Replies to post #45158 on Savvy Trades and Investments

[SSKILLZ1]

OPXS

In fairness OPXS would of been profitable if you ex out that warrant stuff which I always do. I don't own it, but in my mind they were profitable based on my first glance look, and operating income was way up from last year this time. Not that I won it or know the company well enough, but just thought I would mention the reason why they loss .01 was because of the warrant stuff. All is just my opinion, and I could always be wrong though.

[larrybaz]

OPXS - Good catch on the dividend going away. Hopefully they feel they have better uses for that cash. They actually posted 4 cents of operating earnings.

I like this blurb from the Q:

We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given our improved earnings performance during fiscal year ending October 1, 2017, and our anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed.

[littlefish]

It wasn't good, it was terrific. Think that may be their best quarter since going public (for the second time) in 2009. I'll try and color in more later. Look at op income not net (net gets distorted by the deriv liabs which fluctuates with share price but IMO isn't really a liability for us little shareholders but could make it tougher to sell the company).

Backlog has always been lumpy and can fluctuate a lot Q to Q but they have over $5 mill scheduled for next Q and that should give time for the commercial side orders to pick up (commercial has some seasonality IMO). Plus the govt passed a 2 year spending bill that should loosen up their main defense customers in say 8-12 months as lettings flow thru to prime contractors and onto Optex eventually.

Glad the div stops since warrants were getting paid. Now if they can see the light of a buyback I'll be real happy with them.

All IMO only. Good luck.

[littlefish]

Mandjb, hang in there if you own some. This is the first inning IMO. Results could look much better in a couple years and the most important wording IMO in the Q was this (although there were easily half a dozen positive nice tidbits to be found for those that don't gloss over or skim).

" We expect the gross margins for both segments to continue to improve throughout the fiscal year as revenues grow and labor efficiencies continue to improve on the Applied Optics Center optical assembly line and the product line mix on Optex Systems shifts toward newer orders with higher pricing."

They have been far from perfect calling margin improvement but that last line is where things look more concrete to me going fwd slough there are always chances for lumpiness with small companies like this.

Considering they got almost zero backlog from their commercial, that IMO means we should see elevated backlog build in the coming next couple Qs from that. And with the budget passed, we could start seeing more newsworthy contract announcements. Remember, last year's Q1 had 4 sizeable contract announcements compared to zero this year yet Optex still had $3.6 mill in new orders even without much of any help from AOC commercial (that should pick up soon per the Q report IMO).

Tons of stuff to go over about the company but don't have time and this story should develop more fully as 2020 approaches.

Here's a little blurb on the company. I completely disagree with their valuation of the company for various reasons but it does show a little ballpark pricing info on stuff like tank periscopes.

https://moiglobal.com/optex-systems-nano-cap-provider-of-optical-sighting-systems/

There's tons more but I don't have time right now.

This is the very beginning of a meaningful turnaround for them IMO. Much like SMID in Q1 2016 where they laid a GM egg but then started working into better priced contracts over time after surviving a major long term downturn, I think OPXS is in a similar position just getting started that will slowly develop with time IMO.


All IMO only. Good luck, I hope that wasn't you selling right at the Q filing time.
OK got stuff to do, have a good one.