Note the surge in Volume, Thursday, Sept. 3, 2020.
Up 19% in a Dow-Jones down, 800-point day.
Aug. 3, 2020 updated Aug 4, 20-20
Tom Linzmeier, editor Tom’s Blog & LivingofftheMarket.com
VUZIX (VUZI) $4.39
Note the surge in Volume, Thursday, Sept. 3, 2020. Up 19% in a Dow-Jones down, 800-point day. Impressive! Actually, the rebound from $1.00ish in March of this year to the current price
Is very impressive.
VUZI, is a formerly owned name of ours, that goes back more than five years. We exited ownership of Vuzix about two years ago on poor stock performance and poor vision on time to commercialize the technology. Momentum has returned to the stock and as can be seen in the chart and in the news flow below. Many, many partners and venders are signing with Vuzix on a weekly and nearly daily basis. This is future revenue in the making.
So, what does Vuzix do? Vuzix is a leader, we would say “the” leader, in smart glasses. Vuzix has market-leading optics, Waveguides and display engine technologies that enhance the usability and functionality of their smart glasses. VUZI products also feature high-quality audio, head-tracking technology, and industry-specific apps to facilitate the working day in multiple industries and multiple international markets.
Vuzix is truly a David among Goliath’s. Competition comes from none other than Apple, Facebook, Google and Microsoft. How’s that for competing with the big guys. I have no doubt, someone will buy Vuzix as they build market share and grow distribution.
We know the news headlines below can be easily sourced from a number of places, including the company’s website. We wanted to share news below in this manner for the “effect of seeing” the constant flow of new partners or venders. As mentioned above, these relationships are future revenue flows.
Recent Contract & Product News of Note:
Source:https://finviz.com/quote.ashx?t=VUZI
Sept-4-2020: Vuzix Announces $15.5 Million Registered Direct Offering
Sept -3-2020: Vuzix® Enters into an Agreement with a New Major Defense Contractor to Develop a Customized Waveguide Solution
Sept -2-2020: Pixee Medical Completes its First Total Knee Replacement Surgery Guided Solely by the Vuzix M400 Smart Glasses
Sept-1-2020: Netherlands’ National Police Unit Using Vuzix Blade Smart Glasses in Police Work Study
Aug-21-2020: Rozetta Corporation Selects Vuzix Smart Glasses for Its e-Sense Productivity and COVID-19 Solution and for Hospital Healthcare Study
Aug-13-2020: Vuzix M400 Smart Glasses Market Footprint Expands to 54 Countries Globally to Support Enterprise Business Continuity
Aug-12-2020: Vuzix Adds Microsoft Intune and MobileIron Mobile Device Management Application Support for its M400 Smart Glasses
Aug-3-2020: Australian Telecomm Optus Showcases the Power of its OPTU5G Network and Vuzix Smart Glasses for Remote
Jul-23-2020: Barcelona Hospital Surgeons Now Using Vuzix M400 Smart Glasses to Perform Assisted Gastrointestinal Surgeries on Patients
Jul-22-2020: Vuzix and ProGlove Partner to Offer a Combined Hands-Free Scanning Solution to Streamline Workflows for Enterprise Customers
Jul-21-2020: Vuzix Delivers Smart Glasses to Australian Meat Industry to Assist with Plant Audits During COVID-19 Pandemic
Jul-17-2020: Vuzix Announces Further Enhancements to its Zoom and Webex Connector Applications for its Smart Glasses Specifically for Emergency Rooms, Medical Response
Jul-16-2020: Vuzix Delivers Customized Waveguide-Based HMD System to a Global Aerospace Firm to Complete Phase IV of this Product Development Program
Jul-13-2020: Vuzix Highlights its Growing Augmented Reality Smart Glasses Patent Portfolio for Next Generation Smart Glasses
Jul-09-2020: Vuzix Selected by Verizon for Integration with its 5G-enabled EMS Solution to Deliver Enhanced Medical Augmented Reality for First Responders
Jul-07-2020: Vuzix® Delivers Customized Waveguide-based Optics Engine to a Major US Defense Contractor
Jul-02-2020: Vuzix Receives M400 Smart Glasses Certification for China and Will Target COVID-19 Business Continuity Support
Fields of Application for Vuzix – Smart Glasses:
- Field Service Technicians
- Manufacturing Processes, Training and Service
- Tele-Medicine
- Warehouse Logistics
- First Responders
- Any situation that benefits from a Hands Free, Computer access.
Image Taken from Vuzix web site
Vuzix developed the hardware system a number of years ago. The ensuing years were working to downsize and improve efficiency of the technology. Vuzix chose to approach the wearable market from a workplace perspective whereas others, like Facebook and Google – remember Google Glass – approached the wearable market from the consumer market.
Besides improving the technology and downsizing the footprint, ah should we say “faceprint”, Vuzix also need to overcome, two other challenges.
- One was comfortable wear ability for a full day’s work environment.
- The second challenge was software applications. Just like the “smart phone, without applications and app creators, what would you use the Smart Glasses for?
This all took time. It now appears from the news flow above that applications have caught up with hardware improvements.
Valuation: Is Vuzix overvalued? Probably. By the numbers, Revenue is tiny Vs the Market cap. Trailing twelve months is about $7.7 million in revenue. Following today’s secondary we estimate fully diluted shares outstanding are about 46 million. That places the market cap at about $202 million. That’s not cheap. On the other had what is the market value of a clear market leader in a tough market to develop. Remember who they have competed with and stayed in front of? You have many unicorns coming to market in the next month or two that are valued in the billions. I not saying Vuzix should be valued in the “Unicorn” category but who knows what “the Market” will value them at.
They just did two secondary offering in 2020. One in May for $15 million and a second was announced today, Aug 4 for another $15 million. They did not have any trouble with the secondary offerings, so the market is accepting of the current valuation.
Image Taken from Vuzix web site
The history of Vuzix stock price has been choppy. It does give us some support and resistance levels, however.
Four dollars is a support/resistance line. Since there was an offering this week, we do expect the share price to dip below and rally above $4.00 as the market digests the offering. Buying weakness below $4.00 is one goal to work on.
Vuzix has always been a great trading stocks as seen by the sharp movement in the monthly chart above. We suggest taking a position of about 25 to 30% of what you consider a fully invested position. Use sharp drops or periods of consolidation to increase your position. Use sharp rallies to sell about 35% of your position. On selloff buy back in. work towards increasing your position on pull backs so if 1000 share was a fully invested position for you work to get to a 50% increase in the position when buying back into the shares on weakness.
We are not a fan of stop losses on small cap companies. Share prices are so volatile, odds are good you’ll get stopped out on weakness and never get back in for the bigger upward trend move. Mentally, decide if the company and the technology is an area you want to be in for three to five years. Work your core position bigger and bigger over time by sell 35% of your position on sharp over-bought rallies and using that same amount of money to buy a larger “share” buy-in amount on weakness. Of course, you’re not going to be perfect. This is not a game for perfection. It is a game of odds and discipline. Be disciplined – play the odds.
- Price resistance is around $6.00 – $8.00 and $10.00.
- Finviz analyst’s consensus price target is $6.38. Short term we are comfortable with that.
- Paul Travers CEO, President, Director and Founder is a great salesman, always optimistic and dedicated to his company. As such, one has to temper his enthusiasm for the future with the reality of time and space. I would not change him for the world but building companies, takes time. Companies run into issues and problems, so listen to his conference calls, believe what he says, but watch the stock price – work your position based on share price activity, and have optimism about the future tempered by time and space.
Revenue growth has been about 35% run rate. We believe you will see that increase as recent projects convert from trials, to production contracts.
Vuzix is not yet profitable. It is still a story stock but rapidly transiting to commercial success story. Therefore, it is a speculative investment.
Insider Buys and Sells: there have been 17 insider buys and zero insider sells in the last 12 months. This totaled 430,306 shares bought, and of course, zero shares sold.
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