Microvision Inc (MVIS)

[DueDillinger]

MVIS, Poised to Deliver Explosive Unit Sales Growth, Earnings Call 3/8
Mar 4, 2010

MVIS (position, Long) is expected to deliver positive product announcements and progress towards strategic mobile phone OEM distribution agreements that could lead to positive revenue and earnings growth and cause the stock to appreciate on and after its 4Q and full year 2009 results conference call on March 8, 2010.

MVIS, Poised to Deliver Explosive Unit Sales Growth, Earnings Call 3/8
BAM, San Francisco, 3/4/2010

On March 3, 2010, MVIS announced its 4Q and full year 2009 results conference call on March 8, 2010 at 1:30 p.m. PT available at [phone] passcode: 87213505 and on the Internet at www.microvision.com/investors.

We own MVIS and are looking to acquire more. MVIS is poised to grow rapidly as many of the hurdles to strategic distribution of its products have been eliminated.

MVIS, Growth from High Quality Laser Projector, Poised to be Embedded in Mobile Phones

MVIS produces small handheld and embedded laser projection devices. Barriers to unit sales including product development and availability of key product inputs have been eliminated and the company is now poised to announce a deal that will cause high sales and earnings growth.

In the past, MVIS has had focus issues and technology input supply issues. Earlier product versions required focusing devices. Furthermore, the green laser input required for the product, supplied by Corning (GLW), has recently become cheaper and more available. Osram is a potential second source the green laser, improving availability and pricing for MVIS.

Today, MVIS sells and delivers handheld laser projectors of superior quality to the competition at competitive prices. Now that product, input availability and cost barriers have been eliminated, MVIS is poised to deliver an enormous increase in units delivered.

On February 12, 2010, MVIS’s laser pico product won best in show prize at Macworld in Moscone Center in San Francisco. A strategic deal to embed its laser projector devices in mobile phones would result in high sales and earnings growth, which would cause the stock to appreciate rapidly.

From CeBIT, the globe’s largest technology conference, Hexus, a technology review web site, presents this quick, easy and fun video demonstration of MVIS’ Intel powered “gaming gun controller” technology.

We are looking for the stock price to increase quickly as an actual release of an impending deal nears.

Other avenues to increase unit sales include other companies’, including MSFT’s, experimentation with MVIS' PicoP Evaluation Kit (PEK) to test the LASER projection engine.

In short, MVIS is at the nexus of product and technology development, customer demand and position to meet that demand. We own the stock and are expecting a strategic announcement in the near term and positive milestones to be discussed on the upcoming conference call on March 8, 2010.


MVIS, Earnings Expectations, Meeting Milestones Drive Stock, Unit Sales Growth Soon

Yahoo reports one analyst with expectations of $1.12 million in revenue for December quarter and $3.98 million in revenue for the 2009 year. EPS expectations for the same periods are a loss of $0.11 and a loss of $0.54 per share. Going forward current 2010 estimates are for $19.17 million in revenue and a loss of $0.39 per share. More importantly, on the March 8, 2010 call, we expect news on product shipments and potential strategic deals that will drive the stock.


MVIS, Buy, Based on Expectations of Greater Unit Sales and Profitability

MVIS is a stock we own and we expect to grow our position. We expect that with green laser availability, recent product developments and end customer demand, MVIS will soon announce a distribution deal that will deliver exponential unit sales, as well as revenue and profitability growth, causing the stock to appreciate.


MVIS Important Information

BAM Position: Long

Investment Thesis: Expect stock price appreciation based on financial improvement from sales increase due to nexus of input delivery, technology development and end user demand.

Corporate Facts: Headquartered in Redmond, Washington with 165 employees and founded in 1993.

Valuation: 77.8 million shares, $2.50 price per share, $17.8 million in cash, $0.6 million in debt equals approximately $178 million in estimated enterprise value. MVIS has approximately 7.0 million outstanding options, which are excluded from estimated enterprise value computation.
Cash flow: Cash burn approximately $5.0 million per quarter. Three quarters of cash remaining, before refinancing or increased operating cash flow required.

Disclosure: Long: MVIS
Themes: Technology, gaming, consumer electronics, mobile phone technology Stocks: MVIS, INTC, MSFT, SI, GLW

This post has 1 comment:
SailorMike

Comments (2)

We hold Microvision Long. The company has overcome many obstacles in its long history. Most investors are focused on the retail end of Microvisions operations and equate profitability with success and PPS valuation. We believe that this is a fundamental mistake. Microvisions real value is in the patents that it holds. Microvision has patented their projection technology from the electrical output of the battery all the way thru their device to the end result on the screen. Microvision is listed number 17 in the world for high tech patents. None of Microvisions current competitors are even rated on this list.

What this means is that anyone trying to duplicate Microvisions process by another means will always run up against a Microvision patent which will prevent them from achieving the same excellent end result that Microvision has displayed.

This technology is a total game changer. Everyone from Microsoft to Apple, just to name a couple, is moving to this form of display format. The old form of display format with a fixed dimension screen will soon be found only in a museum.

The applications for this technology are endless and the surface has only been scratched. It should be remembered that, at the point AT took over the company, there was work being performed on 35 different projects. These projects ranged from wide screen television sets to the current projector now being ramped up to full production. AT stopped research on these projects in order to focus on the embedded projector, but Microvision will be introducing new products to the market as revenues permit resumption of research into these older projects.

Now back to my main point, valuation. To use an analogy, if you had the blueprints for a space ship (an alien came from outer space and handed them to you) and you had proof of concept, would the value of your space ship blueprints be based on the number that you had produced and sold or would the value be based on the potential of said space ship?

It is the potential value of the patents that make Microvision a prime buyout target for companies like Microsoft and Apple and just about any other information format application, including cell phone manufacturers and service providers. When it happens, and it will, the offer will not be based on current sales or the bottom line on a spread sheet. The offer will be based on future potential of existing patents. Since we have only scratched the surface for applications, it will be hard to put a number on the valuation, but it will be much higher (by a huge factor) than today’s valuation of Microvision which is based on the bottom line and current profitability.

If you had bought 10,000 shares of Wal-Mart at its inception, you would be a millionaire today. If you are holding 10,000 shares of Microvision today you will be a millionaire by the middle of 2011, if you keep holding those shares. Don’t let anyone con you out of them for a couple fast bucks. Best of luck to everyone. See you in Costa Rica.

http://seekingalpha.com/instablog/546429-xbroom/57284-mvis-poised-to-deliver-explosive-unit-sales-growth-earnings-call-3-8