TPS Position Update – July 8, 2015

. . . . Superconductor Technologies (NASD: SCON) – Hold 

We like what we’re seeing out of Austin.  The company has now developed an upgraded version of its core wire product, a product called Conductus.

Conductus has broken a performance record for handling more than 900 Amps at 77 kelvin in self field with 12 millimeter wide wire. 

The translation for those of us who aren’t scientifically inclined… this new wire means more electricity can flow through a wire without losing its power because of resistance.  It’s like a greased chute that gets even slipperier.

The Conductus product is now out of the lab and being shipped to Superconductor Technologies customers.  It’s 100 times more efficient than copper or wire.

When Superconductor Technologies reported its Q1 results earlier this year, we weren’t thrilled with the revenues, which slid to $55,000 from $82,000 in Q4 2014.

But losses were cut in half, from $2.8 to $1.4 million.

We’ll be watching to see how many profitable new friends the Conductus product makes.  Right now, the company only has 34 customers.

But all it will take are a few good orders to come in.  The sooner customers evaluate Conductus to their satisfaction, the sooner more business will show up on the books.  

On a percentage basis, it will not be difficult for Conductus to achieve significant growth.

The stock has been drifting downward.  It bounced off a low of $0.82 last month and has recovered nicely.  If it can stay above a support level of $1.05, it has a good opportunity to more than make up for lost ground over the new few quarters. 

 . . . . Smart Technologies  (NASD: SMT) – Hold 

Why doesn’t everybody have a Smart Board interactive whiteboard in the office?

What a great tool… you hook it up to your computers, connect it with other whiteboards, and stop the awkward habit of snapping barely legible pictures of whiteboard notes with smartphones.

Unfortunately, the market for interactive whiteboards hasn’t taken off, and until it does, Smart Technologies will be a big fish in a small pond.

To hedge its bets, the company has embarked on four initiatives… interactive flat panels, software monetization, enterprise solutions, and SMART kapp.  

The transition from a single product focus to four different fields has been rugged.  Fiscal 2015 revenues have taken a brutal hit, off $96 million to $493 million.

We like to be patient, and for now, we will stick with Smart Technologies, but our patience could be running thin.

When Plan A doesn’t work, and management demonstrates the agility to move to Plan B, we’re supportive.

But when Plan B turns out to be throwing stuff up against a wall to see what sticks, we’re not.

We recommended the stock at $1.31 back in February.  It’s drifted down and for the past month has been trading between $0.90 and $1.00. 

So we’ll keep a watchful eye on Smart Technologies and look to see if it can gain a foothold with interactive flat panels, software monetization, enterprise solutions, or SMART kapp. 

Action To Take

• Hold Superconductor Technologies (NASD: SCON)
• Hold Smart Technologies (NASD: SMT)

Category: TPS Update