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Tenet
Healthcare Is Healthier Than Expected |
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If
you took advantage of our Tenet Healthcare (NYSE:
THC) pick from November
10th, then  you're
probably loving us today. THC shares jumped more than 14% on better-than-expected
earnings, and a 2008 forecast that was far batter than Wall Street's
expectations. As of now it's about 19% above our pick price of $4.06.
More importantly, I think today's announcement addresses some of the lingering
worries previously plaguing the stock.
The
big move also carried THC shares well past most of the key moving averages;
the 200 day average is the only question mark as of today.
Though
still well under our target level of $7.67 (around last year's peak), it
may be a good idea to go ahead and start thinking 'trade management'
with this one. We still think there's potential for more gains, but we
can also see the 38.2% retracement line is in play again - at least for
the time being.
Did
everybody get a chance to review the investor
presentation on the Smart Energy Solutions (OTCBB:
SMGY) website I mentioned
this weekend? If you did, great. If you didn't, I think
today's news may inspire you to go ahead and do so. Not that their press
release is going to esoterically change the world, but this company is
starting to make some noise again. It just makes me curious, especially
when we see the stock's daily volume surge for no apparent reason (213K
shares traded yesterday).
I want
to look at the news first, but then I want to look at something 'bigger
picture'.
 Remember
the 'heavy-duty' Battery Brain the company's been talking about? It's
here. This battery-preservation device is appropriate for trucks, buses,
RVs, and vehicle's of that size. It's basically the same device as the
automobile version of the Battery Brain, but with a different audience
....owners of higher amp, multi-battery vehicles.
And
that's the real hot button as I see it - the audience. There are
about 600 million operational passenger cars on a worldwide basis, about
250 million of which are in the United States. For comparison, there are
more than 8 million commercial trucks in the U.S., and I estimate about
twice that number for a global total. You know who I think might be
the bigger customer? Believe it or not, in the the near-term I think
the heavy-duty truck fleets represent the stronger target market.
Here's
the rationale ...commercial fleet managers are concerned about maintenance
and prevention, because to them it's dollars. The average driver
of a passenger vehicle just doesn't see the eventual financial impact of
proper maintenance, but fleet managers are already familiar with - and
open to - money-saving devices like a Battery Brain. The offer is further
sweetened by the company's installation program for major fleets.
Smart
Energy Solutions estimates the new Battery Brain will basically pay for
itself within a few months, by reducing the amount of lost time and service
calls associated with unexpectedly-dead batteries. I don't disagree.
The
entire press release is below. What I really wanted to talk about was the
investor presentation I mentioned above - the revenue forecast specifically...
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Sales
Projection Not Necessarily 'Pie In The Sky' |
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Call
it perfect timing. Now knowing what we know from today's news, the lofty
projections are a lot more plausible...at least to me anyway.
 In
a nutshell, the 2008 sales projection is $5.7 million...much stronger than
last year's figures. A third of the total is to come from fleet and bus
sales though - about $1.9 million. Another third - $1.7 million
- is based on retail sales (via the site)...a modest increase of last year's
total. The remainder is expected to come from car dealer and international
sales ...roughly $2.0 million.
Had
I not known the story as well as I do, I might not buy into the aggressive
plan. However, as aggressive as it is, the planned increase isn't off-base
to me. They did about $1.7 million last year almost exclusively with direct
sales and a limited number of retailers. It wasn't until the latter part
of last year they added the small army of international outlets. The heavy-duty
version didn't exist until today, but will impact this year's bottom line
for the reasons stated above.
The
point is, while at this point we all probably have a 'show me' attitude,
the tools are falling into place.
The
picture gets even more interesting when you look at their longer-term projections...$19.3
million in 2009, and $38.4 million in 2010. Again that sounds wildly optimistic,
but when you break it down it's not really out of the question.
Assuming
they sell a fair mix of regular Battery Brains and the heavy-duty version
(and based on a rough guess at an average wholesale price), I think
that would require only about half a million and one million units sold
in those years, respectively. Given there are hundreds of millions of cars
on the road, and several million more are manufactured every year, it wouldn't
take much market penetration to meet those targets.
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The
Engine's Revving. Traction To Come? |
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As
for the stock, like I said, I'm in 'show me' mode. That just means
I want to see the stock get past some technical hurdles in addition
to seeing the company make good progress towards this revenue plan.
 First
and foremost, there's straight-line resistance. This line has been
in place since September when SMGY shares also fell under all of its key
moving average lines. In the same vein, the moving averages themselves
represent potential ceilings.
There
are two upsides I see though. One of them is the stock being drastically
oversold, and the other is volume. The oversold situation is self-explanatory;
the volume one isn't.
Despite
being hammered for the better part of the last five months, we really never
saw any massive distribution days. Simultaneously - though not
terribly often - we did see some significant accumulation days.
Monday's accumulation was the highest volume day we'd seen since October.
Why?
Great question. Without any news, it's sure interesting how someone can
suddenly be that interested. Maybe there's a hint there we should all
be taking. Though I'm admittedly a momentum trader, I can't count the
number of times I've regretted not tip-toeing into the water when everyone
seemed to have forgotten about a stock.
This
is something definitely worth watching unfold over the next few weeks..and
possibly trade-worthy to boot. Stay tuned. Here's the news release.
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Smart
Energy Solutions Launches New Product for Heavy Duty Trucks, Buses and
RVs
Targeted at
Medium and Heavy Duty Fleet, Beverage, Courier, Construction, Bus and RV
Markets
POMPTON PLAINS,
N.J., February 26, 2008 -- Smart Energy Solutions, Inc. (OTC Bulletin Board:
SMGY),
developer and manufacturer of the innovative Battery BrainTM electronic
controller for vehicle and marine batteries has developed and is launching
a new high capacity Battery Brain(tm) for the truck and bus markets. The
Company worked with several major truck and bus fleet maintenance managers
to develop and test this product. There are over 8,000,000 commercial trucks
and buses in the United States with the top 10 truck fleets having over
350,000 vehicles . Battery failure is a major concern for all fleet managers
and the new Heavy Duty Battery Brain(tm) product is available for 12-volt
and 24-volt systems and will withstand starter battery current draws of
up to 2,000 amps. Several major fleets in both the United States and Mexico
through Company approved distributors have purchased our initial production
run and placed orders for the new model currently in production.
"After extensive
testing and customer input, Smart Energy Solutions is pleased to introduce
this new model of Battery Brain(tm) for all vehicles that have high amperage
draws, diesel engines and/or multi-battery configurations," stated Pete
Mateja, CEO of Smart Energy Solutions. "This new product can pay for itself
in less than six months by reducing battery related service calls and delaying
battery replacements due to deep cycling when batteries run down. Battery
Brain(tm) can eliminate valuable lost time, and lost revenues, by reducing
the number of vehicles stranded due to a dead battery. The product also
provides a warning when batteries are reaching the end of their life cycle
so that battery replacement can be scheduled. In addition, to encourage
use of the new product, the Company has initiated a National Introduction/Installation
Program available for major commercial fleets, motor carriers and bus companies."
"The Heavy Duty
Battery BrainTM is ideal for fleets including the beverage and courier
markets where trucks are turned on and off frequently daily as well as
the construction and logging markets where vehicles are known to stand
idle for prolonged periods of time. In addition, the product is ideally
suited for bus and RV motorhomes which may not be frequently used and have
high electrical current draws and demands."
Battery BrainTM
is Smart Energy's flagship technology that constantly monitors electrical
discharge of the battery for nearly all kinds of vehicles including automobiles,
SUVs/trucks, medium and heavy duty trucks, military, buses, RV's, boats,
commercial vehicles and personal watercraft. Should Battery BrainTM detect
that the battery is losing the required charge needed to start the vehicle's
engine, the device automatically disconnects the battery to preserve its
starting power. In addition, Battery BrainTM offers a built-in anti-theft
feature on some products and will extend the life of the battery.
About Smart
Energy Solutions
Smart Energy Solutions,
Inc. (OTC
Bulletin Board: SMGY) is the sole owner of the Battery Brain line of
vehicle accessory products. The company is headquartered in Pompton Plains,
NJ, with operations in, Zhuhai, China, Petach Tikva, Israel and Pompton
Plains, NJ. Visit http://www.smgy.net.
Forward-Looking
Statements:
Actual results
could differ materially from any forward-looking statements contained in
any Smart Energy Solutions press release. All statements made in this press
release are made as of the date of the release and could change due to
unknown risks and uncertainties.
Contacts
Ed Braniff,
Smart Energy
Solutions,
973-248-8008,
edbraniff@smgy.net |
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Got comments, questions or suggestions?
Send 'em on over: Email
the Editor
If you wish to send a written request
or inquiry, please send it to our physical address:
TGR Group, LLC
4653 Carmel Mtn Rd Suite 308 #402
San Diego, CA 92130 |
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| 'Recession'
Story From AP About Four Months Too Late |
| Time
to get on the soapbox again.
For
those of you who are new, every month or so I fly off the handle ...deservedly
so though. I have patience with everything except 'stupid' - especially
from the media. When a journalist spends time telling me something I needed
to know four months ago (and has since become obvious), the soapbox gets
dusted off and placed on your proverbial street corner.
Today
we have an Associated Press story to thank - the 'Top Economists See
Sign of Recession' write-up has me thinking to myself "Are you freakin'
kiddin' me?"
I'll
put a link to the full story below. Here's the basic message summarized
by your favorite writer/analyst at your favorite small cap newsletter/website.
(It helps that I'm the only writer/analyst here.)
Unemployment
is up, consumer confidence is down, and we're in a tough housing slump.
As a result, a near-majority of the National Association for Business Economics
members collectively think a recession is going to occur this year.
My
response: Ya' think?
I guess
those quick perceptions are what it takes to get into the National Association
for Business Economics (affectionately called NABE amongst those who know
the secret handshake).
One
of the NABE's members boldly suggested a recession started in December,
but went on to say it would probably end in June once we all got our huge
tax rebate checks in May. Makes sense to me - I know I plan on taking my
$300 windfall and buying that house that was just a mere $300 out of my
price range. I intend to write W a thank-you note just as soon as I move
in.
Here's
the story. I'll warn you before you read it that you can't get those
two minutes back once they're gone. But, at least you'll have an affirmation
of something we've all known for months now.
I heard
a rumor that tomorrow the AP plans to run a story about the U.S. starting
to have problems with sub-prime loans. That'll be interesting news to break. |
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