Polar Power Inc (POLA)

[worthylion]

FWIW I posted this on another board:

Q3 another case of "glass half full/empty". Disappointing sequential revenue growth due to disruption of engine supply because of tariff wars. Could management have better managed/diversified supply chain? Who knows but on their CC several analysts spoke to similar disruptions at other companies. In any case, they said the issue is past now, and their production is back on a good track.

On the bright side, in part because of fewer deliveries in Q3, their backlog at November 9th was a whopping $15.2 million most of which they implied on the conference call would be delivered in Q4 (in addition to Q4 deliveries up to November 9th). So Q4 revenues should be huuuuuuuge at +$10 million--by far the largest in the company's short history.

Given increasing costs because of expanding production, product development,international sales, fluctuating gross margins and possible year end bonuses, Q4 EPS are difficult to predict but, assuming 30% gross margins should at least be .05 which admittedly wouldn't drive the share price. I'm still a big believer that will continue to grow revenues quickly next year even in a slowing global growth environment.

The biggest negative IMO is that we now have to wait about 4 months to hear of Q4 unless they issue an earlier PR. Last year they reported Q4 on March 8th. This is a pretty scary market to initiate a position in a thinly traded stock where there could be no stock driving news for 4 months. That said I bought a little more today at $5.45 to add to my current already sizable position .

I do feel management is committed and capable, but the founder/CEO/majority SH is a dorky engineer who is anything but slick on CCs. One concern I have is that he's mostly focused on building the company and isn't focused on strategies to promote the share price--hence the lack of institutional ownership and low trading volume. He might also be more focused on developing cutting edge products (e.g. solar and NG generators) to go along with his core products than on generating high profits. That said he owns more than half of the stock so should have every reason to care about the share price.