RE:RE:RE:CCIt was the most positive earnings call in a number of years. Hopefully that optimism will be rewarded. Taping a new opportunity that claims to target 10 million small farms at a potential $6,000 each is quite large, however I wonder how many farmers would actually embrace these products. Even if we assumed only 5% did that's still a 500,000 number of farms opportunity ($3bn total size). If AJX could claim 10-20% market share (on the cc they said there are no competing products at the moment), that's a $300mm to $600mm potential topline opportunity for the company at a margin rate that's consistent with higher priced products. Going forward any signs that this is materializing, as management anticipates, and its a game changer for the company and stock. At this point we are very much in "show me" mode with management, however for the first time in over 5 years there is a compelling visibile path and strategy to growth.
Interesting comment regarding the $55mm bulk order. Management indicated on the call that being a public company with required disclosures presents challenges for maintaining client confidentiality. One has to wonder if strategically it would be better if AJX was a private co. One question for the group, does AJX have any customers above 10% revenue in 2017? If not then we can assume at maximum ~$4.8mm of the $55mm is existing business with the large unamed client. Unfortunately on the cc management cited orders of this size do not happen often, so perhaps its a one off BUT they did cite several opportunities with other clients so net, net a $100mm topline with 20%+ annual growth rate could be possible + the Hands free opportunity ($300mm - $600mm opportunity) + Rice Planter in Asia (and complimentary farming tools). It sounds exciting but it's all just a dream until we see the numbers actually come through on earnings reports.