RE:RE:Keep watchingHi apainter,
I have not sold!!! I will not sell until the market has realized UAV's future potential. I believe, based on relative valuations, potential forward earnings and first mover advantage (In their own space) that UAV should be trading at around $0.25.
That being said, I will fully admit that my projections for Q3 were way off. This was mostly due to the fact that I misunderstood how the AIR aqcuisition would effect the financials.
- Revenues - ~$400K was a little disappointig to see especially since last Q was ~$500, however Year over Year theyre up 20% AND they have already surpassed thei first year revenues. So overall, still positive. I think the problem was that I (And the market) was expecting immediate revenue growth from the AIR deal. The reality is that AIR was only an active member of UAV for 5 weeks. To this point I will add that management could have done a better job communicating that we would't see an immediate impact. But lets not play the blame game...
- Expenses - ~$1.6 million... Was NOT expecting that! Again, the AIR acquisition had a serious impact on allot of this. Salaries, subcontractors, share based payments, consultants and travel (???) were the bigest line items. Threethings: a) Human capital is getting expensive at UAV. They need to offset this by getting more revenues. End of story. You cant sustain a business with negative cash flows. b) We have to wait till next quarter to get a better idea of how the AIR deal impacted these expenses. c) You need to spend money to make money. UAV is 18 months old and they got approved for BVLOS and just landed a US Army partnership! I truly believe that if we demanded lower expenses, we wouldt have acheived these milestones... So again, spend money to make money.
- Balance Sheet - A true value investor also looks at the balance sheet. People are missing the fact that UAV's assets have grown to $5 million!!! Yes there might be impairment at the end of the year, which will decrease the assets, but these assets are producing revenues. so hopfully year end wont be too surprising. Also, their debt is virtually non-existant, so once they improve cash flows, they might be eligible to secure a nice line of credit or a debeture... who knows.
Overall Im happy with UAV's acheivements. I will admin that Q3 wasnt what I excpected, but I knew more news was coming. If anyone has ever picked up the phone to call the CEO you would have probably heard that they were gearing up for some big news releases in the fall. We definitely got them!
Im a long term player when it comes to UAV. I believe in the business and the potential of the business. I do wish communication was better, but I have to commend them on their move to the 8020 Connect forum. The main reason I didnt write anything on stockhouse when Q3 was released was becasue I was busy reading and writing comments on 8020. Andrew Male (The new COO) has been hard at work responding to shareholders on the forum. I am grateful for that. I recommend anyone that is serious about UAV should sign up to the 8020 forum.
By the way, lets talk about their most recent acheivements:
- BVLOS - As far as I know (Correct me if im wrong) only about 6 companies have BVLOS testing licenses in Canada. Its pretty amazing that UAV has this!!! I know for a fact that you dont get BVLOS approval without a feasable busiiness plan and working prototype/model. Therefore UAV has something in the works.
- UA Army partnership/"SubT" - Holy smokes!! A canadian company working with the US Army??? How does the market not see the incredible potential of UAV?!?! Maybe im overreacting, but the doors that are opeinign for UAV are huge! All those travel expenses may have paid off ;) and guess what? no other publicly traded stock the size of UAV has this opportunity. This is BIG stuff.
Long story short, if you didn't load up on UAV in the most recent fall to $0.04 then you missed an easy opportunity to get into a highly underappreciated stock. That being said, I beleive that buying UAV at $0.07 is still a good idea! (Do it quick! we might even see 8 cents soon!)
Happy trading.