Savvy Trades and Investments

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Does QBAK look super attractive here to anyone else? Stock popped up to the low $9's a couple days ago on a great report. Now sliding back near $8. I'm a buyer again and would love to get some even cheaper.

QBAK reported a surprisingly strong Q2 with earnings of .23/share vs. .03/share last year. Q2 revenues up 43%. Awesome balance sheet with $2.65/share in cash. With that combo of growth, earnings & balance sheet...QBAK could rise 50% from here and still be somewhat undervalued imo.

I wasn't expecting Q2 to be so good since there wouldn't be much Sony development revenue. They developed an Optical Disc Library product together (first announced in December 2017), which QBAK will now manufacture for Sony. Not sure if they've started manufacturing that yet or not, but I'm guessing that will provide another boost to revenues & earnings when ramped up.

The CEO sounded more bullish in the Q2 earnings PR than the Q1 earnings PR:

“We are extremely pleased by our strong financial performance and the foundation that we have in place. We continue to experience strong momentum in our Data Storage business unit,” said Steven N. Bronson, CEO and President of Qualstar. “We also continue to explore external growth opportunities,” Mr. Bronson stated.

Full PR:
https://finance.yahoo.com/news/qualstar-reports-fiscal-2018-second-131500366.html


QBAK shot up over $13 in February 2018. Since then they've delivered 3 excellent quarters in a row. And the stock is at $8? Think only a matter of time before this low floater gets another run to double digits. Could happen in the coming days/weeks with that terrific Q2 comp sitting there. I'll be accumulating.

Also of note in the 10Q this week is they're expanding internationally to Europe & Africa. At the end of the Overview section of the 10Q:

OVERVIEW

Qualstar Corporation and its Subsidiaries (“Qualstar”, the “Company”, “we”, “us” or “our”) manufactures and markets data storage system products and compact, high efficiency power solutions. Our data storage devices include highly scalable automated magnetic tape libraries used to store, retrieve and manage electronic data primarily in the network computing environment. Our data storage devices include models ranging from entry level to enterprise and are a cost-effective solution for organizations requiring backup, recovery and archival storage of critical electronic information. The distribution channels for our data storage devices include resellers, system integrators, and original equipment manufacturers (“OEMs”). In addition, the Company is a leading provider of standard, semi-custom and custom power solutions marketed under the N2Power brand. Our power solution products provide OEM designers increased functionality while reducing thermal loads and cooling requirements and lowering operating costs. Our power solution products are currently sold to OEMs in a wide range of markets, including telecom/networking equipment, audio/visual, industrial, gaming and now medical with our new product offerings.

The Company is focused on expanding sales in both business units in two key areas: adding key customers and expanding its product portfolio. The data storage business is adding more strategic partners that will expand our geographic footprint and increase our reach to additional industries. The power supply business unit is expanding its customer base in specific market verticals, such as the gaming industry. In addition to adding new internally designed and private label products, the power supply business is focusing on providing value add services in establishing itself as an optimized product development manufacturer (OPDM) for current and future new customers. This will allow N2Power to act as a one-stop shop providing solutions for more complex power assembly units and chassis solutions for their OEM customers.

The Company continues to expand its product portfolio through internal development, private labeling and establishing worldwide partnerships with other power supply and data storage related companies. These new relationships will increase our product development engineering capabilities and help us stay at the forefront of both the data storage and power supply industries.

To facilitate the Company’s international expansion, on July 4, 2018, a wholly-owned subsidiary of Qualstar Corporation, Qualstar Limited, was created to operate the Company’s data storage business in Europe and Africa. In conjunction with the entity’s formation, Qualstar Limited has hired a seasoned sales team member in the data storage industry to support and increase the Company’s sales activity in that region.