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Wadirum1....it's in their archives already. Here is the link:
http://public.viavid.com/player/index.php?id=126763
They talk about multiple things still for 4th Q----"meaningful backlog", military contract announcement before the end of the year, new Tier 1 moving orders to 4th Q from 1rst Q (this is AT&T) plus getting another 100 unit follow up order already from the 57, new product shipped to another Tier 1 (that'd be T-mobile), deals closing internationally in next few months.
There is back/forth conversation on if they did/did not say they will beat 4th Q 2016 numbers ($7.2M). I don't think they actually say it, but they do imply that it will be better than 3rd Q. This is also implied if you look at the 10Q just released----they are still saying they expect margins to rebound in the 40-45% in the 4th Q with returning higher revenue. Also, they mention the lack of discount they got from suppliers for less volume and how that will change back to normal in 4th Q with increased sales volume.
I'm not saying that management comes across sharp. They are new to this and it's obvious the CEO doesn't have the personality to really sell himself. It does sound like he is working hard. However, in the end, numbers are all that matters. Can they get this to $6M in 4th Q and show that they could do $40M in 2018 with a decent backlog on Dec 31rst and perhaps close some international deals after the new year? If so, I think 2018 could be a good year.
This is coming from someone (me) who actually took a loss in the stock earlier this year, but find the story still interesting. They IPO'd poorly with Verizon not being a guaranteed steady customer. However, besides that fiasco, they have done what they said they'd do----get in all the U.S. Tier 1 companies, get international market built up, redesign products for lower cost (and hopefully similar margins still), do R&D on 200kW generator, etc.
Wadirum1....The Puerto Rico deal is AT&T. It's also the company that they said on the cc call is ordering more units (up to 100 already plus more coming in daily). One thing that could really make a 500-1000 unit buy in 2018 is if they are using them in their FirstNet contract (i.e. nationwide connection of first responders). You know these will have back up power for certain. Not sure if it's Polar, but it will be there as it's essential these towers are working in a natural disaster.
https://www.mobileworldlive.com/featured-content/top-three/verizon-att-team-to-build-hundreds-of-co-located-towers/
A few things on POLA---
IR said to another shareholder that I know of BEFORE earnings---
1. The 57 unit order was approx $19K per unit and it came from AT&T. True? Turns out from the 10Q it was more like $21K per unit. In the cc call they said it was from a new Tier one buyer. = all true from IR.
2. they expect AT&T to follow up on the Puerto Rico deal with orders between 500-1000 units going forward. Is this true? In the cc call they talked about the initial 57 units plus and that this buyer has come back and followed up with more than a 100 plus already plus more orders coming each day. This is the also the Tier one that they said would move orders from 1rst Q into 4th Q. = part of it is true so far. We'll see how it plays out.
3. IR also said to this shareholder that T-mobile is coming into the picture and company expects them to put in orders similar to AT&T. True? In cc call they did deliver the reconfigured unit at a lower cost to a 3rd Tier one buyer (this is T-mobile). = part of it is true so far. It needs follow up orders to really decide what direction it's going.
The CEO did say that their new Tier 1 U.S. companies kept them extremely busy in 3rd Q with the back/forth in getting the engineering down. Will this lead to orders that the IR guy said could potentially happen?
In 10Q, it shows Verizon was $2.2M of the $3.0M in revenue for the quarter. In the cc call they said it was refiguring of old sites, but not new sites as Verizon is holding off on those right now. Will they come back in full force later? Will they use Polar Power for 5g sites?
If Verizon kept at $2.2M per quarter and AT&T and T-mobile matched that (though if they really did 1000-2000 units combined, that's over $30M in orders), but let's keep it small......everyone does $2.2M x 3 = $6.6M/qtr. That's a solid business then. Toss in military. Get international going----in the 10Q they said they now have 8 sales execs worldwide with a supporting staff of 9 people---things could get interesting. They are qualified with 32 international carriers now with another 40 to go.
Dec 31rst 2016: $7.2M in revenue in 4th Q from being sales to just one Tier 1 U.S. company.
Today: $XX in revenue in 4th Q from three Tier 1 companies in the U.S., potential for 4th (Sprint), world sales operations set up going after RFP's of $100M+, approved to sell to 32 international carriers with 40 more coming.
If they sold 1000 units/qtr this stock is a huge winner. Can they do it is the question? They seem to be lining themselves up to go for it.
This stock could be a heartbreaker or this stock could be a home run. I think the downside risk is 20% and the upside is 100% if it came through half-ass. 200% if they pulled it all off.
wadirum1...POLA That $1.2M contract is the 57 units being sent to Puerto Rico. It's with AT&T.
AAOI...Amazon data center growth
http://www.datacenterknowledge.com/amazon/half-million-square-feet-amazon-data-center-space-under-construction-virginia
If AAOI is the low cost leader in 100g (which they claim), then Amazon will be back.
An interesting article from the CFO of AAOI. He says their biggest asset going forward is their state of the art manufacturing plant:
http://www.barrons.com/articles/applied-opt-cfo-murry-defends-its-leadership-in-fiber-optics-1505158764
Anyone like GPRO under $10? I realize it's not cheap by any metric. The stock was in the upper $11s at the start of October and then got dropped down because everyone thought the Google Clip camera would compete against it. They are completely different products. I am wondering about the stock because the reviews of the new Hero6 camera are really good and it's the #1 selling sport camera on Amazon (which shows it is popular already). What may be the big thing is the Fusion 360 degree camera coming in November. The reviews on the beta versions are really good and say it could open up a whole new category of camera usage----similar to what the original GoPro did. GPRO isn't just focused on the hardware, but on putting out top quality editing software too (for a change). If this product took off it could reverse the fortune of the company and everyone's opinion of it. Have they (finally) gotten their act together?
The company announced in early Sept that they expect to be at the high end of their guidance. One plus is there are 30M shares short on the stock.
I was liking it for a swing trade or more. Nothing like a money losing dog that turns it's act around and becomes a top pooch of Wall Street as upgrades roll in. The stock was $16 on Sept 26th, 2016 (a year ago). It has far better products for Xmas this year (and it appears no issues with quality).
Earnings are next Wed.
Great move today! I will admit I took profits in the very high $11s. I will be back if the stock drops. I think there is a strong future here for sure. I just didn't think the earnings report was worthy of the stock being so high. The bookings for 3rd Q was lower than I expected/wanted. I'd of held my shares if it had been above $10M. With it in the low $8M range I think it means 4th Q will have revenue around $8M. I think that knocks the stock back eventually. I will load up again later (hopefully).
Hweb, bbotcs...DAIO. I think the future here is very strong, however, they booked $7.9M in 3rd Q last year and 4th Q revenue came in at $6.4M last year. They booked $8.2M this quarter. There is no way then that 4th Q revenue this year is anything above the low $8M range. No way, even if they do part of the backlog. Margins will be lower because of less product sold too (vs the 62% that just happened). As such, that's only around 11 cents/share. I think sometime there will be a window to load up again. I will sit and wait for it. I fully intend to try and get all my shares back here and play this long term. I just have kicked myself for not booking profits before and buying back lower. This is a very thinly traded stock. It may go a lot higher, but can anyone say that DAIO is a softball pitch of an investment today at $11.85? I couldn't. Not with the Nasdaq up so much.
bbotcs....I won't lie, I now have my fingers crossed that buyers dry up, shorts come into play a bit and the stock drops on low volume over the next few weeks. With my luck it will go to $13 and I will kick myself :)
DAIO....I just sold out my whole position between $11.70 to $11.90. I really like the future here, but the reality is that bookings of $8.2M in the 3rd Q means that 4th Q revenue is coming in the low $8M range (probably close to 12 cents/share net income). This is a very volatile stock. I think I can get my shares back in the low $10s or better before 2018 really starts to ramp up.
linuspop...thanks. I like the last 30 seconds of the podcast "we are public with our relationships with Renesas, Infineon, EBV, but stay tuned for more announcements shortly."
Another thing DAIO has going for it is that as they approach $100M in marketcap the likelihood of picking up an analyst or two goes way up. There aren't many Nasdaq companies at that level that aren't followed by some firm. This is important as it could start to put a forward p/e on the stock as the story plays out more.
GM announcement--the way of the future for automotive manufacturers??
GM was up 4.4% today. They announced that they will have a fleet of autonomous vehicles by 2020. The also announced that they will have 18 models of electric cars by 2023 and, eventually (who knows when?), will end the combustible engine car.
More autonomous vehicles = more semiconductors per car.
More electric vehicles = more semiconductors per car.
More infotainment = more semiconductors per car.
All this equals means more security at the chip level which aids DAIO. Also, all of this means more data being transferred per chip which aids DAIO as you need more machines to make sure you don't bottle neck the process.
Even U.S. Congress is about to pass legislation pushing for autonomous vehicles. It's about the only thing they have passed in 2017. The other thing that they may get done is a bill on IoT security (which is the next big winner for DAIO).
2017 looks good for DAIO. 2018 does too. The thing is it may look good for multiple years after that. Sure, buying DAIO's equipment for the OEM's and other companies is a capital investment they may not be real excited about doing, but they either get involved in security now or will pay for it later for sure.
I like the stock at 52 week highs. I'm hoping $10 is just a drop in the bucket compared to where it could be 2-3 years from now.
Trent... I think Q3 bookings will be the key. Scenarios:
1. I think the stock is priced such that the market is expecting a decline from Q2. The CEO said he thought Q2 would be the peak. However, he clarified in the Q&A he was being conservative and that Q2 came in higher than internally expected. If Q2 came in at $9.5M in bookings, I think the stock stays in the $8 range, maybe low $9s. Probably an opportunity to hold a core position, but flip out of some shares if it shot up for a day and buy back in the weeks/months to come.
2. I think if they came in flat with Q2.....low $10M range, then the market will realize that the company will do $1+/share in 2018. You figure they will do 20+ cents/share this quarter. The backlog and (especially) the deferred revenue will make this happen. If bookings were similar to Q2 then you are looking at a similar number for in net income for Q4. You take that out into 2018 with the IoT revenue starting to flow in and it looks good. I think the stock moves up to $10 if this scenario happens.
3. Bookings came in higher, say $11M. This is obviously just fingers crossed type of thinking. I'd like to think the automotive industry is ramping up more and more. Not on cars sold, but on semiconductors added in + amount of data put on those chips. As the CEO said, there is a lot of growth from just an increase in data. Think of a factory. If you add in more data per chip which increases the time to do so, then you better add in more machines doing it or else you just created a bottle neck in the whole operation. I think if this happens then shareholders can sit back and relax and enjoy the ride to $20+ over the next 12 months without much worry. It'd be obvious the DAIO is in the right place at the right time and IoT will only add to to it.
Time will tell. I will say that when you listen to the CEO on the investor presentations (he's doing another one on Sept 20th), he sounds like things are going very well. I'm hoping that bodes well for Q3's report and gives investors scenario #2 or #3.
Hweb2...SCKT paid $40K for an analyst to write a report on them. They are projecting 12% growth in 2018 and 2019 and going from diluted net income of 24 cents/share in 2017, to 28 in 2018, to 2019 in 2019. (You have to look past their "adjusted net income" numbers they are using initially and delve a bit deeper into the report).
https://www.socketmobile.com/docs/default-source/Sidoti-Company/sckt-rpt-09-07-17.pdf?sfvrsn=0
Disclosure: I don't own any shares anymore. I also am not looking to buy any at this price. It's probably a decent buy level, but I just question whether anything is happening with the industrial scanners. I sold because that was an area I was very excited about and nothing seemed to be happening there. What I tracked in inventory numbers was minimal (vs say the sub $200 7ci and 8ci). It makes me wonder if they are in the right software with the right strong partners to break into the established warehouse market.
Why the CEO is excited about IoT---makes sense now......
In the presentation that just happened he talked about how excited they were about the Internet of Things area, especially through the microcontroller route. As he explained in the presentation (and from their pr's earlier this year), they teamed up with Renesas to provide the "secure channel" programming for Renesas's Synergy IoT system for microcontrollers
You can see DAIO's part of the Synergy program in the following video (bottom of the page):
http://www.dataio.com/Technology/Sentrix
The key is to look at what Renesas is up to with their Synergy program.....turns out they are partnered up with with a 5 way team including themselves, Verizon and their ThingSpace program, Qualcom, and Arrow Electronics (NYSE: ARW, $7B marketcap).
Here is Arrow's webpage on the whole program (very informative):
https://www.arrow.com/en/campaigns/renesas-synergy-iot-enabler
Verizon ThingSpace: https://thingspace.verizon.com/
https://enterpriseiotinsights.com/20170511/fundamentals/verizon-explains-thingspace-platform-tag4
Another branch of this is Bosch (the one who has the 5 year agreement with DAIO). They are teaming up with Arrow Electronics to go after IoT with their sensors using Renesas's Synergy program on their new circuit board.
https://www.arrow.com/en/research-and-events/articles/arrow-electronics-signs-global-agreement-with-bosch-sensortec-to-address-iot
I can see why DAIO's CEO is excited about the future area they are going into. They aren't running this solo. They are a piece of a large partnership going after the whole industry. It also makes sense on why in the presentation they are talking about "Democratizing" the security of IoT (i.e. opening up the secure programming ability to all levels of customers). Verizon is opening up their ThingSpace to anyone and everyone. That opens it up to all levels of developers big and small who are creating products. Verizon just spent $2.4B to buy Fleetmatics and their GPS system to provide that ability to developers...."The deal will make Fleetmatics a part of Verizon Telematics, a subsidiary of the telco that focuses on fleet management, mobile workforce solutions and IoT"
https://techcrunch.com/2016/08/01/verizon-buys-fleetmatics-for-2-4b-in-cash-to-step-up-in-telematics/
Needless to say, it doesn't appear that DAIO is pursing this opportunity solo.
Midwest Investor Conference. Worthwhile presentation to listen to. The CEO explains the business well, talks about competitors, describes how their automotive industry will grow, and talks about the future of their new SentriX system and Internet of Things. Here is a link to the recording:
http://wsw.com/webcast/threepa23/daio/?lobby=true&day=1
Wade...DAIO...
I think a lot of it had to do with lack of buyers and then computers playing games. A string of 100 share sales on the bid knocked it down. It sat at a spread $8.20 x $8.59 for around an hour. Even now it's $8.32 x $8.52.
One thing you have to remember with DAIO is that it is a low float. There aren't a lot of shares and 30% of the shares of those are held by institutions. If there is buying interest it can jump up. If there is low buying interest for the day, then it can drop quickly. Computers can have fun trading 100 share lots back/forth and move the stock around.
I don't expect any real move until 3Q earnings.
They are presenting at the Midwest conference tomorrow (3:50pm). It will be livecast at:
https://finance.yahoo.com/news/data-o-present-midwest-ideas-130000318.html
Wade...DAIO
What % of their revenue from automotive sector? From the Q4 2016 cc call, CFO stated "Automotive bookings were up 55% year-over-year and now represent 47% of our orders." I've heard them say something similar more recently (cc call or investor presentation?!?). I doubt it has changed much. I think 50% is a reasonable number.
As for your second question.....obviously the future is a bit of a crap shoot, but I think the likelihood of DAIO continuing to grow is good.
Think of DAIO being more dependent on "# of semiconductors/car" x "realization by industry for the need for security at the chip/microcontroller level as the the electronics of vehicles grows" x # of cars sold worldwide as the real factor for them. The typical midrange car right now has approx $350 worth of semiconductors in it. On the other hand, the higher end cars have over $1000 worth. The more this trend flows down to the vehicle price food chain, the more the prevalence is needed for security at all levels.
DAIO "Our strong growth in market share in automotive electronics reinforce our belief that we're in the wave of a new and exciting electronic content, including automotive infotainment and instrument cluster applications, advanced driver assist systems, increased use of electric hybrid engines and powertrains, and generally more systems to support autonomous driving strategies from leading automotive OEMs".
The biggest thing that will change the industry is autonomous vehicles. Just Google it and you will see every single major company is pushing to be the first to get to level 4 (i.e. can drive in a city or the highway). Right now Baidu in China is close to being the leader with them saying they will be there by 2019 with the idea that taxis in their major cities can be set up for it. Once the computer controls the car for a moment, then you need security at all levels of a car right down to the windshield wipers, radar, lights, etc. Also you have something that is called Drive By Wire. It's the idea that the are no more cables in a car (i.e. throttle cable). Everything is run by wires, small microcontrollers, servos, etc.
https://www.lifewire.com/what-is-drive-by-wire-534825
Also, once a car is able to drive by itself at some level, then the need for infotainment goes up for the passenger. That's pretty obvious.
The current projections put 10% of all new vehicles sold by 2022 to be able to drive at level 4 autonomous. The idea is that 90% sold by 2030 will be there. Even the U.S. Congress---which can't agree on anything---is actually passing legislation to advance autonomous vehicles and push security:
https://www.nytimes.com/2017/07/21/technology/self-driving-cars-washington-congress.html?mcubz=1
You can also figure the trucking industry will go this route for highway driving at least.
Imo, the advancement of the electronics in the automotive industry is only going one direction. The only question is the rate at which it moves and flows down to most levels of vehicles. It's why I say if business is good for DAIO today, it will be even better in 5 years.
The next area then is Internet of Things. It's why the company is spending so much R&D money on their Sentrix program and lining up the major partners they can now.
last cc call......"the increase in our R&D was about $600,000 year-over-year and that was predominantly to support the management secured programming. There were some other automotive initiatives in there as well, but most of that goes to MSP. And again, those investments are going to capture what we consider to be a very meaningful opportunity. I haven't quantified it specifically for you in dollar terms, but I used the term meaningful deliberately."
Nothing the company is saying or the actions they are doing indicate that they think the shift towards the need for security at the microchip and microcontroller level is peaking right now. I'm betting that this is true. If so, then the company has a real shot at earning $1+/share in 2018. I know you have done very well on AAOI in the last year. Have you asked yourself why are Google, Amazon, FB, plus a host of other companies building these massive data centers (and driving AAOI's revenue)? It isn't just to sell more books/retail or to let businesses run their Excel spreadsheets in the Cloud more, it's also because data accumulation and analysis is going to be a huge money maker in the future. The connection of vehicles and the connection of IoT are two big things that are part of this. He who controls the software of autonomous vehicles controls the data! It's why this area won't fail. Too many companies desperately want a piece of this. DAIO is just a backdoor investment approach to this desire to get info on everything. The more things are connected, the more that they will be hacked going forward. As such, the need for security increases.
As I said before, imo, technology is only going one direction. Vehicles will use more semiconductors as cars advance. Iot usage will increase. The only questions are at what rate? And can DAIO get itself lined up with the right partners and be cutting edge on what they provide (vs their competition) so they are integral to it all at the security demand at the semiconductor level?
One added plus to this all---30% of DAIO's revenue in Q2 was reoccurring (adapters sold to connect to the microchips + continual software updates). That will only grow in revenue as more and more systems are used.
As for Q3. I'd be ecstatic if Q3 bookings came in at Q2 levels. I'd be happy if they did what SSKILLZ estimated of 20 cents/share in Q3 and 16 cents/share in Q4. I will take 62 cents/share diluted for the year for a company who's future looks like it is in strong demand. I can hold for 2018 and 2019 and let it keep building more and more. The day the first vehicle is autonomous (level 4 at least), is the day you know Wall Street will go crazy and chase up everything that is connected to it. DAIO is a backdoor microcap approach to it all. The plus is IoT is another huge potential winner for DAIO and isn't priced into the stock at all.
Newest investor conference & latest institutional numbers:
Them presenting at the Midwest IDEAS investor conference on August 30th is new on their calendar (imo). In the last cc call management mentioned "...........I'd just like to maybe remind people that we will be participating at the Dorothy and Company Institutional Investor Conference in Minneapolis on September 19". As such, I think this one at the end of August got added on.
I'm not against them getting out and telling their story. The key is that they keep backing it up with improving numbers each quarter. Promotion without revenue/net income growth is just hype.
Latest institutional update for end of Q2 shows an addition of 530K institutional holders added in Q2. The total is now approx 2.5M shares:
http://www.nasdaq.com/symbol/daio/institutional-holdings
Quarterly Booking #s last 2 1/2 years.....
2015:
Q1 = $5.1M
Q2 = $5.9M
Q3 = $5.9M
Q4 = $4.1M
2015 = $21.0M
2016:
Q1 = $5.9M
Q2 = $5.7M
Q3 = $7.9M
Q4 = $7.4M
2016 = 26.9M
2017:
Q1 = $8.4M
Q2 = $10.1M
Q3 = ?? It will be interesting
1/2 of 2017 = $18.5M.
2nd Q 10Q:
https://www.sec.gov/Archives/edgar/data/351998/000035199817000033/f10q_06302017.htm
Not much in it that is concerning. The only thing to note is that they have like $18M in tax loss carry forwards, however, they have been profitable long enough now that they may need to recognize part of these this year. The language from 1rst Q 10Q to 2nd Q changed. It's something to look for in the 3Q 10Q.
Q1 "Given the uncertainty created by our loss history, as well as the ongoing uncertain economic outlook for our industry as well as capital and geographic spending, we expect to continue to limit the recognition of net deferred tax assets and accounting for uncertain tax positions and maintain the tax valuation allowances."
Q2 "Given the uncertainty created by our past loss history and the cyclical nature of the industry in which we operate, we have limited the recognition of net deferred tax assets and maintain the tax valuation allowances. We expect to further analyze the level of valuation allowance during the second half of 2017 as we get better forecast visibility.
@Jockinmikeg......I figured this board could be helpful to share info as this story could play out over time. I'm thinking investors need to think about where this company could be 3 years from now vs 3 months from now. I realize that isn't the mentality of most people, but it's one that could do well here imo.
Hweb2...Thanks.
Did you see where Intel closed on their $15B buyout of Mobileye (the company that used to be connected with Tesla in their Autopilot driving system? Intel then immediately announced they are spending $250M over the next two years to work on autonomous cars. They intend to have 100 cars on the road soon for testing. Part of this deal is connected to Delphi (a long term customer of DAIO's). Their plan is to have a working Level 4 system by the end of 2019.
http://host.madison.com/business/investment/markets-and-stocks/why-intel-and-mobileye-are-building-self-driving-cars/article_2e7718c1-de52-5b28-b1a7-8b7cc45ea312.html
https://techcrunch.com/2017/05/16/bmw-intel-and-mobileye-bring-delphi-in-on-their-self-driving-platform/
Right now most of DAIO's automotive growth is coming from the increasing use of high-end semiconductors in cars for electronics. This will only mushroom (imo) when some level of autonomous cars start to become functional. The latest estimate puts 10% of all new cars sold in 2021 with this ability. By 2030 it will be 90%. The more the autonomous area grows, the more the infotainment area of vehicles will grow.
It's like connecting the dots....you know where this is all going. Cars/5g communication/data transfer/data collection/Internet of Things are all merging together. It's just a matter of being patient long enough for it to get there.
The other thing you can know for certain is that villainous individuals will try and hack into everything involved with this future. It's why having security will be paramount initially. Even if it isn't at the start, it will be as the ball rolls along. If DAIO can spend the R&D to get ahead of the curve now and lock up the partners, then they have a chance to control a solid market share of an emerging growth area.
I wish I had latched onto this company earlier. I just didn't fully appreciate it at the time.
Video showing DAIO's business going forward with IoT:
This is a video showing their partnership with Renasas (multi-billion dollar Japanese company):
Resurrecting the DAIO board.....
I thought I would breath some life into this message board. I am starting to like this stock as a long term core position with a smaller portion trading the swings. When I say long term----I mean 5 years or more. Why?
Imo a major shift in the automotive industry is forming. Cars are going to be heavily connected to the internet for infotainment, sensors, cameras, etc. The are 100s more semiconductor chips in a Tesla than there are in a standard car now a days. This means increasing use of security at the microchip and microcontroller level. You can see this now in how DAIO's automotive revenue is growing at a rate of 50% year over year. I see this trend continuing and growing going forward.
The next thing is autonomous vehicles. There are 5 levels of it. Every car manufacturer and major tech company is going after this. ex. Intel just bought Mobileye for $15B and announced they will be spending $250M over the next two years pursuing it. By 2021 the estimate is 10% of cars sold (the high end ones) will have some level of computer driving. By 2030 over 90% of cars sold will have it. This just screams for the increasing need for additional security.
The 3rd thing is Internet of Things. From every appliance, sensor, camera, etc that is located in your house, business or in public areas. Everything is relaying info back/forth and will need security.
The key for DAIO is being cutting edge on R&D and lining up the partners. They seem to be doing a good job on it. Then it is a matter of letting it play out. If all these industries grow over the next 5 years, how much more will they grow over the next 5 after that and 5 after that?
Imo, as it all plays out, DAIO gets bought out. The only question is when and at what price.
Value1008....DAIO I bought some shares for myself and a few for my mother's account today. I expect a rebound on the stock when the information on the new partnership they signed in the 2nd Q for their new SentriX system is released. (I'm hoping it's STMicroelectronics). As this product line advances then it will garner more attention in it's potential for growth compounding on what is already happening.
"SentriX.......In Q2 we contracted to support another secure elements suppliers architecture we can't announce the name publicly at this time but stay tuned."
That's my thought anyways.
Jockinmikeg...DAIO.....Gov Legislation mandating Iot security.
https://www.lawfareblog.com/first-legislative-step-iot-security-battle
This can only give a tailwind to DAIO as the requirement that all devices of any type that will connect to the internet for data collection/diagnosis/updating of appliances that are sold to the government will be required to have embedded security. This pushes the way for it in the consumer world. It's a bipartisan bill so it most likely will pass.
For those of you who wonder exactly what DAIO does........
Here is a link to a video to help explain to people what DAIO does. This is their connection/partnership of their SentriX system (the one they are spending $600K more y.o.y R&D on) with Renasas (multi-billion $ Japanese company and the #1 supplier of flash microcontrollers in the world) Synergy system and Security Thingz (a software company):
Hweb2....DAIO
I'm with you 100%...... I think the stock is a steal at under $8 just for the increasing demand for embedded security for automotive industry and the growth that is happening alone.
What's amazing is an investor is getting the future of embedded security for IoT is a freebie here. You Google their partnerships they are lining up for it......Inferion, Renasis, EBV----these are billion dollar players in the microchip industry. This is why they are spending $600K more y.o.y on R&D.
The latest earnings report and cc call connected the dots more and more to what the future holds and people sell because Q3 may come in at "only" a level equivalent to Q2 bookings which were a 17 year high?!? What about the growth that is coming for sure next year and the year after and the 5 years after that? It's crazy how the market works sometimes.
What I really like is that reoccuring revenue was up to $2.8M for the quarter (this is the adapters and software). The more systems the company sells going forward, the more this number goes up and up :)
Hweb2...DAIO Q3 thoughts.......
I've been shaking my head at this one since the earnings report and buying shares with the stock price gift. This company is in the right place at the right time with the right management focus. Embedded security on microchips and microcontrollers for the automotive industry and coming IoT world is only going one direction. The whole industry is expected to double in the next few years and you know it will only double after that and probably again after that. It's like a stock that could go to the moon and everyone complains that it didn't take off from the launch pad fast enough and sold??
Rough way to estimate quarterly earnings for DAIO to show what the deferred revenue of $2.8M means:
Take Backlog + Deferred Revenue + add in how much they will do in a quarter for adapters/software. It kind of makes sense. They take the backlog at the end of each quarter and make plans to deliver it all in the next 90 days. The deferred revenue is already in the process to being delivered so that gets added on top. Then take what they do in adapters and software upgrade for a quarter and add that in figuring those orders just roll in as a quarter goes by (yes, you can't know what this will be specifically for a quarter, but you can use the previous quarter's numbers and the trend).
ex. 1rst Q #s estimate: Backlog on Dec 31rst (= $3.20M) + Deferred revenue on Dec 31rst (=$1.90M) + we know for a fact they did $1.90M in adapters & software (from CFO Joel in the 1rst Q cc call). This adds up to $7.0M. They did $7.20M in reality. The method was short by $200K.
ex. 2nd Q #s estimate: Backlog on March 31rst (=$4.9M) + Deferred Revenue on March 31rst (=$1.4M) + we know for a fact they did $2.6M in adapters & software (from CFO Joel in 2nd Q cc call). This adds up to $8.9M. They did $9.10M in reality. The method again was short by $200K.
So now for a crude 3Q estimate...........
Backlog on June 30th (= $4.70M) + Deferred Revenue on June 30th (= $2.80M) + we will have to guess/estimate for adapters & software. I will use 2Q numbers of $2.6M. This adds up to $10.1M. I won't add in the $200K extra the other methods missed on. I will use that as a buffer in case adapters/software updates come in a little lower than my $2.6M number.
$10.1M x 57% margins - expenses expected to be flat with Q2 according to CFO in cc call ($3.90) = $1.86M net income. Even if there is a slight adjustment for taxes/currency, they are doing 20+ cents/share.
The only question is what are bookings for Q3? I'd be happy if they are flat with Q2. Q2 was a 17 year high. If they matched it in Q3, that's 35% better than a year ago. It'd set them up for a $10M and 20+ cent/share 4th Q. This is all good. The real plus is the new product line with the impressive list of partners will start to come into affect in late 2017 with the idea it produces (according to CEO) meaningful impact in 2018 and beyond.
I think what happened is the buy side volume dried up. I was watching it and there wasn't much there. It then went to $5 and just after that it dropped. My guess is some stop losses got taken out. It'd be nice to see it close above $5 at least. The stock needs some good news to get a recovery really starting to form.
Did you see the latest short interest update? It's obvious the stock was targeted for an attack and they already covered after earnings. This is through May 15th:
5/15/2017 37,759
4/28/2017 318,278
4/13/2017 153,345
3/31/2017 15,121
Read more: http://www.nasdaq.com/symbol/pola/short-interest#ixzz4i8G1fhzC
I saw where they posted on their website that 2Q earnings will be released on August 8th. At least they are ahead of the game there now! Hopefully they do a cc call (IR has indicated he is pushing them hard to do it). It would be nice to get an update or a contract or something to indicate revenue diversification in the next few weeks.
They still have the LD Micro conference on June 6th to attend. That is more small investors than institutions.
I'm hoping it is "good-bye $5" soon as it goes over $6 :)
The plus is this stock action + volume means the shorts don't control the stock anymore.
That might be a bit too much. I have noticed the endless pecking away on the bid has ended.
Wadirum1....individuals may not like the stock, but institutions do. The latest numbers from end of Q1 have been updated. 1.12M shares held by 22 institutions. 541K shares were bought/added the first 3 months of the year at, obviously, a price a lot higher than today (vs 173K sold). The float (from total amount of 10.1M - locked up shares insiders own, 7.3M is only 2.8M or so.
We will have to wait 3 months to see what kind of churn action happened on these shares since March 31rst.
http://www.nasdaq.com/symbol/pola/institutional-holdings
It'd be nice to see some institutions who met with them today at the Oppenheimer conference step in tomorrow or TH and squeeze the stock up a bit. I don't think it'd take much to get the tide moving the other direction.
10K came out today. A few things in it:
On AT&T and T-mobile: "We made substantial progress in our plan to reduce our customer concentration and to secure new wireless carriers for our DC power solutions. During the three months ended March 31, 2017, we obtained approved vendor status with two additional Tier 1 U.S. wireless carriers. We expect these new carriers to commence ordering products during the next two quarters."
on competition: "We also reduced the prices of our DC power systems during this quarter. We believe this price adjustment will assist us in developing new business in international markets and will provide us with a competitive advantage in the U.S."
On Verizon: "Although we continue to receive purchase orders at a steady rate, the monthly average amount of sales to Verizon Wireless has been lower than the previous two quarter’s monthly average sales volume. Based upon conversations with representatives of Verizon Wireless, we believe that order rates will improve during the second half of 2017."
r59..POLA. It's an odd situation with the price vs expectations vs reality. I get updates on their news, events, pr's that I signed up for on their website. Yesterday I got the following e-mail:
"Polar Power, Inc. has added a new event to its website:
Oppenheimer Emerging Growth Conference
Click here for a complete listing of Polar Power, Inc. events. "
----What it was for is that they just added the Oppenheimer Conference on May 16th to the list that they are attending in May (3 total investor conferences). If they were going to disappoint, would a CEO sign up for another conference?!? I would say not, but the stock price is saying different.
https://ir.polarpower.com/investors/events-and-presentations/
Wade..AAOI I think it will hit a new 52 week high in 2017 if you wait for the story to keep playing out. It's obvious the company is in the right place at the right time. On the other hand, it's also a trading stock that opens up opportunities to possibly sell high and catch it lower. I'm not sure how I will play it yet. I didn't sell it after hours. The stock is still 20% off the 52 week high and they just made it clear that they are hitting home runs with business. Analysts will upgrade their predictions. I'm solidly up in the money now so I can afford to be patient and let it breathe a bit.
AAOI....Wade....thank you. I actually picked up 5000 shares in the last two days. I decided this downturn was more manipulation than based on fundamentals. I appreciate you posting about it.
Hweb2...POLA. I've been liking the action so far. I admit I picked up a pretty big position with an average of $8.10. I've been going through every line of the SEC filings, reports I can find anywhere, employee comments, industry news, DC generator competitors, etc. I really like it as a potential long term hold that could play out nicely. I'm going to hold for now, wait for 1rst Q earnings, and see what comes of it. If the story keeps progressing and the risk is reduced (with more diversification of customers), I wouldn't mind buying more shares at a higher price even to use as a multi-year hold.
I'm less concerned about back log than others. They used up like $3.5M of their backlog in 4th Q (I'm doing this off the top of my head so I might be off a bit), but they did $7.28M in revenue for 4th Q. If this was a normal situation it would be a concern. However, 98% of their revenue comes from Verizon. As such, they got $3.7M in extra business from the same customer in the 4th Q that their backlog existed with. It tells me that Verizon is throwing business at them as it comes up, backlog or no backlog.
I will admit that I haven't spoken with the company. However, the SA article author described management (especially the CEO) as engineers who eat oatmeal for breakfast. When you read Glassdoor employee reviews they state the CEO is hard driving and a bit critical. All this works for me. He has 5.5M shares. I can't imagine he did an IPO (and diluted himself out)and is looking to hire 16 more employees going forward without having a solid forecast of where he can take this. IMO, I've found most people who are practical, anal, and a tough boss don't necessarily live in a fantasy world or daydreams. They respond to what is in front of them.
1rst Q will tell a lot imo.