I think a great deal of Flyhtas a company. It has great products and an excellent management team and BOD, and I hope Flyht and its loyal base of shareholders are well rewarded one day - hopefully sooner than later.
But they are a very small player in a tough industry and despite the KRC report I would not buy it today. I have followed FLY/AMA closely for over a decade and have held shares in the past but I don't own any currently.
First off the KRC report is laced with hyperbole. Yes there are many regulatory changes coming which will provide impetus for technology upgrades - and this is, has and will be an ongoing theme - but this doesn't automatically translate to increased revenues - and more importantly profitability - for Flyht. The KRC report has some good infomation in it but it is really no more than a full blown paid in sell side marketing tool. Unfortunately Flyht has no analysts following, and no real research unless you consider Alex Ruus's perennial buy recommendations and McQuirter's on/off comments on BNN, and of course the several other recent nay sayers on stockchase.
That said, at some point I may buy back into Flyht if I see the right things 'actually' happening, but despite waiting and watching for several years now I still don't see evidence of material change that will lead to profitability, and unfortunately Flyht has a long history of losing money, negative cash burn and financings and dilution. I expect Flyht to post a loss in Q4 and continued losses for the forseeable future. Also they have a 2M CD out which will bring in much needed cash but carry a 5 - 7 % dilution, and as the KRC report states FLY will need another 5M to get through the next few years so hence another 18%+ dilution at current prices.
But much more importantly for me is the fact that Flyht has not been able to grow recurring revenue in any meaningful way. They have not been successful in selling add on SAAS products from their China sat com sales nor from the many many hundreds of L3 licensed units that went into the Airbus 320/30 line fits. I had expected the L3 revenue stream to expand into Airbus's larger fleet but it did not. In fact it is being phased out and soon there will be no royaly license revenue at all. Also we now have a new VP Sales, again ... presumably because the others have failed, seen the writing on the wall and moved on. And what concerns me most is that I have never heard any credible explanation of why this this did not take root - both the HW and the add on services? Why are we being phased out? What's wrong with our products & services? What are they being replaced with? Who are we competing against and losing out to, and why?
In China we have many small customers - which is good - but again we have never penetrated a large commercial carrier over there, or anywhere in the world for that matter. Why are we being phased out at Airbus? Why arn't the larger carriers working with us? Despite our great BOD with all their contacts, why are our attempts over the past several years to gain added recurring services revenues not working - or only working with the very small niche airlines and at that in only the smallest of beachhead positions?
It seems the PWS /TAMDAR acquision has some synergy and should work out well, however to stay relevant Flyht will see a continued ramp in expenses to support their two main and increasing complex product platforms.
So unlike KRC I don't see Flyht as under valued. I feel it still carries significant risk, and I see it as being worth somewhere between .90 and 1.30 until such time that they can show some real and demonstrated traction with AFIRS recurring revenue, and/or with L3/Airbus revival, and/or acceptance with one or more of the large commercail carriers, and/or perhaps Boeing and FlyhtStream etc etc.
I would rather buy the placement even at 2 or 3 dollars assuming evidence of a solid path to profitability. If we had that evidence then the sky would be the limit for flyht stock- no pun intended.
Anyway, not trying to start a fire storm here but despite all the great things at Flyht I just don't agree with the many IF IF IF speculations in KRC's report - at least not yet?