July 30, 2018 - 7:30 AM EDT
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This Undiscovered Stock Just Completed a Transaction That Implies Near-Term 200% Upside

SBRT is an unknown OTC stock that has been quietly growing revenue in the very exciting IIOT space; 900% revenue growth year-over-year,

  • The company just announced a transformational partnership with IOTA access. IOTA's CEO was a co-founder and President of Cellular One, which was the first cellular company in the U.S. to go public and was subsequently sold for $6B. He also co-founded NTL, Inc., which at its peak had a market value of 59 Billion.
  • SBRT also priced a $5 million financing at $1.00 per share, or a 160% premium to where the stock is trading. SBRT used some of the proceeds to pay off debt, which we believe removes most of the recent overhang from the stock and it could be poised for a big move north.
  • With financing overhang removed, market capitalization of only $12 million could change rapidly for SBRT. Similar companies are valued at 2 or 3X their revenue, indicating that SBRT could be worth $0.75 to $1 dollar per share, which is nearly 200% higher than where the stock is currently.

NEW YORK, NY / ACCESSWIRE / July 30, 2018 / With a key overhang removed and the stock recently depressed, shares in Solbright Group (SBRT) could double or more imminently.

Solbright Group is an emerging energy conservation services company, and they've been growing by leaps and bounds since acquiring an East Coast solar company last year. In their recent fiscal third quarter, they reported an increase in revenue of over 900% compared to their third quarter of fiscal year 2017.

Now, Solbright Group just removed a key overhang for the company with a $5 million convertible financing, which both eliminates some old debt and improves the company's cash balance. Meanwhile, revenue has grown by leaps and bounds in the last 12 months, and the company just signed a major partnership with an established communications company called Iota, who's CEO built one of the largest telecoms of the last decade.

Similar companies are valued at 2-3X their trailing twelve months of revenue, while SBRT is valued at 1X their own recent revenue - with this overhang gone, this could be the start of a move back to fair value, which may be over 100% higher from here.

Energy Conservation Through Internet Of Things Expertise

Solbright Group's expertise lies in improving energy efficiency for facilities, municipalities, and businesses. Through their energy conservation services subsidiary SES, Solbright provides energy conservation services to commercial operators and buildings throughout the eastern United States, including energy consumption assessments and recommendations, as well as acting as the general contractor for solar panel installations and other retrofits.

This pairs with the other side of their business, called Arkados, which develops proprietary, cloud-based device and system management software solutions and delivers software services and support. This is the essence of the Internet of Things (IOT), where gateways and smart sensors gather and analyze energy use data in order to improve energy consumption for manufacturing spaces and other facilities. This can be used on single machines or throughout an entire facility, campus or even city to measure and ultimately reduce energy usage and costs. It's recently been coined the Industrial Internet of Things.

For a recurring fee, facilities continue to improve their own energy consumption and save money while generating ongoing revenue for Solbright Group.

Revenue Has Multiplied as Business Has Grown

Last year, Solbright acquired a mid-Atlantic solar installer, which brought with it a $40 million pipeline of potential projects and revenue. It fit perfectly with the company's existing services work, but it's exceptionally savvy because it also brought with it a pipeline of business potential for their Arkados software business, as well.

This is key to understanding SBRT, as the software side of the business can generate exceptional margins in the 80-90% range, and this is long-term, recurring revenue.

Sales have increased substantially since then. The company reported revenue for the third quarter of fiscal year 2018 of $2,496,544, an increase of over 900% compared to revenue of $263,800 in the third quarter of fiscal year 2017. Revenue in the trailing twelve months totaled $12.3 million.

Financing Strengthens Balance Sheet And Removes Overhang For Investors On Sidelines

Solbright at the end of June announced a $5.0 million financing in the form of 10% Secured Convertible Promissory Notes. The company has set aside $3.4 million of this to repay existing outstanding notes, and one of these same noteholders agreed to a further $2.5 million in potential funding before the end of the year.

The notes priced at $1.00 per share, which could indicate where the investors see fair value for the company.

This financing clears up some of the company's prior debt, eliminates some potential convertible holders, and also provides working capital for the company.

This is key, as Solbright just signed a major partnership arrangement last month as well, with the well-respected M2M Spectrum Networks (doing business as Iota). Importantly, their CEO Barclay Knapp was a co-founder and President of Cellular Communications, Inc. (Cellular One), the first cellular company in the U.S. to go public that was worth almost $40 billion at its peak!

Iota and Solbright are partnering on a proprietary new connectivity line called SF Net, combining a network and suite of solutions that will provide corporate and campus facility managers with a one-stop, turnkey-installed, facility-wide network and applications platform. This expands SBRT's existing hardware and software offerings, and with the added bonus of radio-based connectivity. Between the two partners, a whole new pipeline of potential business has opened up.

SBRT Could Trade Higher By 2X or More To Match Its Peers

At only $12 million in market capitalization, SBRT may be a steal trading at 1X their trailing twelve months of revenue. SBRT has reported $12.3 million in revenue during the last twelve months, and looking at its peer companies suggests this is substantially undervalued.

Two of the most well-known solar installers are Sunrun (RUN) and Vivint Solar (VSLR). RUN has a public market value of $1.51 billion, and during the trailing twelve months, they reported $570 million in sales. Their Price-to-Sales ratio is over 2.6X. VSLR has a public market capitalization of $600 million, and they had sales of $280M in the last 12 months. Their Price-to-Sales ration is over 2.11X.

SBRT is currently valued by the market at $12 million, or a Price-To-Sales ratio of about 1X. With $12.3 million in revenue, this company could more reasonably be valued at $24 million, or as much as $30 million based on this competitor analysis. That would be 100 to 150% higher than today. The recent financing could remove the recent overhang for a move back to fair value.

Holding SBRT has risks, and it should be considered a high-risk high-reward energy trade. Solar tariffs may impact future sales if solar installations slow down in the U.S., and as a micro-cap stock, SBRT could be worth nothing at all without great execution.

At $12 million in market value and a 1X Price-to-Sales ratio, SBRT appears to be an excellent potential trade in 2018. A little news can go a long way with undiscovered small-caps, which names like Aphria Inc (NYSE: APH) and Baytex Energy Corp. (NYSE: BTE) have exemplified recently.

Their biggest overhang has just been removed, and the stock's recent depression could lift rapidly as investors understand what the remainder of the year looks like - SBRT could be worth $24 to $30 million based on a peer analysis, or easily closer to $0.75 for this $0.30 stock.

About One Equity Stocks

One Equity Stocks is a leading provider of research on publicly traded emerging growth companies. Our team is comprised of sophisticated financial professionals that strive to find the companies and management teams that will outperform the market and deliver investment returns to our subscribers. We are not a licensed broker-dealer and do not publish investment advice and remind readers that investing involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for-profit business and is usually compensated for coverage of issuers. In the case of SBRT, we are reimbursed for actual costs of this distribution and have received 750,000 shares of restricted stock for Business Development, Capital Markets and Research Services from SBRT. Readers should always assume that we will sell some or all of our position on the 180 day anniversary of the stock's issuance date. We may receive up to an additional 250,000 shares of SBRT in the future. Please contact us at [email protected] for additional information or to subscribe to our intelligence service.

SOURCE: One Equity Stocks, LLC


Source: ACCESSWIRE Investor Awareness (July 30, 2018 - 7:30 AM EDT)

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