capc .58 I like this company. They are selling LED lighting products thru Costco and Sam's Club. Carry no inventory. Products is shipped direct to end customer in minimum order shipments. Sales are growing fast so company has unused $7million dollar line to finance growth in A/R.
Article states selling at p/e of 6 but that's a stretch. Using company forecast of sales for 2017, writer assumes stable margins and comes up with "projected eps of .10 for 2017." Actual eps for Q1 2017 was .005 so the Q2-4 have to equal .095eps or .0317/qtr.
Besides the vetting that the warehouse clubs perform to make sure they can perform and the products are good, this company has also secured licensing rights to use the Duracell brand for some of their products.
Overhead appears to be small due to the concentrated customer base and outsourced manufacturing. Of course, that means high risk of losing one or both of their huge customers. Also means customer is not going to allow much margin expansion. ~23% gross margins so going to need high sales growth and controlled expenses to make their projected profits.
Stock hasn't moved much and trades an average of 61K/day so decent volume for a microcap.
Q2 sounds like it's going to be an improvement but need to see dramatic increase in eps to make the .10eps annual 2017 profit target.
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