Knowledge is King....SCKT....1rst Q numbers were $300K less then I had expected. It came from the Somo continuing to decline further then I ever expected. I always thought it'd be around $2.6M as a floor, not $0.6M. That extra $2M lost is what's killed this company for the last 2 years. However, 1rst Q showed that the scanners are going to save them. That alone makes this company worth more than a $5M market cap.
I'm 100% certain that this stock will be become much more popular on iHub after 2nd Q numbers come out. It'll be back on the main mother board for certain. The number they gave in the cc call was extremely conservative imo. It's a "baseline" number with no large deals added in which is ridiculous because every indication is is that a large deal will be happening on top of it (plus the chance of the van line deal occurring also to some level---I know for a fact that Unigroup/United is pushing the Fasttrack Inventory system as a whole company upgrade). I know that management does not want to discuss large deals anymore on the cc call because they have no control over them and so they have decided to not mention them until they are occurring. They are tired of people constantly asking "what about this/that deal?" during each cc call. They want to under promise and over perform for a change (as they are famous for the opposite).
For inventory tracking, April is starting to explode. I tracked $1.8M of the $1.9M in scanner sales in N.A. in 1rst Q. The first week of April started slow and then "boom" it changed. The CEO mentioned in the cc call that orders picked up recently. I saw it too. It's a pick up in sales of every model at all 3 distributors, not just one item or one distributor. It's like all the POS partners came to life. April is on target to potentially doing $800K in scanner sales by itself if M, T, and W carry the trend for the last 3 days of the month. (The best month I ever saw before this was last October at $687K). Last year May, June, July & August grew sequentially. None of this growth was from the van line either imo (it was what management said too). It's just the partners starting to sell as the POS season ramps up.
I inquired about the new RFID products for the Somo today. I was told that they are upgrading their RFID accessories to the newest standard of HF RFID that does NFC also. The company believes it can put some new life back into the Somo. The products will be announced in a pr early next week. I need to research it some more once they come out and I see the specs. I'm not over excited, but if it could help the Somo stabilize in sales or pick up a bit then it becomes a more worthy cash cow with minimal expenses. That's about all it's good for imo. The future is the scanners for certain.
Management missed the mark 100% on the Somo. However, they seem to be getting the scanners set up really well. Come May 1rst they will all be antimicrobrial plastic to further improve them over the competition. It's sad that the stock and shareholders have had to suffer so much in the last 2 years. However, I keep reminding myself to not be scornful and look at it for what it is.....it's about to become a very solid turnaround play that has a market cap of $5M when it should be trading for multiples higher as people realize that they aren't going out of business but will actually thrive. My goal is to make money and so I told someone today that if I had to suffer emotionally so I could have the opportunity to buy more cheap, so be it if it makes me more money in the end.
If you own any shares, imo, whatever you do, don't sell before 2Q numbers come out. People are going to realize then what happens as sales go up and the profit margins are at 42.8% and the expenses as a company are very low and fixed for the most part. Sequential scanner growth going forward will start to get people excited again (finally).
Dave
