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Last Thursday BEAC anncounced a $25 million contract. This was a follow on from the $27 million contract announced two weeks prior. For a company that's going to announce about $10 million in revenues for FY '09, this is huge stuff.
The market's response? The highest volume day in the stock's history. It traded 1.4 million shares- by far eclipsing the highest day in its history which had been about 250,000.
My major concern when I first looked at this idea was being able to buy the stock at a reasonable price with this kind of amazing news flow. After all, who would sell this stock with a company landing this level of business? This company is entering a whole new level of activity with what is certain to be unprecendented growth in FY'10.
I suspect BEAC can deliver somewhere in the neighborhood of $35 million this fiscal year, which is already underway. You'll see at least 250% growth this year.
So where did 1.4 million shares of volume get us? No where. In fact, the stock closed down a few cents on the day, which was a real eye opener for investors.
I can tell you management was very frustrated as well. They believe their stock should get better treatment in light of the remarkable accomplishments. Apparently, it's going to take a little longer forBEAC to get some real legs.
The culprit here is some early investors with a appetite for liquidity and no regard for the upside being surrendered. The estimate now: about 1.5 million shares for sale, owned with a cost basis of $.75. The problem? I like to call it "Selling Stupid". It's one thing to be a seller, but intelligent sellers know how to feed a market in small amounts as it appreciates. A seller who just hammers a small stock like this is just stupid and only hurting themself.
So, we push on. My entry level was $.93. The stock is currently $.85 bid, $.90 offer- so no major damage if you took a position. My SSL is $.75, so we're not in any danger today of violating the suggested stop loss. We're just kind of treading water.
The seller is a bit less aggressive as the volume is not there, and it's impossible to tell if they've run out of stock. The good news- the supply will be finite, and eventually this stock will break out. I can't predict exactly when, but it's inevitable with this kind of corporate achievement.
And, speaking of corporate achievement- BEAC was out this AM with another contract win. This time it's Hitachi Cable of Indiana- the contract calls for IT managed services for the Hitachi Cable Indiana facility, which consists of a three building campus with over 230 desktop users, video conferencing and onsite servers. No dollar amount was disclosed in the announcement.
As previously announced, the $25 million contract completes in FY '10. The $27 million contract is over 3 years. They are already generating about $10 million annually- this all adds up to monster increases in business.
The cap structure is not polluted. There's only 20 million shares I&O. After last week, I can't predict how long it will take for this stock to break out. We didn't have a big move to the upside on last week's volume. Some will view this as a problem. Others will view this as an opportunity to accumulate on the cheap. To take advantage of someone else's weakness.
Here's today's news for your review. This business is getting traction. At some point, the stock will as well. I love it at $.90.
-- Turn-Key Managed Solutions to Include Voice, Data and Information Systems at Three Building Campus in Southern Indiana --
LOUISVILLE, Ky.--(BUSINESS WIRE)--Beacon Enterprise Solutions Group, Inc. (OTCBB: BEAC - News) (www.askbeacon.com), an emerging global leader in the design, implementation and management of high performance Information Transport Systems (“ITS”) infrastructure solutions, today announces it has signed a technology management agreement with Hitachi Cable Indiana.
Beacon Solutions will provide a full range of IT managed services for the Hitachi Cable Indiana facility, which consists of a three building campus with over 230 desktop users, video conferencing and onsite servers. The managed services include provisioning for: voice, data, video, and the full life cycle management of desktop/server hardware and software in addition to ITS infrastructure management. Hitachi Cable is expected to save 30 to 35% of current IT related expenditures as a result of increased efficiencies and cost cutting measures under Beacon’s expertise.
“We are pleased that Hitachi Cable Indiana selected Beacon Enterprise Solutions to be their complete IT solutions provider, as they adopt a more efficient and scalable managed services platform,” said Bruce Widener, CEO of Beacon Enterprise Solutions. “As we have done with other large enterprise clients, we look forward to the possibility of expanding our relationship with the broader family of related Hitachi companies based upon our performance at the Indiana facility.”
Hitachi Cable Indiana’s main facility is situated on 35 acres in Southern Indiana, about 10 minutes from Louisville, Kentucky. The subsidiary proudly serves the automotive industry with top quality fluid movement components, ABS braking systems, and the latest in advanced electrical cables for Hybrid Vehicles. As part of the Hitachi global group of companies, the modern facilities in Indiana are able to produce millions of products per month utilizing the latest technology aided design, manufacturing, and analytical and automated processes.
About Beacon Enterprise Solutions Group, Inc.
Beacon Enterprise Solutions Group is an emerging global leader in the design, implementation and management of high performance Information Transport Systems (“ITS”) infrastructure solutions. Beacon offers fully integrated, turnkey IT infrastructure solutions capable of fully servicing the largest companies in the world as they increasingly outsource to reduce costs while optimizing critical IT design and infrastructure management. Through an integrated team approach, Beacon offers a broad range of products and services including IT infrastructure design, implementation and management, application development and voice/data/security system integration, installation and maintenance. Beacon’s client roster includes state and local agencies, educational institutions, and over 4,000 companies ranging in size from mid-sized companies to the Fortune 500. Beacon is headquartered in Louisville, Ky., with regional headquarters in Dublin, Ireland and Zurich, Switzerland and personnel located throughout the United States and Europe.
For comprehensive investor relations material, including fact sheets, research reports, interviews and video, please follow the appropriate link:
Investor Relations Portal, Research Report and CEO Overview Video
For additional information, please visit Beacon’s corporate website:
www.askbeacon.com
This press release may contain “forward looking statements.” Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements may include, without limitation, statements about our market opportunity, strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward looking statements are reasonable, we cannot predict the effect that market conditions, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and factors described in our filings with the Securities and Exchange Commission may have on our results. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
Contact:
Beacon Enterprise Solutions Group, Inc.
investors@askbeacon.com
or
Porter, LeVay & Rose, Inc.
Marlon Nurse, V.P. – Investor Relations
212-564-4700
or
Trilogy Capital Partners
Darren Minton, Vice President
800-592-6067
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