What's not to understand? The company was priced at $2.50-$2.80 based on expectations that it would beat the March quarter. When it fell short, the company was knocked down to under $1.50, when investors thought the growth story was wrong. After our Q&A with Alan, and the understanding that the inventory number probably represents a significant amount of sales deferred to next quarter, the stock rallied back to $1.75-$2.00. It will probably stay in this range until there's more news. A positive 8-K might push it over $2. Another quarter like the last one, and it will probably trade down to $1.25-$1.50. If you believe in the long-term story, that could be another buying opportunity.
The reason I believe in the long-term story is simple: if it makes sense for blue chip miners to use Arcoplate in Australia, then it makes sense for them to use it in Canada, Brazil, the U.S., and everywhere else. The Australian sales demonstrate the product's viability, and the lack of sales in the rest of the world represents a huge potential market. Once that's tackled, the 3-D cladding system is a natural cross-sale. After all, if it makes sense to use Arcoplate on your bulldozers, it makes sense to use the same material on in the inside of your pipes and chutes, etc.
