Solitron Devices Stock: A Future 10-Bagger - $SODI

[@SpecialKatz]

Tray, I've watched this video a number of times over the last few months. I promised myself I'd come back to it closer to October 2024 to see how your thesis played out. You don't need me to say it but I will anyway. You nailed it Sir! The numbers reflect your breakdown. Q3 and Q4 2024 show rev of $4 million and Q1 2025 $3.97 million. The only thing that hasn't changed much is the multiple. Still trading around 5 to 6 times but that's okay for people like me who've become new shareholders and adding to their positions. Thank you for your work and sharing your knowledge. If it isn't too much trouble, I'd love to hear your thoughts on SODI now as against 12 months ago and then again in twelve months down the track. Let the people have what they want Tray and drop another SODI video! Good day Sir!

[@DIYInvesting]

That’s a good idea to do an update video now that we have six months of results post acquisitions. Fortunately, it’s worked out well

[@ChrisJaeger97]

Hey Trey, appreciate the breakdown on this company. I agree that this is a really interesting time for their business, but I'm concerned about the risks. Similar to Micro Engineering's customer concentration, I'd be curious to hear your thoughts on Solitron's customer base, and if they truly have a moat relative to the competition. Per the most recent 10-K, Raytheon alone accounts for 50% of their revenues, and they list large-scale and strong competitors like Infineon and Microchip. Furthermore, the 2021 shareholder meeting highlighted an "apology tour" to their existing customers, which makes me concerned that Raytheon has the option to pull the plug at any minute, especially since these transistor products aren't highly differentiated. How do you approach these risks?

[@DIYInvesting]

I’m comfortable with Solitron’s customer base because at the end of the day they really have one key customer: The US government. So yes Raytheon is a huge portion of sales but at the end of the day the end customer is the government there. There is very little actual customer competition because when an order comes into Raytheon from the government it’s passed onto the subcontractor who owns supplies for that program. It’s very difficult to win (or lose) those program contracts once you’ve won the upfront inclusion. I’ve found that defense companies are very stable for that reason and is a large reason they’re high quality companies. It would not be *easy* to simply replace Solitron as a supplier into these programs. It can happen, but it would likely be more difficult than you would expect for a normal B2B or consumer sales product.

[@davidkoba]

Love this deep dive. Especially in a smaller company. Good find.

[@DIYInvesting]

Glad you enjoyed it!

[@michaelfriend3990]

Very surprised this is your largest holding. Never heard you acknowledge any companies. Nice video.

[@DIYInvesting]

Thank you. Anything in particular for why it is surprising?

[@brotherleo4090]

​Hi Trey. I thought u said before ur largest holding was Trux

[@masteryoda499macht9]

Great find, Trey! How do you find micro-cap companies like $SODI. Do you use a screener or are they recommended by the community? I am very interested in the process.

[@th3g3ntl3man_6]

Already in 2000 the company appears to have had 2 mio shares outstanding, this would imply they went public with a market cap of roughly 1 mio dollars (?!). Could you please share why this company is public in the first place?

[@DIYInvesting]

The company had a bankruptcy in the past. This used to be a much larger company pre-bankruptcy, but they also faced some post-bankruptcy liabilities which have since been resolved, but I believe that impacted things as well. So I believe there was a recapitalization in the past at some point. I'm not an expert in any of that history as I've only been involved as a shareholder since 2020. Really, I've mainly focused on studying the business since new management took over which I believe was in 2016.

[@HugoOrnelas-lr2oz]

Going to watch it for learning purposes But as an OTC company dont have the possibility to buy it at my european broker account

[@DIYInvesting]

I hope you find it useful for learning purposes then. Always open to feedback once you're done on my overall thesis. We can only learn from practice and discussion on our ideas.

[@brotherleo4090]

Trey, so you are not on quickfs, anymore? Your largest holding is not Trux anymore?

[@DIYInvesting]

Don’t know where you’re getting your information. I’m still using QuickFS and TRUX has never been my largest holding

[@mr.siddharthtyagi]

For learning purposes, I'm gonna add the video to my watchlist but I'm a regular viewer and something about the first 2 mins sounds too fishy. He previously said he will never discuss his holdings as some are quite illiquid and talking about them can pump them up artificially. He refused to reveal his banking holding in the video on Discover Financial services. I liked that. It was genuine. But i now wonder if this channel is hacked? Or is this an AI generated video. Bcoz he never talks that way. Knowing him, he will never post a thumbnail of a hot defense stock with a title - a future multibagger. He is a value investor. I'm just highly concerned it might be a hacked video. And i confess i stopped watching after 2 mins to express my concern. Viewers also notice that the audio quality is broken. It could be AI generative.

[@DIYInvesting]

Watch it or not, it’s not a hacked video. Solitron has been for some time the only holding of mine I’ve discussed publicly. In large part because my position was large enough that I really didn’t consider adding to it further. And it’s proven to be a great example of how my process works as a value + quality + capital allocation investor.

[@mr.siddharthtyagi]

​@@DIYInvestingyour process has shaped my own process to go about investing. I've gone through your entire playlist of watchlist s&p 500 stocks, only because im not an american, still i have the option of direct US stock picking and those were the names i could recognise a bit. It could be a wrong assumption on my part and stems from too many alarm bells going off the moment i came across this video. I'm still gonna keep watching your channel. 👍

[@DIYInvesting]

Fair enough. This company is much smaller than those S&P 500 stocks and perhaps will highlight some of those differences of why I focus on Micro-Cap instead of Large-Cap stocks.