Have you looked at Thermal Energy International? They are presenting next week. Can we get your thoughts?
Thanks for your review and shout out to my article on Paragon. The company where CEO Peter was chairman of the board and quickly went bankrupt is a yellow flag as is the cleaning up the balance sheet after getting rated as a going concern. The technology seems like a no brainer from everything I’ve read but I’m going to need to hear the right answers next week.
I like TMG but I dont love TMG. An OK company with great technology. Their execution has been OK, but not perfect with some previous goals that have taken longer than I expected. The thing I dont like is they havent been able to build larger/ longer contracts or any type of recurring revenue. So they have these cycles where they "invest for growth" with new hiring and higher expenses. Then get the growth for some nice looking earnings with margin expansion. Then they hit capacity constraints and need to hire more engineers meaning another round of higher expenses again. Every time they invest for growth there is some risk that the growth doesnt show up and expenses are just higher for longer. Now to be fair, I think they are in another upswing. So yes I think they are more interesting than they were 6 months ago as its obviously good to catch a somewhat cyclical company on an upswing, but I worry I would turn it into a 6 month trade where I am constantly worried about their backlog. So overall a good not great company, maybe on an upswing, lumpy as hell, and they really need shareholders with the patience to put in the research and then just kind of coffee can it, ignoring the up/down cycles. That can be a harder shareholder to find. If they could convince me they are finding ways to more consistently improve earnings quality (maybe a little more quickly) with less cycle risk and a stronger backlog - I would be happy to listen.
Have you looked at Thermal Energy International? They are presenting next week. Can we get your thoughts?
Thanks for your review and shout out to my article on Paragon. The company where CEO Peter was chairman of the board and quickly went bankrupt is a yellow flag as is the cleaning up the balance sheet after getting rated as a going concern. The technology seems like a no brainer from everything I’ve read but I’m going to need to hear the right answers next week.
I like TMG but I dont love TMG. An OK company with great technology. Their execution has been OK, but not perfect with some previous goals that have taken longer than I expected. The thing I dont like is they havent been able to build larger/ longer contracts or any type of recurring revenue. So they have these cycles where they "invest for growth" with new hiring and higher expenses. Then get the growth for some nice looking earnings with margin expansion. Then they hit capacity constraints and need to hire more engineers meaning another round of higher expenses again. Every time they invest for growth there is some risk that the growth doesnt show up and expenses are just higher for longer. Now to be fair, I think they are in another upswing. So yes I think they are more interesting than they were 6 months ago as its obviously good to catch a somewhat cyclical company on an upswing, but I worry I would turn it into a 6 month trade where I am constantly worried about their backlog. So overall a good not great company, maybe on an upswing, lumpy as hell, and they really need shareholders with the patience to put in the research and then just kind of coffee can it, ignoring the up/down cycles. That can be a harder shareholder to find. If they could convince me they are finding ways to more consistently improve earnings quality (maybe a little more quickly) with less cycle risk and a stronger backlog - I would be happy to listen.