SP3 One of The Best Small Cap Opportunities on the ASXSpectur Limited (ASX: SP3) Reports Record Revenues On Strong Surveillance Product Demand
A record-setting quarter affirms Spectur Limited (ASX: SP3) growth metrics as it continues to send shockwaves on the development of high definition security camera powered by the Internet of Things. Earnings for the three months ended June 2019 affirm a company on its way to become a key a player in the video surveillance market. Ongoing sales and recurring revenue growth signal the company’s growing market share in a market poised to reach $62.62 billion by 2023.
Record Quarterly Earnings
Specturs transition from an industrial startup to a leading tech company is gaining traction as depicted by solid fourth quarter results. A 23% year-over-year growth in revenue to $1.45 million marks an important milestone. The growth led the company to full-year revenue of more than $4.8 million, above market expectations.
Robust revenue growth saw Spectur post two consecutive months of positive cash flow. The company had $2.16 million as cash at a bank as of July 8, 2019. The current cash balance supplemented by a new capital raise should allow Spectur to implement its growth strategy going forward.
Revenue growth received a boost on customers buying surveillance solutions rather than renting them. Unit sales topped record highs of more than 1,000 as rentals came in the excess of 200 units. Conversely, outright sales triggered a spike in paid subscriptions as well as serve access.
Recurring revenues as a result of growth in subscriptions topped $592,000. Going forward, upfront sales of new unit sales are likely to dominate the overall revenues. Management is also projecting higher gross margin and more recurring revenues as focus shifts to servicing government and utility customers. Plans are also underway to service customers outside Australia especially in New Zealand.
“Spectur continues to build revenue and its brand. With the strengthening of our management team, continued progress towards becoming cash flow positive from operations and a compelling, practical strategy, Spectur is well placed to grow and deliver on our promise,” says Spectur Chairman Darren Cooper.
Growing Video Surveillance Empire
The future can only be bright for Spectur in the multi-billion video surveillance industry. Management is already looking into the future as part of an effort of expanding the company’s footprint and push for market share. Geographic expansion in Australia is already in play in addition to the creation of new outbound sales channels.
The company is also increasingly looking to expand its current customer mix in a bid to diversify revenue streams. Product line expansion while leveraging Internet of Things is top on the agenda as management continues to bolster Spectur competitive edge.
In a bid to shrug off competition in the video surveillance business, Spectur has resorted to making video monitoring and surveillance a lot smarter. With the help of the internet of things, the company is already offering security and surveillance systems connected to cloud-based technology solutions.
Spectur should continue to enjoy an excellent run on revenue generation and market traction on being the only supplier of solar-powered deterrence and surveillance solutions in Australia. The company’s product mix is currently made up of thermal security cameras as well as HD5 solar security camera systems and time-lapse camera systems.
SP3 trade ideas
Stavely Explodes On Positive Exploration ResultsStavely Minerals exploded in the market after announcing outstanding shallow high-grade copper-gold discovery as part of its copper-gold project in Victoria. The stock was up by more than 200% as investors reacted to the news that affirms prospects in the Victoria copper-gold project.
The exceptional results come from a diamond hole SMD050 that targeted high-grade structural controlled mineralization within the ultramafic Contact fault.
In a press release, the company notes that the drill hole intersected a zone of 14.6 meters made up of massive sulphides as well as chalcopyrite bornite and chalcocite at between 79 m and 93.6m of the drill depth. The assay received include 5.88% copper at 32 meters, 1.00g/t gold and 58g/t at 62m.
“Additional mineralized structures are thought to exist without surface expression but are expected to provide a strong conductive response to a ground EM survey which is being designed, also as a priority,” said Stavely Minerals’ Executive Chairman, Chris Cairns.
Specurtacular Over the last 5 years, Spectur has been involved in a process of constant development. Our wireless security camera design is the result of millions of hours of real-world experience, in one of the world’s most hostile and arid environments
Spectur have moved well since my last idea was published moving out of thew base at peaking up 61% before resetting in the current flag pattern.
Over recent sessions demand volume has reduced considerably signalling that few sellers are prepared to reduce exposure here. The share price is currently at 38c where it has previously found support. This support also represents the 0.5 fib adding to the value attributed as a likely turning point.
With the company recently announcing the filing of three new patents targeting fugitive methane emissions, thermal imaging and LIDAR applications it has become clear that this is not your run of the mill CCTV play.
The increasing distribution network and new family of technology support the probability of strong news flow over the coming months which is why the current set up represents opportunity.
I have held since IPO and will continue to do so based on the strength of the fundamentals until significantly above the current chart based target of 61c with a pseudo stop loss at 34c . As a TA trade this has potential for a 60% move on a risk reward basis of 5.75
#SP3Over the last 5 years, Spectur has been involved in a process of constant development. Our wireless security camera design is the result of millions of hours of real-world experience, in one of the world’s most hostile and arid environments
Spectur hit the ASX with a bang in August this year so is still very much in their infancy as a publicly listed although as a solar CCTV company they have over 5 years of experience.
The 20c initial public offering was in hot demand with the share price hitting 53c on the second day of trading, since then the price drifted back to a low of 25c before the recent interest.
An update by the company has been met with solid interest driving the SP back to around 30c which I believe will form a new base. The companies quarterly report should make for positive reading and with the majority of shares now in very tight hands there is a strong possibility that this could move north quite quickly.
Prom a chart perspective this move from base could do with another few days to consolidate before moving into the next resistance point at around 41c.
While personally this is a fundamental holding based on expected growth there appears to be a high probability trade available between current pricing and 41c, the recent uptick in volume suggests others also see this as undervalued.
Should the secondary resistance point break there is a strong possibility that the all time high will be challenged at 53c
