Subs: A Holding Beats Top & Bottom Line

• Posted by ToddSullivan
• on October 28th, 2009

A true rarity in this economy….guess that is why the stock was up 14% Wednesday on a day the S&P was off nearly 2%.

Orion Energy (OESX) beat top and bottom line estimates AND guided UP for both for the next quarter. When is the last time a company did that?

Here is the full release

Now remember. Over the OVPP selling plan, OESX will realize more upfront costs before revenues are received. Because of that, we see the slight excess drain on cash from “cash used in operations” as products are being produced before full payment is received. There will continue to be this lag as the program builds but over time, the steam of payments and excess sales will more than compensate.

Please listen to the Q&A. OESX has new product coming for municipalities that could be simply massive. This means what is happening now may be dwarfed by what comes down the road.

So back to the investing thesis. OESX was undervalued based on both results and the liquid assets per share metric we always look for. Neither of those have changed. OESX still has a cheap asset valuation and the new selling program (OVPP) is taking off with 78 companies now under contract, up from 36 at the end of the Q1. For those not good with math, that is 105% growth in a quarter.

Again, please listen to this conference call to get more flavor on just how much growth we are in for at this dirt cheap valuation.

Here is the call (click to open)
RVCap

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