Big Bets with Only Average Conviction + Our Fourth Fireside Chat of 2025 [GeoWire Weekly No.194] | 🇺🇸 FTEK TGEN EBS PPIH SNYR FSI GLGI EACO MOJO

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This week’s Microcap Information Arbitrage Weekly Wrap-Up is ready — spotlighting key moves, missed signals, and overlooked opportunities in our 1,500+ coverage universe built since 2009.

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Last week, Emergent Biosolutions Inc. (NYSE:EBS) marked our 4th deep-dive company-focused fireside chat skull session of 2025. 

The average current and high returns of the previous 2025 company fireside chats are 20.78% and 102.46%, respectively. You can see all of our fireside chats with companies and investors, along with curated clips, by visiting Geoinvesting’s premium portal, here, and selecting the fireside chat filter.

In a conversation with EBS VP Frank Vargo, we dug into the biotech’s restructuring journey and why the pieces might finally be starting to come together. There are certainly aspects to the story that appear to be not fully understood by investors, which could be part of the reason the stock is significantly off its highs. There are some interesting moatish aspects of the story that could potentially justify a higher than average P/E. However, this is offset, to some degree, by some of the unpredictability in the company’s quarterly results due to timing of task orders related to contracts in the backlog

It was great to see a good amount of Geoinvesting subscribers show up to the event, prepared to ask great questions. Admittedly, this makes our team’s job a lot easier.

Emergent is a biopharmaceutical company that develops and manufactures vaccines and therapeutics focused on public health threats. Its core business includes medical countermeasures (MCMs) for biodefense—like anthrax, smallpox, and botulism vaccines—primarily sold to the U.S. government under long-term contracts. It also markets Narcan, a widely used opioid overdose reversal treatment. 

Before I get deeper into the EBS chat, I presented some fresh new thoughts on the conviction vs. downside tradeoff through the lens of two top-performing Data Center plays in our model portfolios, Fuel Tech, Inc. (NASDAQ:FTEK) vs. Tecogen Inc. (NYSE:TGEN). Actually, this perfectly sets the stage for our Fireside Chat with Emergent Biosolutions Inc. (NYSE:EBS). 

From there, we move through a string of names showing traction beneath the surface. Perma-pipe International Holding (NASDAQ:PPIH) quietly sharpens its data center positioning in a textbook case of info arb. Synergy Chc Corp. (NASDAQ:SNYR) lands meaningful retail distribution wins across the U.S. and Canada. Flexible Solutions International (NYSE:FSI) receives a major payment from a key customer — potentially a signal that a transformative contract is on schedule to deliver its first revenues. Greystone Logistics, Inc. (OTCQB:GLGI) completes its buyback and hints that more could be coming. Eaco Corp. (OOTC:EACO) delivers a blowout quarter, with aggressive salesforce expansion clearly paying off. And Equator Beverage Company (OTCQB:MOJO) hits record Q2 revenue, as it prepares for a 1-for-2 reverse split.

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First-Mover Advantage and the Glass Half Full

One of the key reasons I’ve had success in microcap investing is because I’ve never been afraid to move early, not because I’m necessarily better than the next investor. In fact, I’m just an average dude who likes turning over rocks, who isn’t afraid to take uncomfortable risks.

I don’t wait for the crowd, and I certainly don’t wait for every uncertainty to be de-risked. I like to strike before the herd notices. Sometimes that means having to be satisfied with being comfortable with partial information.

I’ve always approached investing with a glass-half-full mindset. Lots of investors, particularly microcap investors, take the opposite approach. They view every management team with suspicion and each company as “guilty until proven innocent.” And while that mindset can help avoid landmines, it can also keep you on the sidelines far too long, especially in microcap land, where perception gaps create the very mispricings we aim to exploit.

My approach has been to trust selectively. I’m not saying I blindly believe every CEO or jump on every turnaround. 

But over time, if you develop a process that puts you in a pool of companies where management teams are more likely to be credible and where upside potential far outweighs the downside, you can substantially improve your odds of success. I use a 10-point quality checklist.

Don’t get me wrong, being a first mover has also been why I’ve taken some really big losses.

However, if your process gets you to a 50% success rate, you don’t need to be perfect. The multibagger wins will make up for the early, imperfect calls. If you start betting 70% or more, things start getting really special.

This willingness to get in before the market is a first-mover advantage I’ve used again and again. It doesn’t always work, but it works often enough to matter. 

Now, please don’t take my first mover mantra out of context. You’ve heard me talk about how I’ve seen value in momentum investing. By definition that means the crowd may be arriving. You might see this as counter to what I’m saying in this post. However, if you know me, I’ve always stated that there are many ways to structure a portfolio. Making some “before the 52-week new high” crowd picks is just one of many strategies I use to make investing fun.

Now let’s look at the first mover advantage decision from the lens of conviction.

The Tradeoff: Conviction vs. Downside Protection

Let me give you a real-world illustration.

Imagine two stocks:

• Stock A: A pretty average business. No real edge. But the stock is trading near cash and tangible book value. So, your downside risk is limited. You’re not excited, but they catch a break, like a rising tide lifts all boats industry tailwinds shift. Let’s also assume that the product was already used in this industry a few years ago when the industry use case wasn’t as hot, so the use case didn’t really gain momentum. 
• Stock B: A much more exciting product line-up. A high-conviction business model with a clear, proven, and differentiated product that could be used in a new industry, but where it has not been “sold into” yet. So, there’s product acceptance risk. The company also has a weaker balance sheet with downside risk that’s not clear.

Now let’s say both companies are waiting on contract wins that could dramatically change their trajectories.

What do you do?

Well, this actually happened. Stock A is FTEK. Stock B is TGEN. As you know, through our research that we have been sharing, they are now both positioned to potentially materially benefit from data center growth tailwinds.

Even though I have a higher conviction in TGEN’s products and long-term potential, I took a bigger out of the gate position in FTEK, compared to nimbly building a substantial position in TGEN. 

Why?

Because of the downside clarity.

At around $1.50, FTEK was trading near cash and tangible book. If things didn’t work out, I had a cushion. When TGEN was under $1.00, I had less visibility on what “wrong” would look like. So, even though TGEN upside felt stronger, and potentially more sustainable, due to the competitive positioning of its data center product, the downside was less defined. Furthermore, with FTEK, as we reported, the company already proved that it can win a data center project with a hyper scaler back in 2018.

Sometimes conviction isn’t just about how good something could be. It’s also about how bad it won’t get. It’s not often that you get the opportunity to make bets in microcap land, where you know your downside.

So sometimes, the bigger bet isn’t the one with the better story, it’s the one with the clearer floor.

And that’s why being a first mover doesn’t mean being reckless. It depends on the situation. I would suggest that instead of asking yourself: “Should I or should I not take a position?”… size your bets according to the information. Don’t get scared from taking some kind of position in a stock where you see some amazing gains potential if things work out.

That brings us to Emergent Biosolutions Inc. (NYSE:EBS), another name where uncertainty still looms, but where some pieces might just be starting to come together, to at least lead to a re-rating of the stock’s low valuation that has probably been exacerbated by investors misunderstanding the company’s vaccine business. This scenario is set-up due to government Fear, Uncertainty & Doubt (FUD) comments around vaccines, notably, Robert F Kennedy Jr.

Time to see if we can deliver some FUD-buster perspectives…

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The Weekly Wrap-Up is meant for those in a hurry, along with those who want to spend a weekend hunting for ideas or quickly catch up what we talked about during the week. Our Weekly Wrap-Up brings together everything we discussed during the week in our morning emails and premium alerts, as well as new information and high conviction ideas that we did not communicate that you should know about. From earnings coverage, new research coverage on stocks, picks and research from our subscribers to event highlights from our monthly open forum that takes place to the beginning of each month and interviews with management teams and investors. Missed any emails this week? You can catch up on all of them in one place — just check out the full archive here.

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Inside the Turnaround: EBS Fireside Chat with Frank Vargo

This week, we sat down with Frank Vargo, VP and Assistant Treasurer of Emergent Biosolutions Inc. (NYSE:EBS) (Emergent BioSolutions), to dig into what’s shaping up an intriguing turnaround story in the microcap biotech space. The conversation focused on whether this once COVID-era highflier, now trading under $7, is still stuck in “value trap” territory—or beginning to find real footing.

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GeoInvesting is a premier research platform for microcap investors, dedicated to uncovering high-potential stock ideas in undervalued companies across various sectors. With over 30 years of investing experience, GeoInvesting has covered more than 1,500 equities, providing often actionable proprietary research. The platform has been instrumental in identifying 200+ multibagger stocks, and offers investors exclusive access to over 600 management interview clips, allowing for deeper due diligence and understanding of the microcap stocks, many of which make it to market-beating premium Model Portfolios. Join the GeoInvesting community for the best stock research and microcap insights to help you stay ahead in the market. To learn more about our Premium Services, go here.. (https://geoinvesting.com/premium-research/)

The post Big Bets with Only Average Conviction + Our Fourth Fireside Chat of 2025 [GeoWire Weekly No.194] | 🇺🇸 FTEK TGEN EBS PPIH SNYR FSI GLGI EACO MOJO appeared first on GeoInvesting.

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