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Beacon Enterprise is starting 2010 off with a bang. This is one of the few domestic stories I've heard that's really exciting. When I first reported on the company it was a technical disappointment price wise, but it now appears this mess has been cleaned up, and the stock could be ready to climb the charts in reflection of what the company is achieving.
As a refresher, here's what the company does. They pave the corporate information super highway so traffic can flow for the huge enterprise systems. You start with a giant company that has thousands of employees in hundreds of locations around the world. The company wants to use technology to streamline its business- communications, order flow, design- whatever. They systems are available, but the company might not have the infrastructure in place- the buildings simply don't have the proper cabling, design, or networks to use the technology that's available.
Enter BEAC- they pave the company's information superhighway, and there's virtually unlimited demand for what they do. To prove their point, FY '09 audited numbers were released today, and the company is on track to deliver as promised.
As I predicted in my original presentation, BEAC delivered over $10 million in revs in FY'09, which ended at the end of September- hence the timing of the release.
Since the year end a mere 90 days
ago, BEAC has only booked about $50 million in new contracts-
that's all. If you want the latest update, Read On.
BEAC delivered $11 million in revs in FY'09- almost to the penny what I projected the company would deliver. Net sales for FY'09 were up a whopping 89% over '08- $6 million in revs to $11 million. And, as I suggested in the first presentation, BEAC continued to lose money; but not for much longer.
On the Q4 numbers- the top line was up almost exactly 100% from $2 million to $4 million. Losses continued.
Now the fun begins. Q1 of FY'10, which is now over, is the first quarter for the company working on their new $50 million in contracts. Of the $50 million, $27 million is coming from the venerable, Johnson and Johnson (NYSE: JNJ) and $24.8 million is coming from an undisclosed European data provider.
Therefore, I believe there's a good possibility Q1'10 could be their first profitable quarter, and the company will never look back from there. There's two other major positives to cover. First, according to the SEC filing, there were 28.3 million shares I&O on BEAC. This means they have funded their losses with minimal dilution and kept the market cap at a level where the company can justify much higher levels for the stock price.
Secondly, the chart finally looks strong. This idea was problematic in the early going. On the chart, you will see the action in the stock on the first day I covered it. It also coincided with BEAC announcing their second $25 million contract in as many months.
That day we had triple the highest volume in the stock's history, but the price actually closed down some on the day. After about a month of grinding through some additional supplies, the stock finally started behaving better, and broke above the $.90 resistance level.
I subsequently learned there was one large seller - an early financier. It would appear this particular seller might have run out of supply, and the stock is positioned to trade up far more freely. At $1, the market is suggesting the company is only worth $28 million. BEAC signed $50 million in contracts in CY'Q4. This stock is worth at least three times the current price in my view.
Tomorrow morning at 8AM Pacific, 11AM Eastern, management will hold a conference call to discuss year end results. To attend, call 888-945-3916 and entering conference ID # 49072624, or 706-634-7530 with the same conference code.
This stock is going higher. My big three: CEU (up 14%), CREG (up 71%), and NFEC (up 150%) are all hitting new multi month highs and we're all making a lot of money on them. I picked BEAC at $.93, and it closed today at $1. That's only 7.5% so far since November 11. A nice annualized return my some standards, but just a beginning by my standards.
BEAC could be ready to break out. If you haven't done so already, take your position now.