My take after latest conference call and investor presentation...
My rant from previous post...#15:
(....However, in the meantime, ipwr is clearly in a downtrend, so my buy is at the low end of the descending channel (already have a few shares...would like to see an uptrend begin, even if I have to buy at a higher price later on).)
Has ipwr finally broken its long (almost a year), demoralizing downtrend?!? It would appear so Jim. One can only hope that this is the start of a multi-year Bull run for it... If revenue continues to accelerate...and it can find its way to their bottom line, as mngmt seems to be focused on, then the prospects are pretty good.
Did I buy more? Yes I did, picked up a few hundred more...and I did pay a higher price for it.
Score: A+. Downtrend broken, and on increasing volume too...I am told this is a good sign.
(The key milestones I'm looking for:)
(1. Revenue continues to improve fairly significantly each and every quarter this year.)
Well, mngmt announced q1 revenue would come close to ALL the product revenue recorded in 2014...and seemed to indicate that it would continue to improve throughout the year via new channel partner announcements coming up, and larger orders they are expecting from their existing customers. They also announced keeping a record of backlog...now just over 2 million, which will be converted to revenue within 6 months. Bottom line, look for a revenue increase of AT LEAST 400% this year...although lets be realistic. The 1.2 million in revenue recorded last year was pathetic, so an easy bar to clear. If I see simular gains in 2016 I will begin to be impressed. However, they had to start somewhere...
Score: C if they only record 4 * 1.2 million =~ 5 million this year.
B if they record 7
A for 9
(2. Gross profits on revenue, which they indicated should happen no later than Q2.)
Well, mngmt is sticking to this story, and why would they stick their necks out like that unless they could deliver?
Score: A for Q1 positve gross margin, B for Q2.
(3. Their new transistor is ready to be incorporated into their existing products no later than Q4, hoping for Q3 though.)
FAIL!!! On their 2014 Q1 CC They indicated switches were already being fabricated, with talk of a prototype ready for testing by end of year. NOW they are talking computer simulations blah blah, and they have fabricated these new transistors based on these simulations. You can simulate Santa Claus on a computer too. This upcoming prototype will be CRUCIAL. Now mngmt is saying prototype later this year, with heavy testing into next, before ready for prime time. My take away, this new transistor is KEY, as they indicated in their latest investor presentation slide show...the total addressable market increases over 30 x IF they can pull this off. They have a nice little, (and fast growing) niche market right now, but as mngmt indicated...even for this market, this upcoming transistor is KEY to long term gross margin protection. Cross your fingers kiddies, lets all hope its just more difficult than mngmt initially envissioned, but ulitmately doable.
(4. Mngmt guides to bottom line profit by Q1 of 2016.)
They have not done so yet, but too early in the year for such a bold prediction.
Grade: Pass
(5. Some new channel partner announcements this year, hoping no later than by Q3.)
They have already done so with Boeing and Gexpro, more on the way indicated by mngmt.
Grade: A+
(6. One or two new product announcements this year, one in the first half, one in the second would be nice.)
Announced 50/60 Hz and microgrid forming capability software upgrade for all products. As this geographically expands their product line...I will count this the same as a new product. Though I still expect something in hardware before the year is out.
Grade: A, but becomes a B- if not followed up with something else this year.
Overall....Pretty good.
They seem very focused on the bottom line...i.e. getting increasing revenue to a positve EPS asap. I like that.
Hope this new transistor pans out as they hope...if so, believe they might go for the "EV Traction" market...i.e. the conversion market between the battery and the motor in TSLA type vehicles, as I noticed how this had the fasted predicted CAGR.
