The way I see it:
1. Income increased greatly over the same period last year, but only increased $7000 from last quarters income of $2,606,357. Does this mean that Fry Guy is flattening out, or did ALAN have CDSI revenue in the September quarter that was not repeated in this quarter. To me this is the key. At what rate are Fry Guy sales increasing. I expected sale this quarter to be higher because more people were in Walmart Stores doing Christmas shopping.
2. If you do the math, earnings per share was only .00573 cents per share. We really didn't make 1 cent, closer to 1/2 cent.
3. Next quarter we are supposed to get significant CDSI revenue. The big China contract totaled $1,000,000. At a 30% margin, the total income from this contract would be just under 1 cent per share. I think we can expect 2 cents next quarter, maybe more if Fry Guy sales continue to expand.
4. What kind of multiple do you place on this stock? If the company can do 2 cents next quarter (with the help of CDSI revenue), and 2 cents in the following two quarters, ALAN would then have trailing revenues of 7 cents. A multiple of 10 gets you to the current price of around 70 cents. An expanded multiple will require evidence that Fry Guy and or CDSI is on a faster growth path. I sure would like to know how September Fry Guy revenues compare with December Fry Guy revenues.
5. At the recent conference call it was mentioned that the stock price had to get above $1.00 per share by the end of February or the stock would lose its NASDQ listing. If I understand, I think this means the stock would become a "bulletin board" stock. An alternative would be to do a reverse split. Both of these options would be bad for the price of the stock. This may be keeping the price down. Kind of a Catch 22.
6. I think the company needs to give the investment community some understanding about how quickly Fry Guy is expanding. Will Fry Guy revenue continue to double or will the growth slow down now that Walmart has been saturated. |
