Nighthawk Quarterly Numbers Pretty Good- No Major Negatives
November 19, 2008 @ 4:52 pm
I just had a quick look at the NIHK Q3 numbers, and there weren’t any big negatives to sabotage the recent move in the stock, which is what I was hoping for.
Let’s start with some really good news. From the June quarter to the September quarter, the number of shares I&O barely budged. 137 million to 138 million. This suggests the stock will be able to move up fairly easily as volume comes back in- as we saw last week.
The top line- $850k, was up about 10% from the June quarter, and up about 250% from the same quarter last year. It’s a small number, but it’s great growth.
The company is still losing money, but it’s a pretty small amount, and they should be able to move towards cash flow positive and then profitability if sales continue ramping up out of the new Itron relationship.
Cash continues to be a weak point, but it was far better than last quarter where they ended with just over $30k in the bank. This time, they ended the quarter with $142k in the bank. Again, a small number, but a substantial improvement.
I’m very pleased to see the company is not in some sort of weakened financial condition. Some big set top box orders and/or business flow out of the Itron relationship would be just what the doctor ordered.
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I think the new Itron deal could be big, but I am concerned about the set top boxes. If nihk only had 1300 set tops on order this qtr. that would be a 50% drop from last qtr. Did you hear anything from Doug about the set top boxes?
M.
Editor: There has been no communication with him on this issue. This is necessarily negative. Doug didn’t communicate anything to me about Q3, and he came in with pretty good numbers all things considered. Also, the Itron deal was a surprise as well. There’s no reason to doubt the trend will continue, so I’ll make the assumption until proven otherwise. I don’t know how the set top box numbers will come out in q4- we’ll just have to wait and see.
Comment by M. — 12/11/2008 @ 10:07 am
So what happened to NIHK didnt you think it should hold at .05 or so. I see you are still selling your shares so I guess you dont have a good feeling that this will be heading higher do you? Itron should be a big help to this stock do you agree?
Editor: Absolutely. I’m pretty sure I haven’t sold any shares in the last few weeks. If so, it was a tiny amount. I need the money for operations, but I don’t need it at this price. Too low. I wish the company would get more active in shareholder communications. However, I believe they are clearly on the right track and I have a $.10 price target on the stock.
Comment by Anonymous — 12/10/2008 @ 8:55 am
After the Itron deal the average volume went through the roof for 2-3 weeks. My question to you is, where did all those buyers come from? Do you think their are a lot more people who follow this then the average volume shows? I feel if they were to get a deal from Itron or another set-top related deal this thing could go. I believe those things will happen, but not sure if it will be this month. I’m calling for Q1. Thoughts? Also, you speak with Doug at all besides that note you sent him? Thanks, always good to hear your opinions on these things.
Editor: I think the big problem here is simple lack of interest in the stock market in general. Sure, there are people following the stock. Sure, investors would probably be willing to buy this one when perceptions change. Big orders for the set top boxes would be great for the stock. I agree with you. The rest of December will play out rather anemically. I believe the market will behave better next year, and NIHK will be a beneficiary of renewed enthusiasm for stocks. If you’re accumulating, it’s a positive. If you want the stock to go up right now, it’s a negative. Certainly, on the fundamental side, the company is delivering on all fronts- and here’s the key- there’s no dilution happening, which is why the stock will be able to move.
Comment by Ed — 12/2/2008 @ 6:08 am
Larry-
I agree with your quick assessment that the news is overall positive. Given the fact most companies are posting huge losses, poor forecast for 2009 and layoffs.
Two recent points make NIHK attractive- its products help utilities control expenses in shutting off utilities as the agreement with ITRON a global company is a bullish sign too!
I continue to add to my position.
Scott
Editor: The numbers are there. Since the company had been so quiet, I was concerned that the quarter would be horrible. Instead, great top line improvement, better margins, lower losses. No dillution. The data is there. I sent Doug Saathoff a note congratulating him on great performance in this economic nuclear winter. I would add to your position if you have at least a six month window in time.
Comment by Steve — 11/21/2008 @ 7:06 am
NICE TO SEE YOU TURNING POSITIVE ON THE HAWK. Well should we be a buyer down here?
Editor: The hard data is there. I sent a note to Doug Saathoff congratulating him on how well he’s doing in this economic nuclear winter. Absolutely with a six month window in time.
Comment by JC — 11/19/2008 @ 9:50 pm