To OTC Journal Members:
 

Nighthawk Systems (OTC BB: NIHK): Back in the Air With the Big Boys

At long last NIHK is delivering something for investors to hand their hats on, and it's pretty big news. Does it mean hundreds of millions in sales?- not yet- could it set the table for a major new expansion direction for the company? No doubt about it.

For those who need a quick refresher- NIHK makes systems that turns stuff on and off remotely. It is done wirelessly through the same technology that operates pagers. Their main focus has been on the utility market, where utilities use their technology to remotely turn meters on and off. They have also made inroads in emergency services, where first responders need to be able to turn emergency warnings on and off remotely.

In early 2006 this stock went nuts when the company announced a marketing agreement with Verizon Wireless. The stock ran from $.03 to $.16 (433% return) in a couple of months.

Alas, no business materialized out of the Verizon relationship, and the stock completed a 180 reverse course over the summer. We subsequently learned Verizon sold its pager network to American Messaging. Hence, the lack of progress.

The American Messaging relationship created some early business in the utility space, but the last couple of months have been bone dry on corporate events. I have a price target on the stock of $.10, and an SSL of $.03. At yesterday's close the stock was trading just below $.04. Above the SSL, but not too exciting. About where we started the second time around.

Although unnamed in today's press release, it seems Verizon Wireless is back. This time as a customer. I wasn't aware of the following, but since learning about this sale I now understand. Did you know that most cell towers are powered by standard electrical connections, but have diesel generators for back up in the event of a power failure? 

Just like any engine, a diesel must be started at regular intervals to stay healthy and reliable. Cell tower back up generators are on timers, and they are started at regular intervals. New Jersey doesn't like it. They don't like diesels running on bad air quality days. Since those days are unpredictable, cell tower owners are looking for other solutions.

Enter NIHK. The Hawk just sold hundreds of units to Verizon Wireless (well, likely) that will be used to remotely start and stop the back up diesel generators. I say likely because the press release does not say Verizon Wireless, but it does describe "one of the largest US wireless companies with whom Nighthawk has had a previous relationship". DUH.

This news should put a charge back in the stock. You can see what happened on this stock the last time the company delivered a quality fundamental development. Investors are hoping lighting can strike twice. 

In my view there is no doubt the stock will move up again. Here's the far bigger issue- can the company sustain the flow of events. Can they finally live up to the expectations investors have had for this unique market niche technology?

I just don't know. I think there are a lot of untapped potential markets for their technology. They have to recognize opportunities and penetrate those markets. Today, there is a new application. This could lead to a good stream of ongoing business. 

Put a few of these together, and you have a company probably worth way more than a mere $.04. If you like the concept you will probably want to hang in there with this one.

Here is the complete text of today's news release for your review:
 

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