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eMagin 4Q20 results, Schlumberger Lithium, and much more +3

12:51 18-Mar-21


Here's today's longish news dump, in descending order of importance.  Feel free to stop reading at any point, including now.

eMagin has reported its fourth quarter results:
The company has taken first delivery of new production equipment under the DoD grant.  The EPS miss was primarily caused by more equipment issues and the company says it:
expects a recovery in yields in 2021 due to the arrival of a key vendor support person, repairs made to date, and the contributions of equipment purchased under the government awards.
We'll see what happens.  The increase in the backlog to $12.2M, with $10.9M of that scheduled for delivery this year is good, especially considering it comes from night vision, eye care, and veterinary customers.  Consequently, eMagin is expanding its production footprint by 25%.  However, I am wary of both execution and continued DoD funding in the current environment.  Thus, whereas I was willing to take a chance on EMAN when the DoD awarded it with funds at just over a dollar per share, there's no way I would do so at four times the price even though I acknowledge the positive developments and potential for further appreciation.

The situation is even more extreme for Vuzix, with its relentless stream of unquantified press releases, though this one cites a $400K order value is a legitimate positive at roughly 10% of existing quarterly revenue.  For the record, yesterday's second HFSC GameStop hearing was another bad joke, but it should be regarded as a potential risk to Virtu, as well as the swarm traders that are actually benefiting from the retail frenzy, which is certainly far from all of them.  If I were going to take a chance on swarm trading, it'd be with a value like BGCP, on the comment that it will begin supporting Bitcoin trades within a matter of months, now that major banks are offering clearing.

Schlubmerger is a different sort of company, but its New Energy ventures are also unquantified, with the latest being lithium mining pilot project in Nevada, called NeoLith Energy.  The only details given are expected operations around the end of the year, and a claim to have invested over $15M in a direct extraction process that reduces production time from over a year to weeks, and water consumption by 85%.  I applaud the company for being active in its efforts to diversify away from fossil fuel production, but we'll have to wait for hints in the next earnings call to see if there is any predictable impact to SLB, but the project seems like a good opportunity for Energy Recovery, which continues to tout desalination contracts as well.  The latest is in U.A.E. for $11.7M and are already shipping.

Last, and least in my book, Nokia's Capital Markets Day was just affirmed the slow growth and transformation that I'd already inferred from the job cuts on Tuesday, and have been warning about for some time.  Accordingly, NOK is back down to $4, despite a 5-year C-band win with AT&T to begin deployment toward year end.  I remain uninterested in the stock anywhere near current prices.