TPS Position Update – October 6, 2015

. . . . Smart Technologies (NASD: $SMT) – Sell 

It’s time to say goodbye.  Smart Technologies doesn’t appear able to shift its business in the new direction it needs.

The market for the company’s core product, interactive whiteboards, never took off.  

The four new initiatives at Smart Technologies don’t seem to be taking off either.

We’re not seeing much traction, or much in the way of revenue, from interactive flat panels, software monetization, enterprise solutions, and SMART kapp.

Q2 revenues plunged to $98.7 million from $137.5 million for the corresponding quarter last year.  2014’s quarterly net income of $12.1 million was replaced by a loss of $2.2 million.

We are not inclined to be patient with Smart Technologies because of the firm’s apparent absence of strategic focus.

It is keeping its toe in the interactive whiteboard water at the same time its trying to make something happen with enterprise solutions, flat panels, and software.

We will continue to watch the firm.  For now, we advise selling your position and investing in a more promising opportunity. 

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

Superconductor Technologies is at the crossroads.

Now that it has gone through time-consuming and expensive technical verification of its core product, it needs to start selling.

The core product is Conductus wire, used for high temperature superconducting.

Q2 net revenues were $71,000, up from $55,000 in Q1.

The company reported a Q2 loss of $2.4 million.

We are maintaining our hold position to give Superconductor Technologies a chance to sell what it’s built.  

The firm’s CEO, Jeff Quiram, says, “We believe we will meet all of the product requirements for one or more customers in the next few months. Our efforts continue to focus on the customers that we believe are best positioned to aggressively deploy superconducting devices in the near term.”

The waiting game has been tough for shareholders.  Back in February, SCON traded at $2.73.  Today it’s at $0.53.

Superconductivity is not a risky new technology.  It was first discovered in the Netherlands more than a century ago.  

What we need to see now is utility companies, who want the financial advantage of a zero resistance wire that translates into less power loss in the grid, invest in the Conductus wire from Superconductor Technologies.

The opportunities remain strong, with the possibility of significant profit. 

Action To Take

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

Category: TPS Update