Aegis Assessments was in the news this morning. They disclosed an event that could foreshadow a rebound of enthusiasm for this long beleagured stock.
According to this morning’s press release, the LAPD has signed on to purchase “ multiple SafetyNet(TM) RadioBridges(TM) for use in an interoperable communications program funded by the Department of Homeland Security (DHS) in the greater Los Angeles area. “
Click here to see a picture of their Radio Bridge. It is an elegant solution to the pervasive problem of first responder interoperability at an emergency. In plain English, when the police, fire department, and paramedics all show up at an emergency site, they can’t talk to each other.
This product is a simple solution to a complex problem. While other companies are working on billion dollar infrastructure overhauls and multi million dollar command vehicles, AGSI has come up with this simple solution.
Each first responder at a site provides one hand set and everyone’s talking to each other for about $10,000.
Like so many homeland security technology providers, the orders have been slow in coming and the adoption process is taking a year past early estimates.
Hence, landing the LAPD, one of the largest and most progressive police forces on planet earth, could forewarn of a domino effect of orders, which is exactly what the doctor ordered for this fledgling company.
They only need to sell about 1,000 units annually to have a valuable business, and the LAPD could be the start of those kinds of numbers.
The chart is interesting. At first glance you simply see a stock that made a new low this week.
I’ve included the volume bars because they are worth noting. The volume has been steadily climbing since mid July as the stock has dropped. This suggest a kind of climatic sell off.
Perhaps the sellers are running out of stock and we are poised to rebound. I would simply like to see more orders- a lot more. The LAPD purchase order might just cause a cascade of PO’s.
So what’s your assessment at this time? Do you think the stock holders are waiting to see numbers before they make a move? This is starting to remind me of “Texas Hold’em”.
Editor: I believe a number of the early financiers are selling this stock out of impatience. They have good reason. What was promised vs what was delivered was abysmal. I am prepared to cover the company through the end of the year without worrying too much about the stock price. If they don’t get rolling by then, I will recommend a tax loss sale. If they do, great.
The Katrina tradegy is again proving the inability for 1st responders to communicate with another. Perhaps what Aegis is marketing get more attention and possibly orders. It appears they have a good product. Seems like this is a decent entry point for a speculative long term position.
Editor: I would like to see them getting more traction on the sales side. Once again, the inability of First Responders to communicate will be in the news, but no one seems to be buying in any quantities. Remember, they only need to sell about 1,000 per year to have a strong business model.
According to Aegis, they sent RadioBridge units to FL last year to help with hurricane issues. Haven’t seen any significant sales resulting from that, have you? Also, recent radio appearances, even after the worst natural diseaster in this country (at least in this lifetime) all seem to be happening in cities that are….obscure. If LAPD is committed to Aegis products why don’t they speak up? I fear that ‘speculative’ in this case means ‘kiss your money goodbye’.
Editor: Even worse is the distributor relationship. The company was optimistic that GTSI would begin selling units about 90 days after they entered into the relationship. It has been nearly six months, and there still hasn’t been one order to my knowledge. I fear you are right. High probability this one is not going to make it.
This stock is taking a beating. You just can’t seem to win with these military type stocks or when the military promises orders. If I don’t see any orders by the end of the year I will of learned my lesson and stay away from the penny stocks. It’s always a risk but promises or hand shakes don’t seem to mean anything. Probably never have. Like the guy said, “The war is running this train”.
Editor: Your assessment is probably right. The war has sapped our resources, and all this money we thought would be around for Homeland Security is being spend to the tune of $1 billion per day in Iraq. Could be time to cut your losses and go.
Within 48 hours after the twin towers were destroyed, a company that was floundering way under a buck sent their product “DIGITAL ANGEL” to the NYPD & FDNY to help. That company was/is ADSX. AGSI is now in the same situation. All things being equal, I think I’ll keep my eye on this one a little longer.
Editor: You never know what can happen in this world. I believed the lessons learned from 911 would have been enough to sell thousands of radio bridges, but it hasn’t happened. I don’t know whether it’s a market issue, or if the company is incompetent. I can’t tell. However, I am tending towards a market issue, as there doesn’t seem to be money around for any homeland security technologies right now. Hang it there if you want. It’s a crazy world and anything can happen.
What has happened? Perfect time for this company and it continues to tank. In about .25 above current level. When will it recover? Why is it down?
Editor: Perhaps you missed my comments on AGSI back on September 14th wherein I basically threw in the towel on this one. I don’t believe they are going to make it.
http://www.otcjournal.com/archive/listserv/20050914-1.html
Please review.