Prescott Group Capital Management’s Top Picks For Q3

Prescott didn’t made any changes to its stake in Nature’s Sunshine Prod. (NASDAQ:NATR) during the second quarter. As of June 30, the fund continued to own over 1.86 million shares of the company valued at around $25.65 million. The company reported its second quarter earnings on August 10. EPS for the quarter came in at $0.12 on revenue of $81.2 million, compared to EPS of $0.22 on revenue of $92.8 million it reported for the same quarter last year. Excluding for the planned restructuring charges the company had to bear during the quarter, EPS for the second quarter was $0.19. On April 9, analysts at imperial capital initiated a coverage on the stock with an ‘In-line’ rating and a price target of $15. Nelson Obus‘ Wynnefield Capital, which held over 1.85 million shares of the company at the end of first quarter, has been continuously buying the company’s shares since May and according to its latest regulatory filing on July 27, owned 2 million shares of the company.

Moving on to Prescott’s third largest holding, Servicesource International Inc (NASDAQ:SREV). The fund bought 258,164 shares of the company during the second quarter and at the end of June held over 3.68 million shares worth $20.173 million. Shares of the cloud services provider saw a massive 76.45% rise during the April-June period fueled majorly by the company’s first quarter earnings beat in early May.  The company is currently embroiled in a lot of controversies, on July 14, Law offices of Howard G. Smith announced that it is investing claims of Servicesource International Inc (NASDAQ:SREV) and its officers’ possible violation of federal securities law on behalf of the company’s shareholders. This announcement came in a day after the law firm Levi & Korsinsky, LLP announced that it has commenced a class action lawsuit on behalf of Servicesource International Inc (NASDAQ:SREV) ‘s shareholders who purchased shares between January 22, 2014 and May 1, 2014. The company reported its second quarter earnings on August 6 which again came above analysts’ expectations. Although the company reported an EPS loss of $0.16, adjusted for restructuring costs and stock option expense the EPS loss was only $0.02. One of the most renowned hedge funds, Chuck Royce‘s Royce & Associates sold its entire stake of 199,061 shares of the company during the second quarter.

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