TPS Position Update – July 28, 2015

. . . . Ocean Power Technologies (NASD: OPTT) – Hold

We recommended OPTT in March at a buy price of $0.47.

It’s a fascinating company… it builds equipment to generate renewable power from ocean waves.

The core product is called a PowerBuoy.

We were not happy to see a $13.2 million net loss for the fiscal year ended April 30, 2015, up from a loss of $11.2 million for fiscal 2014.

The problems: the company has not done a good job estimating its costs for projects. Expenses are running higher than planned for its project for Mitsui Engineering & Shipbuilding.

The company is also running through its cash. A year ago, available cash was $28.4 million and now it has $17.4 million.

The good news: quarterly revenue is up 20% for the three months ending in April 2015 compared with the same quarter for 2014.

Because we like the technology, and see significant potential, we went into Ocean Power Technologies with eyes wide open. After just a few months, we’re not about to throw in the towel.

We are watching Ocean Power Technologies to see how it can work on lining up commercial deals, which will unlock sales of the PowerBuoys.

. . . . Pendrell Corp. (NASD: PCO) – Hold

This recent addition to our portfolio, recommended in late May at a buy price of $1.02, is performing well.

In June, the company finalized a deal to make its interim CEO permanent. Lee E. Mikles is now President and Chief Executive Officer. He had been a director for more than a year.

The business focus has not changed. Pendrell “invests in, acquires and develops businesses with unique technologies that are often protected by IP rights and that present the opportunity to address large, global markets.”

Pendrell’s flagship technology product is ContentGuard, which develops software and services for Internet privacy.

It holds more than 300 patents and has license agreements with LG, Microsoft, Nokia, Panasonic, Sharp, Sony, Toshiba, Casio, Hitachi, Time Warner, and Xerox.

Action To Take

• Hold Ocean Power Technologies (NASD: OPTT)
• Hold Pendrell Corp. (NASD: PCO)

Category: TPS Update