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There's a new Blog entry on Virtra
Systems (OTC BB: VTSI) which started coming up off the canvas after
about an 8 count today. As usual, your comments and questions are welcome.
To use the BLOG, simply go
to the home page at www.otcjournal.com
- the BLOG will scroll down automatically on the right side of your
screen. The most current journal entries appear in the middle of your screen.
Check back frequently for updates particularly when stocks are moving to
overbought or oversold levels or in volatile markets. Your questions and
postings do not automatically appear, so don't bother posting the same
question multiple times. I personally go through to moderate and respond
to every question.
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NetWork Installation
(OTC BB: NWKI) Loses Dreaded "E" |
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NWKI reverted to its old ticker
symbol yesterday and began trading again under its normal symbol. The "E",
which was placed on the stock symbol for about two weeks, signified the
company needed an extension of time to file its year end audited financial
statement.
As covered in previous editions,
NWKI
changed
auditors at the end of February, and revamped the method by which it books
its revenues to more accurately reflect the true financial condition of
the company.
Heretofore, NWKI booked its
revenues by the "completed contracts" method. This meant the company could
not book a dime in revenues until a contract was completed in its entirety,
despite collecting fees for partial completion all along the way. Since
some of their contracts can last as long as 6 months to a year, we could
not get a true picture of their operations with this method.
In the future, NWKI will book
is revenues on a percentage completion method. Another words, if NWKI
completes 50% of a project, they get to book 50% of the revenues.
Apparently, the process of recalculating
is very complex, and I don't fully understand how it impacted the company's
financial condition. In fact, NWKI's revenues were lower for the
entire year than they were for the first three quarters, which seems impossible.
For 2004, NWKI experienced about $2 million in negative cash flow on about
$2 million in sales. All in all, a weak performance, but necessary to lay
the foundation for the future.
NWKI rebounded nicely yesterday
as the stock began trading without the "E" in recognition of getting caught
up on their required filing.
Owning this stock is a bet on management.
Organic growth has not been robust enough to support a much higher stock
price. The company has made no secret of the fact that they are on the
acquisition trail.
Jeffrey Hultman, the former CEO of
PacTel, has now been running the company for 60 days. Under his direction,
PacTel grew from $100 million to $1 billion in sales, became AirTouch,
and eventually Verizon.
Look for two things: First, look
for revenues which were lost in the recomputing process to show up again
this year. The first quarter could be strong, and those numbers are due
out soon.
Secondly, look for Hultman to take
the company in new and robust directions.
The blue line in the chart is the
3x3 moving average. Breaking and holding above the 3x3 is moderately bullish.
This looks like a great entry level for some bottom fishing money.
Stay tuned for progress.
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