"The 1,000% Report: Better Pipeline than Hewlett Packard"

This teaser comes to us from Andrew Gordon of Investor’s Daily Edge and The Wealth Advantage, which says it “reveals undervalued opportunities for large gains in very safe investments.”

The service looks pretty good in the ad, as they all do — Andrew says he looks for good management (especially new management brought in to fix things), good hidden assets owned by companies the Street thinks are in crisis, and good entry timing (avoiding “falling knives”). I’m sure we would all make money if we could find such companies with consistency.

The last one of his stocks that we sleuthed out a little while back was SunPower, which doesn’t seem to have that “crisis” flavor to it, though he did think they had a hidden asset in their top-of-the-line PVs … but perhaps he has other investing ideas as well.

And the examples he gives, a cherry-picked list of the best “crisis recovery” companies of the past several years, also sound like great ideas (at the time of their bottoming):

aQuantive (which the Fool also likened to the “next Google”, as we’ve sleuthed before), Hewlett Packard, Apple, Flir, Elan, American Airlines … etc., etc. I didn’t notice anywhere that he said he had actually recommended these stocks at the bottom, or profited from their comebacks, but he does use lots of fancy looking charts to make it seem as though he is in some way responsible for the money investors made on these names (and not for the money they precipitously lost before their turnarounds).

So the argument is, once we know which companies actually did recover from their crises, wouldn’t it be great to use your time machine to go back and invest in them?

Of course, that’s not what he says — he says he has a system for picking the companies that will recover out of the rabble. Maybe it even works, I guess time will tell.

So what’s the tease for the best “crisis” stock he’s found for us to invest in?

“Without a doubt, this is a multi-billion dollar technology firm in the making… and yet its market cap is less than $185 million. One analyst has said that ‘this company has a better pipeline than Hewlett-Packard.’ Others have compared this firm to a young Microsoft or an up-and-coming Intel. And today, you can buy it for around $4.00 a share.”

Well, hard to argue with that, eh? He notes also that the company has fallen by about 95%, but has “more than 100 patents that cover several billion dollar applications.”

The cool stuff that this company is reportedly working on includes:

A tiny projector for cell phones.

High quality, disposable surgical endoscopes.

A “device that could make plasma screens obsolete.”

And so on … lots of pie in the sky sounding stuff that sounds pretty awesome.

So … would you like to, in Andrew’s words, turn “$10,000 into $100,000 in one stock…”?

I have no idea if it’s really worth the money … but thanks to the sleuthing work of an anonymous Gumshoe reader (didn’t even have to take out the craniotronic for this one), I can tell you that this company is …

Microvision (MVIS)

It is indeed still trading right around $4 — $4.20 this morning, and the market cap is right around $180 million. It does indeed have a lot of patents, though I don’t know if they’re worth any money, let around “multi-billions”. And they are developing all those cool things they teased in the ad and more, as well as continuing to develop next generation barcode scanners.

As far as “crisis” goes, they are certainly way down from their 2000 peak of about $80 … and also well recovered from their trough of just over a dollar last fall. Don’t know why they fell or why they recovered.

I also have no idea how this company’s products compete in the marketplace, but they certainly do have some revenue — including government contracts, ongoing sales of scanners, and some smaller stuff based on their MEMS imaging technology. Perhaps they’ll be a world-beater, perhaps not — that’s for you to decide.

As a quick thumbnail from my glance at their info: They have more debt than cash, but look to me to be pretty far from being profitable (and their revenues aren’t growing, at least not in the latest quarter). They do have outstanding warrants, traded at MVISW if you’re interested, so take those into account when you make your valuation calculations, if you’re interested. And there is a substantial short interest of close to 10% of the float. So caveat emptor, and let us know if you think anyone will be making money from this one.

And just FYI: You haven’t missed anything in the time it took to get to this one — it closed at $4.23 yesterday, the same as the closing price on the day I originally got this email last week.

And if you bought it around $80 seven years ago, feel free to share your sob story. Thanks again to my anonymous reader for bringing this teaser and it’s solution to our attention.
             ——————–
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The author will always disclose any direct long or short equity, debt or option position in any stocks written about as of the day of publication, and will not trade in any stocks mentioned for three days (72 hours) after publication. Full disclaimer is at the bottom of the page.

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1. I sleuthed this one myself last year when I first got a teaser for it, bought at 1.32 and 1.38, sold at 1.72 and 3.45. During that time, they entered into development agreements with a cell phone manufacturer and created working prototypes for their micro-projector, as well as their bar code scanner. (These events probably gave it much of the boost from its low to where it is now) So although their balance sheet still leave much to be desired, their cool gadgets are not entirely pie-in-the-sky.

   [Reply]

   Posted by Anonymous | May 10, 2007, 2:33 pm

2. What do you think of this comment on ‘the FDA medical devise that could make you rich’ posted on 2 May?
   I came to the conclusion that they were referring to CO2 laser for relief of angina and that the company was PLC systems

   May 2, 2007 4:46 PM
   I am glad that I found your site.

   [Reply]

   Posted by Anonymous | May 10, 2007, 2:39 pm

3. Sorry for the delay on that FOXH comment — I responded to you on that post, if you want to make a case for PLC I’m happy to hear it. It’s not the solution for that teaser, but it may well be a great investment … I’m happy to hear why.

   And on the first comment here — thanks very much, I’m always happy to hear from folks who actually own these companies and know their products in more detail. Would you buy it today at $4+? They just released their quarter last night, which didn’t seem to impact the stock much.

   Thanks for commenting.

   SG

   [Reply]

   Posted by One Guy | May 10, 2007, 3:03 pm

4. Unfortunately, I have not been following the company news as closely since I sold my shares, but I just checked their latest press releases, and it looks like last week they won a contract with USAF to design HUD helmets for soldiers. This looks like a similar technology to their HUD for personal vehicles (displays GPS maps directly on windshield), for which they have a contract with an “unnamed tier 1 automotive supplier”.

   Defense contracts are always good, but the share price didn’t do very much following the announcement. Earnings are steadily improving, but their estimations still see them being negative two years out. On the other hand, their debt is (relatively) low, and they do have a heck of a product pipeline.

   At $4+, I wouldn’t pick it as my first choice for new money, but from both a technical and product development perspective, it looks relatively solid. The contracts MVIS is acquiring prove they are definitely a known entity, and at only a 180M market cap, it would only take the commercial success of one or two of their projects to send this stock up significantly. Although I no longer hold a position in it, I don’t think the current run will stall for too long at this level before moving back up again.

   I only sold it when I did because I under-shot my trailing stop order, and didn’t feel like buying back in at the time. If I had the money currently to be buying into speculative R&D plays, I would be at least considering MVIS.

   [Reply]

   Posted by Anonymous | May 11, 2007, 4:09 pm

5. I got involved in this little ‘jewel’ a couple of years ago when Tokman had just joined as CEO. The ‘Tout Letter du Jour’ hailed him as somewhere between Bill Gates and the Second Coming. I rode my Vegas money play down to about a 50% loss and bailed. Just spotted this writeup today as I’m new here. Checked their numbers on Yahoo biz and, I dunno, maybe it’s time for the upslope on their roller coaster ride. I’m impressed they can continue to lose tons of money and still hang in there. Many of their products are real ‘Gee Whiz’ stuff so I do hope they make it big.In the competition columns, TXN (Texas Instruments) seems to me to be a more rational play.

   [Reply]

   Posted by StarCruzer | April 3, 2008, 11:42 am