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Did you see on Glassdoor where Arthur went on there and responded to a bunch of the reviews? The one that stands out to me is a review from Dec 23, 2016 where Arthur responded back on July 5, 2019 with:
"Thank you for taking the time to write a review. Your feedback is greatly appreciated. We agree 100% that we need more engineers. We currently have approx total of 20 engineers between our offices in Namibia, Poland, Australia, and LA. We will be seeking another 10 engineers between now and the end of the year."
What happened to this plan? That is the kind of comment I would think a CEO would make when his new products are 3 months behind in development and he can't close international deals without more "corporate support" (i.e. to me that means more engineers involved in convincing foreign customers that initial cost is less important than long term costs). What happened to hiring them?
On the other hand, 10 additional engineers is $250K+ in expenses or more per quarter.
They were supposed to debut the application control system they need for international and US Tier 1 at the DSEI show today. As you can see (or don't), there is no pr of the product or even picture on their Linkedin page of their booth.
Good news is they are hiring with two new ads. Bad news it looks like replacement people.
---New HR manager (last one I could find on Linkedin was there for 13 months and now left end of August).
---New Senior CAD/mechanical engineer (last one I could find on Linkedin left in July after 12 months).
Updated analyst estimates:
https://finance.yahoo.com/quote/POLA/analysis?p=POLA
Did you see the newest # for Q4? One of the analysts updated it recently and is figuring it to be $5M in revenue. They are obviously figuring that backlog going into Q4 will be minimal.
I think this is the funniest (most bizarre) part of his whole interview:
"So, another reason to pursue the international market is to increase of production volume. I believe that we could make DC generators at a lower cost than AC generators if we can get to similar production volumes as our domestic AC generator competitors; who are in the 100,000 plus volumes annually. To reach these high volumes, we do not want to subsidize or greatly reduce our profit margins, so combining domestic and international specialty / premium markets will allow us to grow volumes but do it profitably and avoid the commodity like products most of our competitors offer"
100K units per year in sales to get costs down?? Lol. POLA can't even do 500-600 units in sales per quarter consistently.
POLA interview on international:
https://www.alphadirectadvisors.com/wp-content/uploads/2019/09/POLA_Management-Series_alphaDIRECT_September_ADA_format_2019_FINAL_II.pdf
Arthur goes on about potential, but in doing so he also states that they aren't competing on upfront cost with A/C generators internationally and it's the #1 thing these telecom companies are looking for. The second thing is that international wants companies to do all the monitoring and maintenance on sites as follow through in the future. That's great if it's Namibia where POLA has a team (doing who knows what), but in other countries of the world they can provide minimal follow through services (unless POLA plans on building teams in every international country they get a contract in). The third thing he discusses is the need for more application engineers for sales and support. Again, odd that they aren't running new ads for this. It's an interesting interview that surprisingly shows all the weaknesses of the company while trying to show there are strong opportunities. Sort of like the last cc call.
Imo, they are at the point where they need to partner up with a large international company with worldwide presence who wants access to US market. Otherwise POLA may be too small and their access to additional capital too limited anymore to grow to the size needed to get costs down and support up.
The big question is does Generac (as they said in 1rst Q cc call) come out with a DC generator going forward? They also said they have a whole line of natural gas generators coming.
I doubt it was even that much. Once they put in a bid the computers probably jumped over it. If they were smart, they walked the bid up and the computers with it. However, it will only go so far. If selling hits the computers bids too much, then they accumulate too many shares. If no one is buying on the ask back from them so they reduce their numbers down, then they take their loss by hitting the bid themselves if a large order is there. Computers don't have emotions and so they just do what their programming tells them. The thing is there are probably multiple ones at play here even in this low float micro stock so even they compete against each other in different ways. It's why there is always the worry about a panic crash. All the computers pull their bids and things drop. In a way, it's how POLA jumped from $4 to $5 after the 8K was filed 3 minutes before the market closed for earnings. Computers now are programmed to watch and even read SEC filings. They pull their asks together seeing that results beat expectations and let the market determine the new price before they decide to buy, hold or short.
None of this means anything though. POLA needs orders between now and Q3 results (to show backlog is strong at the report time) or else they will be the only buyer left in a sea of tax loss selling that will surely come.
MrT11...OSS...Thanks for bringing it up on the board after earnings. I never had heard of it before. I loved what I saw to it and pounced hard. I got 1/2 of a big position in under $1.80 and the other half from $1.80 to $2.05. I will admit I got upset this week as it started moving up so quick after the last of the ATM money was raised----it forced me to chase it a bit even though I knew I was driving up the price on myself a bit. However, I couldn't believe they were giving shares away so cheap for a company that is on the leading edge of hardware---custom A.I. hardware for field applications.....oh yeah. No wonder they are closing on record # of new deals per quarter now.
They should have turned a net income profit in Q2 without the goodwill write off. I believe, if they get the Raytheon order in Sept as expected, for Q3 to easily beat analysts estimates and then Q4 will be sitting there even better. Looks like from the price closing at $2.30+ today that others finally figured it out too. I predict this puppy over $3.50 after Q3 and over IPO prices of $5 after Q4.
It won't be long before they start to announce those 5-6 new contracts per quarter in pr's. They take about 6-8 months from signing to manufacturing then are announced. As such, those 6 deals they did in Q1 should be coming soon. Even better, this may become a regular quarterly habit if they keep winning proposals--ex. 5 in Q2 that will be announcing in Q4 or Q1. Layering of revenue......I like it!
Thanks again :)
It's good they think the stock is worth more than $3. However, they better not be holding off on taking on more employees right now because they are expecting delays in orders from AT&T and T-mobile for the rest of 2019. They alluded to visibility being tough, but does that mean no orders in Sept or Oct? I wouldn't think that, but I don't understand the lack of hiring right now if they are 3 months behind on new product introductions.
If backlog is drained down when Q3 is reported than that $500K share buyback will not hold the stock up imo.
They have 5 weeks to close on US deal or international to get orders to make Q4 decent.
My question is why are they doing a share buyback when they aren't hiring right now? I've been looking at this lately and they are running no current recruiting ads for anything. From the cc call Arthur made it sound like they are desperate for engineers (esp since the new products they need for sales are 3 months behind in development), need sales people for U.S. Tier 2, and pr and marketing people. Yet here's a screen shot of their Linkedin page. It's been 2-3 months since they reached out for engineers. I'd think spending their cash on this would be more important than lowering the float down even more. It'll just create even more volatility in time.
Linkedin Polar Power job listing
page 1: https://snipboard.io/gDtw7a.jpg
page 2: https://snipboard.io/pa8x0A.jpg
I need a break from this investment. Wake me up when news comes out cause nothing else seems to being good for it. With the slow price down and down I'm tired of thinking about it.
as I said before, the DSEI show is Sept 10th. POLA is connected with some military product there that is hybrid in nature and using their generators, software control system (and perhaps batteries). I hope it's something new that investors haven't heard of before. It's got to be something that uses their generators in a way that has appeal on a worldwide basis otherwise why show in London?!?
It'd be nice if it became more of a "trading" stock going forward with the increased volume. It was once like that. Go back 2 years when it was in the $8+ range. It easily did 50K+ shares/day.
Even if it's just computer algorithms playing with it now for the most part (plus say 1 panicked seller today), any good news means they are sitting there ready to play the game to the upside.
The reality is this may not be a $7+ stock in a sustained move. Too much depends on Arthur actually performing and does anyone really trust him? However, it may be a $3.25 to $4.50 back/forth stock multiple times going forward. The story and the demand is there enough to draw in investors again and again. Heck, if you were bold enough you probably could short it on the top too and play it from both ends.
Usually when you reach the ultimate worry stage, the worst of it is over. Perhaps it is now? It's $3.22 x $3.28 now.
My bet is an institution was actually buying today. I could see those that have followed POLA (and may have even sold higher) looking at it again at this price. The risk vs reward has swung nicely.
I say this because I watched the trading closely. Ex. At one time there was 2000 shares on the bid at $3.26. 8000 shares sold there at exactly $3.26. Imo, this is not a computer buying. They usually "step in front" of trades by going say $3.2605. Also, I don't think it was an individual buying as they'd have their full share count sitting there obvious on what they wanted to buy. Imo, it's an institution that had a buy of 2000 shares sitting there with a trigger trade that is if part of the shares are filled it then triggers more buying available at the same price.
I think it's a combination of an institution selling and computers playing games around it. It's probably like 1/4 institution and 3/4 games in volume. Imo, it'll end soon enough and the moment the selling pressure is gone the price will bump up. One plus is there seems to be a lot of support now at the $3.25 - $3.30 level.
The big thing going forward is their new products as it's key to locking in international and solidifying US sales. I think a pr around the DSEI show on the software control application (and possible Lithium Battery systems since the CEO said it was a hybrid system they were dealing with) will be very helpful in getting people to believe again at some level.
Also, the close today is just computers. I wouldn't read much into it.
I was able to pick up some shares with my bid at $3.25 earlier today. These aren't for "long term buy/hold". They are for flipping when news comes out and the stock shoots above $4. I will get some more in the days ahead.
I'm counting on a pr related to the DSEI show on Sept 10th.
one news event and the stock jumps $1. I still think plan B is an option----average down and flip later if need be. If they closed on a $7M order at the end of Sept with T-mobile like they did last year (though I think more would be better) or just one international order (to show the pipeline is viable) then the stock would do like it did after earnings (and before the cc call)......jump fast and hard.
Sept 10th-13th: POLA has their own booth at DSEI show in London. It's the biggest military show in the world. They certainly aren't showing off their telecom generators. They said in cc call they are debuting their application software with some defense hybrid product with a partner. It must be something worthwhile to go to London for 3 days and put in a booth. You don't do that to show off a software application.
Of course it could just be with one of the Army SMET partners and one of their vehicles, but I'm not sure why POLA would have their own booth. They also did some kind of trailer/hybrid battery system for the air force back in Q1 or so they said. It may have been delayed till now?
I point this out since I'm not sure the stock does anything till news of some kind comes out.
ebase...I don't expect a response. It was a well thought out note, but I also tossed in a bit of a snide comment in it. I felt the need to vent. Anyways, the note gives them something to think about and emphasizes the need for clearer communication going forward with investors.
I actually wrote both the IR guy and Arthur in the same e-mail today. What do I care what they think. If you want to be the CEO of a public company than be ready to be criticized.
It just hit me on why they may sound like they are so bullish but investors are shaking their heads in frustration........has AT&T done backup on their Firstnet towers?
Firstnet is the biggest upgrade of systems in the US now. In this billions of dollar move for first responders, AT&T is also setting these towers up for 5G (or 5G LTE at least) as they go along. They are saying they are 60% done with Firstnet now. They are saying they don't have to climb these towers again for the future 5G. Just google it as there are multiple news articles on it.
Yet, Raj said that Firstnet was just starting in Q1? This made zero sense and sounded like pure POLA bs as Firstnet upgrade on tower systems has been going on now for 15 months. Then Arthur does his 2Q comments about partners aren't sure of the backup power sizes they need for 5G.
Here is my point...........What if AT&T hasn't done backup on these towers yet and just did tower work with equipment and wiring? That POLA hasn't missed out on 60% of the deal, but that it hasn't even really started yet? Then it makes more sense. Raj's statement in Q1 is correct. Arthur's comments are correct. There is a real possibility they could capture a big portion of the future.
I asked both of them this question. I said if it's true, then they have done a piss poor job of telegraphing this to investors. The reality is if they can't capture Firstnet then it's foolish to think they can get more of 5G backup at towers. If you can't capture in the US, then you won't capture international. This is why there are no buyers right now of the stock. The Roth Captial analyst was stunned with Q2's lack of orders---especially since Firstnet is going on. However, if AT&T hasn't done backup yet, then it makes sense on what POLA is saying about a strong future. The game is still wide open for the taking. The real problem is that what they know and investors think are two different things. I said if this is true then I blame them both for the poor communication and that they need to correct it.
I wrote them both in the same email so if what I said is true, then they can discuss it going forward concisely rather than their mumbled jumbled potential story that makes no sense.
Do you see my point about quant computer traders? The spread now is $3.45 by $3.90 and only 1000 shares have traded. Yesterday 35K+ shares traded and it closed at $3.30 yet today there are no sellers? This stock is being played big time by computers. The truth is that the big stocks are played by so many quant computers that they have now rolled all the way down into the low-float microcap world to find open opportunities. Nothing is really investing anymore between two real people.
Interesting note from 10Q:
They finished the quarter with $4.08M in finished inventory. This is up from $3.2M at the end of Q1. It means that the plant actually did $10.0M in quantity, not just $9.2M.
Normally I don't like inventory building too much, but it seems to be a key here for them in getting orders. They have $4.0M they can send out the door pretty darn fast if something big comes in.
Most likely this will be even higher come end of Q3. In the last cc call Arthur mentioned having like 400 NG engines available. It means they could turn around and ship out on an international order pretty quick once the engine is available and the new application software has debuted.
Q3 estimates. I listened to the cc call again rather than read the transcript (which often has errors). In the cc call Arthur says 95% of the backlog will ship (vs the 55% the transcript said). It's clear. Raj then says "greater than 90%"---similar to 10Q.
Backlog is $7.7M. 95% of it is $7.3M.
In 2Q they did 15% of their business in non-telecom = $1.32M. The lowest quarter total they even had for bookings was 2Q at $2.4M. I will estimate they get $1.0M in bookings from misc, international demo units, marine, military, etc.
Q3 = $8.3M. I think that's a fair number. Any thoughts?
Q2 margins were 32%. I'd think that would be similar. Sales may be $1M less, but the plant can run more efficiently.
Q2 Expenses + interest = $2.39M. I'd say $2.4M for Q3.
No taxes.
$8.3M x 0.32 - 2.40 = $256K = 2.5 cents/share.
Analysts have them at $8.5M and 3 cents/share.
AS SUCH, if they ship most of the backlog and scrape together just $1.0M in additional orders, Q3 isn't some kind of horrible disaster. It's just a set back.
The key is can they do this plus:
1. Get orders already on the books come the end of Q3 that excite investors.
2. Debut the new software application in Sept. And debut the NG engine internationally (they said 1-2 months which is still before Q3 earnings report).
3. Get any international deal done at all. Arthur said they were very close on several deals and the software application is the key element. Can the close a deal after it debuts?
Yes, there are a lot of "ifs" here. However, the stock is now trading for disaster and I don't think it's the case. The stock could easily be in the $4s on any good news.
Long term.....the #1 important thing is can they start doing $9+M/qtr in U.S. Tier 1 orders in 2020? We won't know that till the next round of orders come out in late Sept, Oct or Nov like last year. With a base like that, then everything they generate---Tier 2, international, NG residential, military, etc is the true reward for shareholders.
You figure in 3 quarters they will have done $7.7M (Q1), $8.4M (Q2) and probably $7.3M in Q3 from U.S. telecom. It still sounds like they are bullish here. Can those go to $9M or more next year? $10M? Can they get Verizon back?
There may be a seller or two right now, but a lot of this trading that is happening is quant computer related imo. Even POLA's IR guy mentioned that they have quant traders involved (i.e computer that only care about earnings & momentum and don't know squat about the company. It trades off of algorithms). You could see it earlier today. The bid was in the upper $3.50's. Ask was in the $3.70s. A couple of small trades went off on the ask and for a moment there the bid was in the upper $3.60s and the ask was all the way to $4.29! There wasn't a single individual or fund sell order sitting there. Then, a little while later, $2000 shares went off at $3.56 so. Less than a second later the bid dropped to $3.35. All the "support" that was showing underneath the bid just a moment ago disappeared.
This is why the stock went up $1 in the last 3 minutes of trading last Monday. There are almost no permanent sells sitting out there. It's just computers bouncing things around seeing what they can entice others to react on. I'm not saying it's not real trading. It is in that shares are getting exchanged. However, it's not necessarily from individual to individual, but from computer trading firm to computer trading firm.
If POLA put out any good news and individuals or firms roll in with bid orders, then the computers will follow the momentum. Especially with this being a low float. The stock will jump into the $4s quickly.
I haven't done it yet, but it's why I'm thinking of averaging down. Yeah, I like this long term, but if I can get my average down enough I can always just flip out on a short term boost in price and volume.
I'm surprised one of the international companies isn't interested in them for the U.S. market.
POLA has a booth at the huge DSEI (defense) show in London from Sept 10th-13th. On the cc call Arthur mentioned that they will be showing with some other company a hybrid system (that will then debut their software application that oversees the generators and batteries).
https://www.dsei.co.uk/exhibitors?&page=3&azletterfield=title&azletter=P&searchgroup=00000001-exhibitors
ebase...Shawn is very much on top of the company and the markets available. I've corresponded with him by email before, but this was the first time by phone. I was impressed. He truly understands the value that could come from 5G worldwide. He also knows how frustrated investors are as it's too much talk about potential and not enough results. As he said, if they could sign just one international contract than it would do wonders for trust with this company and management. If you saw the latest institutional #s, they Perrit Capital Management (a microcap fund) sold 1/3rd their holdings in Q2. I mentioned this to him. He already knew it. He said the thought is they sold out part of their holdings as they grew tired of the international delays. It's why he said if the company can succeed there at any level to show it really can happen, then buyers may roll back in after that. That's why I made my comment about straw into gold in my other post if IR had something real to work with.
He did give an explanation on the cc call better. The big thing is that AT&T and T-mobile have been giving only limited visibility short-term lately. In other words, he said POLA could be offered a large contract 4 weeks from now and they wouldn't know it right now. However, long term the companies are giving good visibility on what they intend to do with backup power over the next 2-3 years. It's why the company said the story is sound long term, but how Q3 ends and Q4 starts is unsure.
I hear they aren't dropping their IR firm, just going to add a pr person to the company on top of it.
I did talk to the IR guy yesterday. The guy could probably turn straw into gold if the company gave him something concrete to work with.
Follow up on CEO communication. I wrote him again today and got a response. Three things:
1. On my continued comment on delays in international........He believes that all international sales issues are solvable with more support from HQ and engineers.
2. I told him that I know he doesn't control the stock price, but he does control the message that is told to investors. He said he understands. They will be dropping their IR firm going forward and, as said in the cc call, be bringing in a pr person for better communication with investors and then with marketing to customers going forward (I assume this is more with residential market if it ever arises).
3. If I or anyone I know is in the area that they are welcome to come by for a visit.
The crazy thing is if they didn't have a cc call, this would be at $5+ right now. As such, if they can actually make this thing work out going forward, it wants to jump. As I said before, it may not even need results to do it, just anticipation from new products and more Tier 1 orders.
Wadirum1... I'm starting to think your idea from before has merit, namely, buy in the mid $3s or so and then sell out on moves up. There is concern about Q3 and Q4 obviously, but there should be enough pr's coming out on new products, Tier 1 orders (end of Sept) and international orders (if/when/maybe) to bump this thing up into the $4.30 range or so and flip out.
Perhaps all of us just need to use our knowledge to flip shares and make the easier money and get back to even/small profit and call it a day vs hoping the company goes to $6 or more going forward.
I actually wrote the CEO Arthur Sams today and got a response. I agreed with you in that Tier 1 U.S. telecom is essential at this point and wanted some clarification. I asked:
"Do you think you can capture more of the U.S. Tier 1 market share in 2020? I know you can't give specifics and you probably won't even know for sure until deals are done, but in general have indications been made that these companies are pleased with what you have done with your production capacity and are hopeful to get more of your product going forward?"
I actually had never emailed him before. I got his address from an SEC filing.
He responded. Here is what he said:
"Thanks for your letter.
I have a few features on product upgrades we are engineering; I feel the new feature developments will get them excited.
We still need to work on lowering cost and shorter delivery. I am close to reaching my objectives here.
We will also have to increase our engineering sales support.
Answer is yes."
Also, on your question on short term orders for Q3.....I don't know. I did see in 10Q where close to 15% of orders in Q2 were not from AT&T and T-mobile. That was approx $1.3M. As such there are other things happening at some level. I think the concern with Q3 may be a bit of an over reaction. In the 10Q it shows they do have enough finished inventory to ship if orders do come.
Part of me is wondering how much downside is there at this stock price level? I don't think it's much. The company isn't burning cash or anything, just dealing with delays, but the long term seems solid. I've been giving thought to averaging my share price down quite a bit. Not to double up for the long-term, but more to get my cost basis down to unload if I want to. I say that because in the next few months they will definitely pr new products (software application in Sept probably, Lithium Battery systems, NG generators), international orders (hopefully), and some levels of orders from U.S. tier companies at some $ amount--most likely at 2018 levels at least and hopefully more. The odds are some of these will hit before Q3 results in 3 months. This is a low float stock that could easily bump up to $4.40 or so. I was thinking maybe I'd just just lower my cost basis, just waiting for a bump and sell out and not even deal with Q3 or Q4.
The 90% number for backlog to be delivered in Q3 is in the 10Q.
ebase....it's why I say the #1 thing going forward is what do T-mobile and AT&T (and Verizon) do in terms of their ordering for Q4 and 2020 coming forward in the 2nd half of Q3 and Q4. If the orders they put in to POLA are larger than last year, then you know that management can't screw it up. They truly bungled the cc call in that they didn't emphasize the only way they ramp up those deals is to draw down backlog and show these Tier 1 companies they can do a lot more business.
People forget that backlog in the middle of Q3 last year wasn't a whole lot. It ended the quarter at over $11M or so. By the end of Nov it was over $18M.
ebase22.... The big things between now and Q3 report in 3 month is:
1. Can they get anything going internationally? They obviously are getting companies to listen to them since they mention 20 countries and their products, but can they get these companies to sign the paperwork? One pr on some success here could really boost the stock as it then becomes apparent that things are going to take off.
2. What will the T-mobile order be at the end of Q3? If you remember, they did their large order then for approx $7M I believe? On the cc call it sounded like they expect a similar time frame this year. Can they grab more marketshare for the future since they can now deliver units quicker?
Then comes the same question on AT&T. Can they get orders again from Verizon? I realize that no one likes the margins of Tier 1 US, but the reality is there is a real demand here for the next 2-3 years in getting ready for 5G and it'd be nice if POLA was able to do $10M/qtr for 4 quarters each year.
3. How long before it takes them to capture some of the Tier 2 US orders?
We'll know in 1 more trading day = Monday. I'm not sure if them releasing on a Monday means anything (it is odd for them). It sure would be nice if they announced some news in the morning and then turned around with solid earnings in the afternoon. I'd love to see some large volume trade on this stock on Tuesday.
Wish, want, hope, dream, (bang head desk),...........sigh.
Worthy.....there you go---earnings next Monday.
Army SMET update: No final announcement, but with the new budget passed it may happen soon. In the 2020 defense budget $41.3M is being assigned for it:
"The budget request included $41.3 million in Research, Develop-ment, Test, and Evaluation (RDT&E), Army, for PE 65053A Ground Robotics, Squad Multipurpose Equipment Transport (S– MET). "