner or an error has been discovered.

The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.

 

If you are interested in finding out more, please e-mail me or leave a comment.

My e-mail: [email protected]

 

 

 

Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.