Monday, August 11, 2014

Opinion-Can Advanced Photonix (API) finally get to profitability?





My Note: Advanced Photonix (API) releases it's quarterly results today after the market closes, and there is a conference call scheduled. The stock is currently trading at an abysmal price of .48 per share as of the close on Friday, August 8th. 

David Kang of B. Riley,  is the only analyst who currently follows API and is predicting a one-cent loss but with profitability right around the corner. (See chart below).

Those of us who invested in API based upon the promise of THz have learned the hard realities of investing in a virgin technology, as actual sales of THz into the industrial market have been few and far between. API which has made an increasing number of sales in the recent past, has been required to force open every door, in order to make a sale because frankly it's a long road from deploying a sensitive THz device in a laboratory to a rugged factory floor where any such device must often be usable  on a 24 hour a day factory- line, and  in challenging conditions where reliability is a must. Having proven it's reliability for several years now in those factory settings, it's time to take a fresh look at API as an investment that appears to have real legs.

The Garner hype cycle was a concept I was unaware in 2005, when API acquired Picometrix, and it's THz technology. It's seems pretty evident to me now in hind-sight, that when API announced sales of it's QA1000, to NASA (circa, 2005), to inspect foam on the hydrogen tanks the Space shuttle booster, that I was caught up in the hype cycle's - "Peak of Inflated Expectations."  Correspondingly most investors today appear to be clearly languishing in the "Trough of Disillusionment", and the pps reflects the generally negative view of the investment community in API.


However, in my opinion API, appears to be turning the corner, and is establishing a real niche-market for THz in the industrial process control market by not only  replacing nuclear gauges with it's T-gauge but in using this factory hardened application for process control in a wide variety of market settings and uses. The potential market in the diverse fields API is deploying this technology is huge, but it's going to take time before investors see the real scope of the potential. 
Thankfully, API's primary source of income, to support the development of it's Teraherz market,  is coming from sales of  it's high speed optical receivers (HSOR), and it's commanding lead in the 100gig, HSOR, market, which also continues to grow and expand. 

The only other real drag on API, is my opinion is that the current Board of Directors, who (with the exception of Rob Risser,) don't appear to have the technical knowledge/ expertise to head a cutting edge technology company. Many investors also rightfully, in my opinion have to question whether the current Board is "shareholder friendly", or is more concerned about their pay and compensation, often at the apparent expense of profitability and shareholder growth.  A resignation by one or more of the current Board, would be a real sign that the Board intends to rectify any perception that they don't have the shareholders best interests at heart. Time will tell, if they wake up and recognize the overall disdain many investors hold for them.  Anyone who reads the financial message boards will discover how widespread this viewpoint is. It's a self-inflicted wound, and one that needs to be addressed. As always this is all my opinion, and please DO YOUR OWN DUE DILIGENCE BEFORE INVESTING ANY MONEY. 

If you would like to listen in to today's conference call please read the following press release:
 Participating in the call will be Richard Kurtz (CEO and Director), Rob Risser (COO and Director), and Jeff Anderson (CFO). The conference call will be webcast live and will be accessible athttp://www.videonewswire.com/event.asp?id=100218. Participants can dial into the conference call at 877.870.4263 (412.317.0790 for international and 855.669.9657 for Canada). The conference call will last approximately one hour and will end with a question and answer period. A press release announcing the financial results will be released after the close of the market on the same day.
An audio replay of the call will be available shortly thereafter on the same day and will remain on-line until September 10, 2014. The replay will be available in the investors section of API's website atwww.advancedphotonix.com.

http://finance.yahoo.com/q/ae?s=API+Analyst+Estimates


Earnings Est
Current Qtr.
Jun 14
Next Qtr.
Sep 14
Current Year
Mar 15
Next Year
Mar 16
Avg. Estimate
-0.01
0.00
0.02
0.06
No. of Analysts
1.00
1.00
1.00
1.00
Low Estimate
-0.01
0.00
0.02
0.06
High Estimate
-0.01
0.00
0.02
0.06
Year Ago EPS
-0.01
-0.01
-0.07
0.02

Next Earnings Date: Aug 11, 2014 -  Set a Reminder



Revenue Est
Current Qtr.
Jun 14
Next Qtr.
Sep 14
Current Year
Mar 15
Next Year
Mar 16
Avg. Estimate
7.52M
8.32M
33.98M
39.87M
No. of Analysts
1
1
1
1
Low Estimate
7.52M
8.32M
33.98M
39.87M
High Estimate
7.52M
8.32M
33.98M
39.87M
Year Ago Sales
7.08M
7.54M
29.04M
33.98M
Sales Growth (year/est)
6.20%
10.40%
17.00%
17.30%



Earnings History
Jun 13
Sep 13
Dec 13
Mar 14
EPS Est
-0.02
-0.01
0.00
-0.01
EPS Actual
-0.01
-0.01
-0.02
-0.03
Difference
0.01
0.00
-0.02
-0.02
Surprise %
50.00%
0.00%
N/A
-200.00%



EPS Trends
Current Qtr.
Jun 14
Next Qtr.
Sep 14
Current Year
Mar 15
Next Year
Mar 16
Current Estimate
-0.01
0.00
0.02
0.06
7 Days Ago
-0.01
0.00
0.02
0.06
30 Days Ago
-0.01
0.00
0.02
0.06
60 Days Ago
0.00
0.01
0.04
N/A
90 Days Ago
0.00
0.01
0.04
N/A



EPS Revisions
Current Qtr.
Jun 14
Next Qtr.
Sep 14
Current Year
Mar 15
Next Year
Mar 16
Up Last 7 Days
0
0
0
0
Up Last 30 Days
0
0
0
0
Down Last 30 Days
0
0
0
0
Down Last 90 Days
N/A
N/A
N/A
N/A



Growth Est
API
Industry
Sector
S&P 500
Current Qtr.
0.00%
1.90%
55.10%
12.00%
Next Qtr.
100.00%
35.80%
23,408.90%
22.90%
This Year
128.60%
3.90%
-13.90%
8.60%
Next Year
200.00%
12.40%
3.00%
12.10%
Past 5 Years (per annum)
87.64%
N/A
N/A
N/A
Next 5 Years (per annum)
N/A
11.81%
13.35%
9.60%
Price/Earnings (avg. for comparison categories)
23.50
24.60
10.74
8.18
PEG Ratio (avg. for comparison categories)
N/A
1.20
0.74
1.84




1 comment:

J Moore said...

I've noticed insiders are buying.
More important Institutions are buying
so are Mutual Funds.

Equity and Debt looking good. I will continue to add at these level.

http://investors.morningstar.com/ownership/shareholders-major.html?t=API&region=usa&culture=en-US&ownerCountry=USA GLTA