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ThirdPoint Research - The Latest Small Cap Research Ideas

This site contains important information that will make you a better small cap investor. We offer investors free access to our professional research and analysis on potentially undervalued small cap stocks. Be sure to check in often for our latest research.

Our Latest Research News

ThirdPoint Research Releases New Research on WTER, IDEA, SIBE, OWOO, and NVLX

ThirdPoint Research, LLC has released new research on several new small capitalization companies that may be poised for significant growth. The first is The Alkaline Water Company (OTCQB:WTER), which is a small publicly traded company marketing high alkaline water to consumers. Revenue growth is fantastic with the Company coming off a blow out September quarter. We are expecting more revenue growth over coming periods and we are watching for distribution related news. We love to see small companies hit the big time relative to revenue production and WTER is right on track!

We have also begun writing on INVENT Ventures, Inc., which trades on the over-the-counter market as OTCQB:IDEA. As of the end of the March quarter, stated net asset value per share was $0.14. Currently, shares trade at $0.23, which indicates that investors believe the portfolio is worth far more than the carried net asset value per share. Our recalculated estimated fair value for the shares is $0.42.

ThirdPoint Research, LLC has also recently released new research on three small capitalization companies that are poised for significant growth. Siblings Group Holdings, Inc. (OTCQB:SIBE) is an education technology and management company targeting the very fast-growing K-12 and higher education technology markets, which are expected to reach approximately $345 billion worldwide by the year 2019, with certain subsectors of this market expected to grow at up to 23% CAGR through the year 2017. The report outlines a target price for the shares of $0.50 based on the expectation of the Company completing acquisitions and product introductions over the short term, which are expected to drive almost immediate revenue growth.

ThirdPoint Research, LLC has also initiated research on The Alkaline Water Company (OTCQB:WTER) and Nuvilex, Inc (OTCQB:NVLX). The Alkaline Water Company is being outlined due to the steep revenue ramp, which is being driven by the very rapid product uptake by major retailers and due to the Company's plans to significantly increase production capabilities to meet the growing demand. With a market capitalization of only $15 million, the research outlines there is likely significant upside to the price of the shares as revenues continue to build.

According to the American Cancer Society, the rate of pancreatic cancer has been slowly increasing for the past 15 years and by 2030 is expected to be one of the top cancer killers. ThirdPoint’s research outlines the strong position Nuvilex may hold relative to its treatments based on proprietary cellulose-based live-cell encapsulation technology, called Cell-in-a-Box. With demand for new pancreatic cancer treatments skyrocketing and recent FDA approvals in the space, NVLX looks especially well positioned as it prepares to begin late stage clinical trials. Over the coming weeks, ThirdPoint is expecting to expand its research on both WTER and NVLX.

These research reports are included in links within this website.

Our Favorite Trading Ideas

Closely Watching Events at The Alkaline Water Company (WTER)

The Alkaline Water Company (WTER) has been especially impressive over the past few weeks. Distribution is growing very quickly, which is driving an impressive revenue ramp. An institutional financing round was just completed giving the WTER capital to significantly expand production to meet the fast-growing demand for the companies high alkaline water products. This is one to watch! - We are in the process of completing a full research report on the Company. Please check back with us later to get our thoughts on this fast-growing operation.

News Watch on Sibling Group, Inc. (SIBE)

We have been closely watching events at Sibling Group (SIBE) as it appears the company is close to closing its first major acquisition. We are expecting the shares to rise significantly on any announcement. Stay Tuned!!! If this deal closes, we think these shares will more much higher.

Why Calpian (CLPI) is Worth $13.00 Per Share - It is About Income Statement Consolidation

We have been closely watching events at Calpian (CLPI) - In this report we explain why these share are a steal at current prices, especially once consolidation of the financials of the Indian Money on Mobile unit occurs. This is a solid company with strong management.We expect this company to continue to grow this year and next.

We are on FDA Clearance watch for Advanced Medical Isotopes (ADMD) - Watch this one Closely

Advanced Medical Isotope Corporation (OTCQB:ADMD) has filed pre-market notification to the FDA for its Yttrium-90 (Y-90) RadioGel brachytherapy cancer treatment, which utilizes a re-absorbable, biodegradable polymer rather than titanium metal seeds. We believe odds of FDA clearance are above 75%.

Latest Reports

Full Report on The Alkaline Water Company (WTER) - You Want Growth in a Small Cap...Well Here it is BIG TIME

We love to see small cap companies make it in the market place and that is what The Alkaline Water Company is doing. We rarely see companies growth this quickly. Distribution channels are growing on a weekly basis and the Company is posting impressive revenue numbers to the board. We are expecting more blowout revenue quarters in the future.

Full Report on INVENT Ventures, Inc. - Undervaluing Assets? - We Think So!

Today we published a new research report on INVENT Ventures, Inc., which trades on the over-the-counter market under the symbol "IDEA". As of the end of the March quarter, stated net asset value per share was $0.14. Currently, shares trade at $0.23, which indicates that investors believe the portfolio is worth far more than the carried net asset value per share. Our recalculated estimated fair value for the shares is $0.42.

Full Report on One World Holdings, Inc. (OWOO) - We are Watching for Distribution Related News

Today we published new research report on One World Holdings, Inc., which trades on the over-the-counter market under the symbol "OWOO", which is a small publically traded company marketing an ethnically diverse product line of dolls targeting the very fast-growing and significantly sized nonwhite demographic in United States. We are watching for distribution related news.

Full Report on Sibling Group, Inc. (SIBE) - We are Watching for Acquisition News

Today we published an extensive research report on Sibling Group, Inc. The company is a process of doing a rollup of the educational technology sector. We think this is a stock to watch moving forward. Upon this first acquisition being completed, we would expect the shares to move up significantly. This is a fast growing market and SIBE appears well positioned.

Full Report on Advanced Medical Isotopes (ADMD - We are on FDA Clearance Watch!

We believe the Company is on the verge of a major product introduction into the brachytherapy cancer treatment market. We view the Y-90 RadioGel™ device and the other Y-90 products as compelling hybrids between the legacy low dose rate products that utilize permanent seeds for the treatment of prostate cancer and the high dose rate therapies that are gaining in popularity. If this company gets FDA clearance this shares will move a lot higher.

Calpian, Inc. Fast Grower in International Payments - Executive Summary

We continue to be very excited about Calpian, Inc. This fast growing company has yet to be discovered by most investors. When it does, we think the shares will soar

Calpian (CLPI) Fast Growing International Mobile Payment Player

Our Top Trading Points for CLPI - With Hype Growth in Mobile Payments this Undiscovered Story is Due for a Coming Out Party - Way Undervalued

The Bottom Line on ADMD - Do You Buy it, Hold it or Sell it?

Over the coming weeks we will be watching for two events, news relative to FDA clearance and news relative to fundraising activities. Should we get positive relative to either event, we would expect the shares to trade considerably higher.

SIBLING GROUP, INC, – PLAYING DISRUPTION IN EDUCATIONAL TECH

SIBLING GROUP, INC, – PLAYING DISRUPTION IN EDUCATIONAL TECH

Sibling Group

Sibling Group, Inc. (SIBE)

• Sibling Group Holdings, Inc., which trades on the OTC market under the symbol “SIBE” is an education technology and education management company targeting the rapidly changing K-12 and higher education markets, in addition to the large and fast growing corporate training sector.

• The educational technology sector is growing quickly driven by demographic and economic factors and the rapid advancement of digital technologies and is expected to reach approximately $345 billion worldwide by the year 2019, within certain subsectors of this market expected to grow at up to 23% CAGR through the year 2017.

• While there is significant change in higher education, there is equally robust change within the K-12 sector. The implementation of Common Core State Standards and innovative teaching methodologies is driving a massive technology upgrade cycle within the K-12 segment.

• Investment is pouring into the educational technology sector as both venture firms and corporations chase the huge growth. SIBE’s strategy is to act as a consolidator acquiring, on an accretive basis, some of the smaller, but still successful, market players while at the same time driving revenue growth through internally developed products and services.

• The company has already announced its first meaningful acquisition, which is involved in the fast growing blended learning environment. We are expecting this acquisition to close by the end of the June quarter. Upon closing, we expect the company to scale up through combined sales and marketing teams and cross-selling into the customer bases of other portfolio companies. We believe additional accretive acquisitions are being negotiated and are likely to be announced over the short-term.

• We believe investors will be able to justify the current share price based on the successful closing of this first acquisition alone. We are expecting additional accretive acquisitions to be announced over the short-term, which we believe will further drive shareholder value.

• Our target price on these shares is $0.50 upon completion of announced acquisitions and product introductions.

Executive Summary – Sibling Group (SIBE) and the Educational Technology Market

Moderately risk-averse investors should be watching closely for developments at this company as its acquisition strategy seems to be gaining traction. We are expecting the company’s first acquisition to close over the very short-term and it appears additional accretive acquisitions are close at hand.

Sibling Group Holdings, Inc., (OTCBB:SIBE) headquartered in Atlanta Georgia, is an education technology and education management company targeting the rapidly changing K-12 and higher educations markets, in addition to the large and fast growing corporate training sector. The company is fully compliant and current in its reporting with the U.S. Securities and Exchange Commission and trades on the over-the-counter market under the symbol “SIBE”.

While there are robust opportunities within the market for management of educational institutions, we believe the company’s opportunity relative to the educational technology marketplace is far larger. The educational technology sector is growing quickly and is expected to reach approximately $345 billion worldwide by the year 2019, with certain subsectors of this market expected to grow at up to 23% CAGR through the year 2017.

The educational markets within the United States are currently experiencing profound change. The cost of college attendance has skyrocketed 27% beyond the rate of inflation over the past five years. The cost of college attendance at a private institution is now on average well over $30,000 per year and while the rate of tuition increases has slowed, these increases are still significantly outpacing inflation. While it is expensive to attend college in the United States, it is even more expensive not to attend college as the disparity in wages between the college educated and the non-college educated continues to widen. The desire for a university education combined with the high cost has driven many students and parents into significant debt as student loans are used to plug the gap between what parents can afford the expenses students are incurring.

The high cost of college tuition is causing many students and parents to rethink the traditional college education, which has resulted, along with other factors, in rather significant drops in college admissions over the past few years. The changing degree emphasis away for liberal arts, along with changing demographics, are threatening the very existence of many of the smaller universities. These factors combined with rapid changes in technology and in the methodologies students use to access these technologies and communicate within society are causing severe disruptions within the traditional technology environment of universities.

While there is significant change in higher education, there is equally robust change within the K-12 sector. The implementation of Common Core State Standards and the desire to integrate new learning approaches are not only forcing a radical change in teaching methodologies, but are also are straining the antiquated technology fabric of K-12 institutions.

As these demographic, economic and technological changes are forced upon educational institutions, a significant transformation in the educational environment is taking place. Mass adoption of new technologies is occurring, which is creating significant opportunities for educational-oriented technology companies and for the investors who finance these operations. Online learning, and enhancements to this evolutionary technology, such as blended learning and Massive Open Online Courses (MOOCs), along with student’s desires to fully integrate their personal communication devices into the academic environment are driving further changes in the information technology and communications landscapes within the educational market.

The venture capital community and large public and private companies have responded to the strong market opportunity that has resulted from the disruption of the technology fabric within the educational market. M&A activity within the educational technology sector is very strong as is the level of venture capital investment. With the strong level of venture capital activity and other investments that have created hundreds of new entrants into the educational technology space, we believe it is clear there will be many companies within the sector that over the next few years will be starving for liquidity events.

We believe the many changes in the educational technology marketplace and the proliferation of new entrants into the sector creates a strong opportunity for a company, such as Sibling Holdings Group, Inc., to act as a consolidator acquiring, on an accretive basis, some of the smaller, but still successful players. This is the strategy SIBE’s management team seeks to implement over the coming few years. It appears the company is poised to soon close its first significant acquisition and it appears the announcement of additional accretive acquisitions is forthcoming.

While the educational technology market relative to K-12 and higher learning institutions offers a significant opportunity for the company, additional extremely strong revenue opportunities exist relative to the corporate training market. As the U.S. economy has improved, medium and large corporations are again spending on corporate training. Last year, corporate training grew by over 15% after seeing increases during the previous year of 10%. The company has clearly stated its intentions to target this very large and fast-growing sector of the educational market.

As is explained in more detail in this report, we have established a near-term price target of $0.50 for these shares. We believe, however, this could very likely prove to be too conservative as it appears additional accretive acquisitions have been identified. Additionally, the company is in process of responding to several major RFPs. Success relative to either acquisitions or landing portions of this new business will likely propel these shares well beyond our price target.

While the company’s strategy is not without risks, we believe the opportunity is vast and if properly managed, the company, its experienced management team and the company’s investors could see considerable success.

Capital Structure and Other Items

The company had has approximately 39,000,000 common shares outstanding and no preferred stock outstanding. Based on the share count and the recent closing price of the common shares, market capitalization is approximately $4 million. The company’s debt is at about $350,000. We do not view this debt level as being problematic relative to the management team executing its acquisition and rollup strategy with in the EdTech and education management sectors.

Management has done an adequate job in maintaining regulatory compliance with the Securities & Exchange Commission. As of date of publication, the last filing was on Form 10-K, which reported results for the year end December 31, 2013. The company has also continued to file periodic 8-Ks to keep investors informed of events relating to acquisitions and equity compensation.

We found it interesting, and worth noting here, the management has granted itself and no compensation in the form of stock options, but instead has relied on straight restricted common share equity compensation. We believe this increases confidence among investors that they will be able to adequately determine true outstanding share counts in order to more fully comprehend the real market capitalization of the organization.

Valuing Sibling Group Holdings, Inc.

Valuation analysis of Sibling Group Holdings, Inc. is difficult due to the company still being pre-revenue. Recent mergers and acquisition activity with in the educational technology space does, however provide us with some parameters to make estimations. For example, recent acquisitions in the space have gone for about 1.5 times current year revenues. The company is expecting to close the Blendedschools.net acquisition by the end of the June 2014 and has indicated this company is currently producing approximately $3 million per year in revenues.

We would expect this management team to likely increase revenues for the next 12 month period by at least 50%, which would yield revenues of approximately $4.5 million on an annualized basis. Applying the 1.5 times revenue multiplier yields us an approximate market value on the acquired business alone of approximately $7 million, or approximately $0.22 per share.

As we indicated above, we would view a 50% increase in the newly acquired business to be an initial conservative estimation. Due to very heavy RFP activity within the sector a substantial amount of business will be rewarded to companies like SIBE. Should the company land a few of these deals, we could easily see revenue growth of 5X to 10X, which would significantly propel the price of the shares.

The value of the fully reporting company alone without any business and the other developing assets and products would lead us to theorize an additional $5 million of market capitalization, which when combined with the valuation discussed above relative to the new acquisition could give us a minimum stock price of approximately $0.35 a share. On top of this amount, we would need to consider the strong likelihood of the company completing additional accretive industry acquisitions, which would likely consist of high-growth companies in a highly valued market sector.

Therefore, we could easily justify paying approximately $0.50 per share upon the closing of the Blendedschools.net acquisition, and thus this would be our price target over the next few months. However, as we explained above, we believe this is a rather conservative forecast and if the company should land even a small portion of the deals that are coming up in the marketplace, we would likely see a significantly higher price for the shares.

As we indicated above, we believe there will be many companies within the educational technology marketplace that enjoy at least marginal success, but will be unlikely to realize a liquidity event. We believe such companies will be excellent acquisition candidates for SIBE.

By carefully selecting companies that will provide synergies with other products and companies already within the company portfolio, we believe there is a very strong possibility of substantial revenue growth over the next few years.

This would lead us to believe shares could easily be worth significantly more than $0.50 over the coming months, especially if even a small portion of the $30 million of new business on which the company will bid is won.

Top Risk Factors to our Theoretical Valuations

The company’s filings with the Securities & Exchange Commission do an excellent job in outlining all of the possible risk factors associated with this company. We believe the most significant short-term risk factor relates to the closing of the already announced acquisition of Blendedschools.net, which as the company has indicated is expected by the end of the June 2014. We believe a significant portion of the current evaluation is based on the expectation this deal will close.

We also view the company’s current level of cash as a risk factor. Should the company been unable to raise cash over the next few months, it may be difficult for it to maintain SEC compliance and meet normal cash overhead expenses. We suspect, however, that management team members or board members will step up to fund the company until additional acquisitions can be made and until the company begins to produce revenues, which will hopefull enhance working capital levels. There considerable funds being injected into the EdTech market sector and we see no reason why this management team could not secure adequate funding for operations via some of these providers. This, of course, would lead to some level of shareholder dilution, but properly managed at a decent valuation, this could be a possible fundraising avenue for the company.

Other risks,in our opinion, mainly relate to the competitive environment as competition in the space is intense. Additionally, customers in the educational space are often difficult to manage and predict because often times they do not have a profit minded agenda, but instead are sometimes mainly concerned with providing a quality education to students. This management team, however, is very experienced in the sector and we would expect them to be able to mitigate these risks.

Conclusion – Is Sibling Group, Inc. (SIBE) a Buy or a Sell?

We believe Sibling Group Holdings, Inc. has a strong opportunity to successfully complete a rollup of various assets and companies within the educational technology marketplace.

Moderately risk-averse investors should be watching closely for developments at this company as its acquisition strategy seems to be gaining traction. We are expecting the company’s first acquisition to close over the very short-term and it appears additional accretive acquisitions are close at hand.

Significant sums of money are being invested into this sector and revenue growth is very robust. The industry is experiencing significant changes due to strong technology shifts, demographic changes and the introduction of new teaching methodologies.  In our opinion, the significant upheaval in the marketplace creates strong opportunities for savvy management teams to expand business operations.    If this management team properly manages this process we believe there is an excellent opportunity in front of this company.

Purchasing these shares, however, is certainly not without risk for the reasons we outlined above, but we believe the current stock price is justifiable alone by the closing of the acquisition of Blendedschools.net.

We believe there is significant upside to the share price as the company moves the internally developed products and initiatives into the marketplace and as additional accretive acquisitions are completed.

For a copy of the full report please click here:

SIBE REPORT MAY 20, 2014

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