Hweb2...the wildcard for 4th Q and/or 1rst Q is the van line deal. An associate of mine spoke with them this week. It is not in the revenue projections even though they spoke with the van line company here recently and the "deadline" for drivers/agents is still Dec 31rst or else they face a penalty. The reason it wasn't brought up in the call or in the calculations is because they don't control the timing of it. (This applies to a couple of other "deals"---no details on them other than that). If they tell everyone it's going to happen and then it gets delayed again, shareholders get upset. This is their more conservative approach rather than pumping everyone up like in the past and disappointing them. Listen to the 2nd Q cc call (or transcript on their investor relations page or Seeking Alpha)---what was discussed there concerning the van line deal still holds.
I'll update my inventory tracking for N.A. this weekend at the end of the month. October numbers are not bad at all. The last 8 business days have made a big difference for the month. People must be thinking 4th Q will be a bomb?? I see a little slowdown, but nothing bad. I can guarantee you that they aren't going to their first IR conference in Dec in 3+ years to discuss a negative net income 4th Q.
I try and tell people, but I don't really care anymore if they don't listen. This story is about 2014 (80% scanner growth overall), 2015, 2016, 2017, not whether 4th Q does $4.4M or $4.6M. Scanners are only going to grow as the industry expands. It's not Socket that is the focus, but their partners who are expanding it for them. The real question is "are they going to grow 30% or 50% or 70% a year from now on?" Management is very bullish on where they think this can go in time. It will come out in time. I wrote the CFO this week saying their "conservative" approach in the cc call is appropriate for now, but in 2015 they need to open up more. I encouraged them to bring their new Marketing V.P. into the discussions on how to "market/sell" the stock to investors in conversations and cc calls when the pipeline strengthens and they feel more confident. It's been a rough last 2 years and they don't want to stick their neck out too far right now.
3Q did about 14500 scanners. In 65 business days of selling, that's only 223/day worldwide. Shopify, Verifone, Square, Lightspeed, Fujitsu---plus about a 100 more POS systems (from tiny to large) are going to stay at that level? NCR's CEO in 2013 said they see 4M small business in U.S. and another 4M worldwide for their NCR Silver product. Everyone if fighting for market share. The simple cloud based POS tablet system is being replaced with software that integrates inventory, payroll, accounting programs, everything a small business needs. The whole industry has just started and will push harder in 2015 than 2014. (Same goes for each year that passes until it peaks). When they do 800 scanners/day in 3 years, at $240/scanner, that will be $12.5M per quarter. At 50% margins by then and expenses probably around $2.3M to deal with it (yes, they shouldn't go up much---hire more Mexican ladies in the warehouse to snap scanners together and box them and a couple of key people. No need for more engineers. I've toured their whole company and its simple but efficient), and no taxes yet because of the huge tax loss carry forward, it will cause a lot of money to flow to the bottom line. Now that Hudson Bay did a cashless conversion, absolute full dilution right now is approx 8.5M shares in time. Not bad compared to a lot of microcaps.
When Hudson Bay is done selling (probably around 200K shares now left as of this moment---I heard what they did before is they shorted the stock and then called Socket up and exercised their shares in bulk to convert and cover), there won't be much liquidity left. You won't get it below $2 imo even with this selling. Hudson Bay isn't dumping their shares foolishly.
People may be thinking I'm day dreaming here. I guarantee you that I know more about this one company and the industry they are rolling into and it's future than one investor really should.
Another wildcard.....the Apple iPad Pro now expected in 1rst Q 2015. Apple is going after businesses with it. Steve Jobs ignored business usage, but Cook sees it as an untouched industry. That tablet is MADE for the new cloud POS systems. It will push the whole industry forward even more imo.
