Thermal Energy International Inc V.TMG

Objective insights

[Mostlyserious]

As many have in one way or another said, there is a disappointment and concern about the number of bigger contracts signed over so many months and how that will trickle into the performance over the next number of months.  That will fall under the "lumpiness" in the business that is often mentioned, meaning some next quarters by themselves may not look so great.  I think one could seek some root cause to understand lumpiness and whether something could be done about it, but we are where we are.

So, let me know offer my impressions from the latest conference call, with a disclaimer that a certain amount of those are based on the assumption that what the CEO said is reasonably interpreted at face value and thereby true.

There was quite a bit of emphasis on the investments for growth, and readiness for company's "next stage of growth".  I am assuming the terminology was carefully chosen and is true to the common interpretation.  "Next stage" signifies to me something more significant than continual growth.  It signifies a step-wise growth pattern as opposed to something more linear.  That means that they envision that the still very favourable business environment will result in a phase of significant growth.

And the Q and A description of the workforce and hires supports that.  Sales staff take a couple of years to get up to sufficient speed.  Engineering staff take some time but less.  2 new sales staff hired and 6 new engineers hired.  The way the CEO described it in terms of strategic hiring inflow, these 6 new engineers were hired not to necessarily support the 2 new sales staff but rather the sales staff hired over the past couple of years before that are starting to be fully running. That supports my interpretation that while things may not be stellar in the short term, in the medium term perhaps starting a couple of months from now, we could see a slew of contract announcements that will support this hypothesis of the upcoming growth being more of a step-wise increment than a steady linear increment.  Leading to the overall optimistic view and the excitement of the company's future. We just have to stick it out through this indefinite lull.

Acquisitions were also asked about.  Sounds like some potential targets have been identified, some talks have been had but still very early.  However, something finalizing potentially within 12 months.  I don't expect a huge incremental immediate revenue contribution (keeping in mind that where we may be with organic growth, $5 million would not be a huge percentage), but it will be something and hopefully there is some greater strategic angle (client list and access) that will be worth more than the acquired revenue base.

There are additional snippets one could comment on with regards to the product mix, but I think this is sufficient to put forth a case that the SP sitting where it is today, may not be a bad thing for those with a bit of cash on the side.

That's my pitch for "buy on rumour and then buy more on news" to help out Prone, but only for those that have an investment horizon longer than 3 months!

[panapple42]

sounds pretty lame.  they were also asked if they were hiring anyone soon.  hopefully  they can find someone else to get this thing moving because their outlook looks like, feels like, sounds like cpap.