Telkonet Goes on a Tear after Announcing a Profit
TELKONET INC (AMEX: TKO) announced their 2nd quarter results last week on the 17th August. You’ve probably never heard of them, but it appears like someone knew the results prior to the announcement. I’ve been intending to post the results all week, but there’s never enough time. The daily price changes since August 12 are as follows, keep in mind the results came out on August 17.
| 12-Aug-09 | 27% |
| 13-Aug-09 | 5% |
| 14-Aug-09 | 35% |
| 17-Aug-09 | -7% |
| 18-Aug-09 | 0% |
| 19-Aug-09 | 8% |
| 20-Aug-09 | 4% |
| 21-Aug-09 | 29% |
| 24-Aug-09 | 17% |
| 25-Aug-09 | 14% |
| 26-Aug-09 | 19% |
So what now? Well there’s no point dwelling on conspiracy theories so the question is whether this micro cap provider of centrally managed solutions for integrated energy management, wired and wireless networking, building automation and proactive customer support services can actually continue to earn some cash. I know the answer and it could make you 2400% richer in the next year with no work or risk on your part. Yeah, I’m having a laugh. Though clearly those bullshit marketing messages suck enough fools in to be worthwhile. I got not idea, as I’m wasting my time, and probably yours, bringing TKO to your attention rather than digging in to the filing and listening to the conference call.
Form my quick look TKO have finally turned a profit, albeit and tiny $0.01, after deconsolidating their MST subsidiary, Microwave Satellite Technologies. [Small operating loss, but was cash flow positive] Telkonet originally rose to promise on the back of Broadband over Power Lines (BPL) a once exciting prospect in the internet gold rush days. They know concentrate more on their remote energy management.
While I never do give recommendations this is certainly not one. If pushed I’d say avoid stocks like this, but feel free to keep an eye on them if you find the story interesting. This micro cap of around $50M only had $120k in the bank at the end of the quarter and $2,440,934 in current assets with a heart attack inducing $5,632,036 current liabilities. I will dig deeper, but wonder if TKO has become the play toy of a spruiker on the back of the headline 2009 second quarter net income of $7.4 million, or $0.08 per share. Perhaps there really are some investors who didn’t wonder how that could be when TKO only had revenue of $3.1 million.
Telkonet Conference call
This is provided in a MP3 download.
- Gaining traction in smart grid and cleantech movements.
- Aggressive cost containment and focus on margins (57% GM) led to reduced operating loss.
- Smallest ever EBITDA and operating loss.
- Need additional funds for working capital.
- Cash flow positive for the first time. Tight restrictions from lenders.
- Trending towards near term profitability.
- Have got $300k working loan from State of Wisconsin.
- Still aim to be cash flow positive for 2009.
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TKO spectacular gains is nothing compared to performance of AIG, Freddie Mac and Fannie Mae – all up more than 300% since July. At least TKO managed to turn a profit, but then again maybe “investors” today prefer loss making companies as they are the ones whose share price are flying while the share price of solid profit making companies are going nowhere.
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